@ my wits’ end

Our Reserve Bank Governor is of the opinion that New Zealand cannot close the income gap with Australia. He didn’t say we won’t do it, he said we can’t. This is the same economic genius who declared the recession over in 2008.

Bollard maintains that “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” and therefore concludes that we have no show of catching up with them.

Bollocks, Mr Bollard.

A couple of points to ponder

• Luxembourg and Singapore have very little in the way of natural resources. I’ve been to both countries, they each earn more than double our per capita GDP. No gold being dug up there Mr Bollard.
• From our dismal position Australia looks wealthy, but they aren’t doing very well in comparison to countries with bugger-all natural resources like  Switzerland and Andorra.
• Read the statistics from 2007 in the chart below (from this @MyWitsEnd page). I’ll post a more up-to-date chart later today.
• If you take Australia’s mineral sector out of the equation, they’re still doing better than we are. It’s only 8% of their GDP.
• In 2009 Liechtenstein earned 4.4 times as much as we do per capita. Mr Bollard, what natural resources does Liechtenstein have?

Per Capita GDP

The table above is a little out of date, Ireland and Iceland have taken big hits since it was formulated. However, those problems were caused by stupid borrowing policies just like those of the USA and have little to do with their ability to earn their way. Bet your bottom dollar that they’ll be back. In fact don’t bet, they’re already back. Both those nations have moved up the table since this 2007 version was published.

Since this table was published we’ve continued to decline. In 2009 we had sunk to number 51. Liechtenstein have moved to #1 with a per capita GDP of US$122,000.  4.4 times our pathetic US$27,700.

I agree with Mr Bollard in one way. I doubt that we will catch up with Australia. I strongly disagree with his assertion that we cannot catch up.

We can if we have the will to do it. Short term pain for long term gain.

Check the dismal news in the latest table here. We’ve been left in the dust by Greenland. Maybe we need to start selling icebergs.

Mr Key, bite the bullet. Keep my grandchildren in New Zealand.