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Clean, ethical and poor

Published on (Auckland), 29 October 2013

When people meet under Chatham House rules, you cannot disclose afterwards who said what.

That’s the drawback. The advantage is that you find out what people really believe when they do not
have to hold back. And that can be most telling.

I recently attended one such Chatham House rules meetings in which the economic future of New Zealand was discussed.

Before that I always believed that Kiwis were mildly obsessed with comparing New Zealand’s economic performance to Australia. So I was interested to hear one of the participants explain that this was a nonsensical comparison and we should really stop this constant look across the Tasman.

At first I was pleasantly surprised. I also find comparisons with Australia unhelpful – because I believe they provide us with a licence for laziness. You often hear that Australian incomes are higher due to their mining boom. If only New Zealand was similarly endowed with mineral resources, we might be just as rich and productive as our Australian cousins.

There is only one problem with this view: It is not true. The big gap with Australia opened about four decades ago and has been relatively stable in recent years. But New Zealand did not only fall behind Australia. In fact, we also fell behind most other developed economies and the OECD average by similar proportions.

This means that the growing income gap between the two sides of the Tasman is not primarily explained by Australian circumstances, but has more do to with our own policy settings.

Australia’s natural riches cannot have anything to do with the fact that New Zealand’s relative economic performance has been poor against countries other than Australia. It’s basic logic.

As I said, I would welcome a broader comparative look at our economic performance so I was happy to hear a plea to stop the sibling rivalry with Australia. But then the other attendee started to explain why he wanted to have the comparisons ended. As it turned out, he wanted to do so for entirely different reasons than myself.

In his world view, the trans-Tasman income gap reflected the different moral values of both countries.

Australia, so he pontificated, only got rich at the expense of a ruthless exploitation of nature and of its indigenous people. Giant mining projects in remote areas of Australia were allegedly fraught with environmental problems and ignorant of the rights of indigenous people.

Similar policies would be unthinkable in New Zealand. There simply would be no public acceptance of such schemes.

So the conclusion, at least to my fellow delegate, was straightforward: New Zealanders generally maintained higher moral, social and environmental values than those ruthless, profit-oriented Australians.

In other words, Kiwis prefer to remain poor in order to remain ethical. And for those few New Zealanders who did not want to adhere to these standards but just cared for money? Well, they should just bugger off across the ditch.

I confess that as a migrant who has lived in both countries I was flabbergasted when I heard this.

First, I find it astonishing to denigrate Australians as morally inferior. That does not describe the Australians I have met. Second, I also find it highly questionable to label New Zealanders migrating to Australia as greedy and less ethical. Most of them just want to find better opportunities for themselves.

Third, though there were certainly crimes and injustices committed against indigenous Australians in the past, this certainly does not explain Australia’s economic development of the past four decades.

All in all, I was just stunned. Whereas previously I thought the Australian mining boom was used as a poor excuse for our own lagging productivity, I now realise that at least for some Kiwis it is not just an excuse.

They seriously believe that our lower income levels in fact reflect a higher virtue. You don’t have to go back to Max Weber’s famous description of the Protestant work ethic to realise that you cannot build an economy on such foundations. You cannot have a prosperous economy by attaching a moral value to poor performance.

Since this Chatham House rules meeting, I wonder: How widespread is the notion that being economically less prosperous than Australia is, in fact, a good thing? And does this notion perhaps explain the difference in productivity and incomes between the two countries?

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