Never in the history of New Zealand has a Minister of Finance been jittery about the prospect of receiving positive praise from the world community for the state of the domestic economy. But that is precisely the impact of the recent OECD report on New Zealand, released yesterday.
The thrust of Michael Cullen's campaign this election was going to be that New Zealand couldn't afford tax cuts because the outlook for the economy is weak. Rather, the OECD report debunks this myth, stating conversely that the economic outlook is very positive, provided that the Government takes heed of capacity concerns.
In particular, the OECD points out that "education services need a sharper focus on results"--a less than subtle dig at the NCEA system. The report further states that "labour market flexibility should be preserved", rather than last year's changes to labour laws. And the third key aspect of the report--that regulatory constraints on increasing electricity generation capacity--is as direct an attack that the OECD can make on the Government's overly-restrictive resource management regime.
Labour has made no commitment to raising productivity growth. On the contrary, the fact it is in bed with the union movement absolutely limits its ability to liberalise labour markets.
And the final nail in the coffin for Dr Cullen and his doom-merchants is the comment:
"While the country is now reaping the benefits of earlier reforms and real GDP growth has been very strong, it cannot afford to rest on its laurels if it wishes to catch up to the living standards of the top half of the OECD."
Those key "earlier reforms", of course, are the Reserve Bank Act, the Fiscal Responsibility Act, and the Employment Contracts Act--the latter of which Labour has unwound through its union-friendly Employment Relations legislation. Labour has attempted to claim the credit for New Zealand's economic success over the last decade, when the OECD clearly identifies recent history as being due to historical structural reforms.
So read it and weep, Dr Cullen. We've got good reason to feel positive about New Zealand's economy. And we don't have you to thank for it. Provided we have a government that has the courage to allow hard-working New Zealanders to reap the benefits of their efforts.