Allan Bollard, Don Brash, John Key, Politics, Roger Douglas

The Reserve Bank Governor’s flag

The open letter below illustrates why I left National to work for Sir Roger Douglas (for a lot less money, I might add).

Alone among New Zealand politicians in my lifetime, Roger believes in setting SMART goals for the country. And setting out plans to achieve them.

I suggested the idea of setting a bold national goal to the National Party.

They thought I was nuts.

“But we might be held accountable!” they scoffed.

So I took the same idea to ACT.

In the blink of an eye, Roger had grabbed it with both hands.

But what should the goal be? “What’s our biggest problem?” he asked himself.

Easy: we’re haemorrhaging people to our bigger and better-run neighbour.

Pretty soon, he’d defined the goal in two words: catch Australia. And set a deadline: by 2025. 

Then he devised the ACT 20 Point Plan to get the job done.

You can imagine my amusement at seeing the 2025 goal come full circle after the election as the goal of the so-called ambitious Key government. 

It’s been interesting to watch the PM profess to be committed to catching Australia, while putting the kibosh on most of the steps necessary to get there.

“You can fool most of the people most of the time” would appear to be the Nats’ belief.

And the fools who give the government their record high ratings confirm that it’s correct.

But for the Governor of the Reserve Bank to play chief surrender monkey is a new low.

Allan Bollard said yesterday that we’ve got no hope of catching Australia, so should resign ourselves to catching crumbs from Australia’s table. 

This is the man who succeeded Don Brash, who left the Reserve Bank for Parliament with the goal of staunching the flow of emigrants across the Tasman.

John Key’s National Party predecessor, the same Don Brash, was hired by Key to devise a plan to do that, and when he did so, John ‘ambitious for NZ’ Key rejected it as too ambitious.

Anyway, this is how our greatest-ever finance minister views the Governor’s capitulation:

 An Open Letter to Dr Allan Bollard by Hon Sir Roger Douglas
 
Dear Dr Bollard,
 
I write to you regarding the comments you made about the possibilities of New Zealand matching the level of economic output of Australia on a per capita basis, which you made on ‘Q & A’, Sunday 7 February.
 
In particular, I was shocked at the following comment:
 
“I don’t think we can catch up with Australia, Australia’s a most unusual country, Australia has been blessed by God sprinkling minerals across the top of the surface in very easily accessible areas in places where it doesn’t annoy people to mine them.
 
“China’s there buying all that, it’s not rocket science, they’ve run the economy well, but we just don’t have those advantages, but that’s all good news for New Zealand because there’s a lot of crumbs come off the Australian table that we can take advantage of.”
 
The idea that the lack of mineral wealth will stymie economic growth is simply wrong. 
 
Consider the success of Hong Kong during the fifty years it was a British crown colony. 
 
In 1960, Hong Kong’s per capita income was 28 percent that of Great Britain’s. 
 
By 1996, it had risen to 137 percent of Great Britain’s. 
 
Within four decades, Hong Kong – a tiny portion of overcrowded land, with no real resources to speak of except human ingenuity and a port – was able to increase its level of economic output so that it topped the level achieved in the birthplace of the industrial revolution.
 
In fact, if large resource wealth was a prerequisite for economic success, then many countries that have had much faster growth rates than us should be doing quite poorly – Singapore, Ireland – and countries like the Democratic Republic of the Congo would be doing well. 
 
Mineral wealth is clearly neither a necessary nor sufficient condition for economic wealth.
 
A far more potent factor in driving economic growth are the institutions we develop – the nature of our constitution, the policies the Government adopts, and the social norms that develop. 
 
Economic wealth in Hong Kong has been created by, amongst others: freedom of exchange, both national and international; low taxes that reward productivity and reduce deadweight loss; and a Government that fulfils its core roles – to protect our freedoms, enforce contracts, and help create a framework for competitive markets.
 
There is no doubt that if we continue to maintain the status quo, then we have no hope of catching Australia. 
 
To blithely suggest that we can never catch Australia because of the minerals they have is to ignore the lesson of economic history – that policy matters.
 
Regards,
 
Hon Sir Roger Douglas 
Douglas is like Lord Monckton. Everyone calls him names, but no one can match his arguments.
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