But doesn’t this presume that the government has the ability to do these things? This confuses me as I thought that the basis of the NZ right was that the government doesn’t have the ability to significantly improve economic outcomes.
For example, Don Brash, the ACT party, and Roger Kerr, believe that the government can increase real GDP growth in New Zealand sufficiently for us to catch Aussie. According to them this involves growing adding 31% more output in this period (15 years) as well as any growth that Aussie achieves. Is it me or is this insane.
I also hear people say “China has been growing in excess of 10%pa” why can’t we. Well this is because they are starting at a low base, and are catching up in technology to developed economies – we don’t have this “low hanging fruit” to pick up on.
Long-term growth is based on technology, resource allocation, and to some degree the structure of institutions in the economy. I severely doubt that the government can turn around and improve any of these things to the degree required to “catch Australia”. Hell, Australia is closer to its markets, has a larger set of currently important natural resources, and gets “economies of scale” due to its higher population. No government policies can magically fill this gap.
Update: Paul Walker shares similar sentiments, and a bit more discussion, here.