NZ has fallen behind its peer nations. Here’s why

Young man standing on the summit of Mt. Eden overlooking the Auckland skyline at sunset - Auckland, New Zealand

Landing in Singapore last month, after two years of enforced Covid exile, was a stark reminder of just how far New Zealand has slipped behind its peers in the region.

Unfortunately, the roots of New Zealand’s under-performance failures go back decades and can’t all be blamed on the pandemic.

Is it fair to compare New Zealand to Singapore?

The two countries have similar population sizes – roughly 5.5 million in Singapore while New Zealand clocks in at just over 5 million.

Both inherited a common law and the British parliamentary system.

When the independent Republic of Singapore was founded in 1965, it followed years of civil unrest in the wider region. Sure, it has a strategic position, but so did the Straits of Hormuz, the Suez Canal and Gibraltar, and these areas never became economic powerhouses.

In the 1950s and 60s, New Zealand was one of the wealthiest countries in the world, awash with talent and virtually limitless natural resources. Back then no dispassionate observer would have argued Singapore held the advantage.

But 55 years later, the city-state has pulled ahead of New Zealand in every important metric.

Data from the World Bank makes for grim reading.

Singapore’s GDP per capita is US$72,000 (New Zealand’s is US$48,000). Singapore’s economy grew by 7.6% in 2021 (NZ’s grew by 4.6%), and its top tax rate is 22% (NZ’s is 39%).

Singapore’s literacy rate is 97% while New Zealand’s is a woeful 64%.

Simply put, a broken education system means each new generation is less capable than the last and the nation’s productivity, innovation and earning power all drop precipitously.

The result is less money for hospitals, infrastructure, law and order and other markers of a first-world economy.

What’s New Zealand’s excuse for performing so poorly on these key economic and social metrics? The reasons are multifaceted, but there are at least five obvious pieces of this puzzle:

Hostile culture

New Zealand’s tall-poppy syndrome is a key cultural blind spot, but many countries have a similar problem.

Our weakness is more subtle and more corrosive than that – it’s complacency. Our “she’ll be right” and “close enough” attitude means New Zealand isn’t performing at its full potential.

The Singaporean attitude is 180 degrees of this laidback Kiwi mindset. Over there, you must earn your way to the top, striving for excellence is championed and complacency is degrading.

There will be those who argue Kiwi complacency is a good thing, that we don’t want to be part of the rat race, but the response to this is simple: don’t expect first class healthcare, education, law and order or social welfare, and do expect your best and brightest to leave.

Striving for the top and championing excellence are part of the Singaporean mindset, a 180-degree flip of New Zealand’s “she’ll be right” approach.

Inconsistent government

The lack of vision among New Zealand’s elected officials, across both parties, is a badge of shame. Add to that a three-year electoral cycle that creates short-term thinking and energy-draining political turf wars, and there is no time for getting things done.

On the other hand, Singapore’s government is united by a single vision for its future. Yes Singapore’s “managed democracy” makes long-term planning easier, but it still offers plenty of lessons for New Zealand about the importance of consistency and unanimity.

Supporting the long term planning, Singapore has a world-class public service, many of whom are sent to the world’s best universities.

Singaporeans don’t just work hard; they pick their best to work the hardest.

Singapore makes no excuses about bonding these individuals: they are required to repay the society that afforded them such golden opportunities.

Capital vacuum

The numbers don’t lie. In 2020, New Zealand’s foreign direct investment (FDI) was only 1.9% of its GDP. In Singapore, the FDI inflow during that same year reached 21.6% of its GDP.

New Zealand just isn’t getting enough capital to fuel the rockets our companies need for growth. This could have been so different if Robert Muldoon hadn’t cancelled Norman Kirk’s proposed superannuation scheme in the 1970s.

Had we avoided such petty partisanship, New Zealand might now have the equivalent of Singapore’s state-owned investment company Temasek, which was seeded in 1974 with $300 million and now boasts a whopping $400 billion in managed funds.

The investment possibilities for Kiwi companies would be incredible.

Add into this mix the intractable problem of convincing Kiwis that there are other asset classes besides real estate, and the reason for this country’s shallow capital pools are obvious and troubling.

Allergic immigration policy

No post-WWII New Zealand Kiwi leader has encouraged the world’s best and brightest to come here. Immigration is a poor cousin ministry and has never been seen as a strategic lever.

Our national conversation on immigration has been variously obsessed with disturbing racial overtones and house price growth.

Now that the pandemic is passing, Singapore is moving quickly to become a “global hub for talent” by offering expats already living there a five-year work pass that also comes with a provision for their dependants to get jobs there as well.

Back in New Zealand, even if a foreign worker can travel to this country, it regularly takes more than six months for Immigration NZ to get its act together and issue a work visa.

In a post-Covid world, this policy might as well be a giant banner that screams, “Go Away.”

“F” for education

According to the OECD’s Programme for International Student Achievement (PISA), in the year 2000, New Zealand’s students proudly ranked third in reading, third in mathematics and sixth in science literacy.

By 2018, Kiwi students had declined to sixth, nineteenth and seventh, respectively.

Meanwhile, in 2018, Singaporean students were the best in the world at maths, second-best at science and fourth in reading.

The causes of this decline are multifactorial and complex, but part of the blame is that the Ministry of Education and one of our major political parties have been captured by the teachers’ union, the NZEI.

While many teachers are highly capable, as a parent of four children it is increasingly hard to believe that the public education system is acting in the best interests of our children or the country.

Parents need to shoulder the blame too. When something like 60% of children have been attending school regularly, no amount of good teaching will lift our literacy rates.

My takeaway from Singapore was that it is getting harder to call New Zealand a first-world country.

The issues I’m flagging can’t be blamed strictly on Covid-19. That’s lazy thinking. They’ve been metastasising for decades, right in front of our eyes.

Solving these problems will require long-term thinking and sustained bi-partisan effort. The question is: do we have the energy and courage to shrug off the complacency and do what’s necessary?

Originally published in Stuff.co.nz.

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