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A new economic narrative

Max Rashbrooke, a well-known writer on democracy and inequality, will give a talk in Masterton next week.

“New Zealand’s current economic model is on its last legs. It’s failing to create widespread prosperity or keep us within environmental limits,” he said.

Rashbrooke argues that New Zealanders put in long hours but have poor productivity compared with workers in other developed countries.

“We work harder rather than smarter,” he said. “For decades, our living standards have been falling behind those of other rich nations, and often we export raw materials – logs and milk powder – rather than anything more innovative.”

He said that what prosperity we do create is very unevenly shared.

“The richest 10 per cent of people take around 35 per cent of all income, and the wealthiest 10 per cent hold 70 per cent of all assets. Furthermore, roughly one child in 10 lives in poverty, twice the rate of the world’s best performers on that score.”

Rashbrooke also reminded New Zealanders that we are living well beyond our environmental limits, with per-person carbon emissions among the world’s highest.

“We’re also world leaders in the amounts of waste we generate, and we have some of the most polluted lakes and rivers in the world,” he said. “Our economy, in short, needs a serious upgrade. However, it seems that both major political parties are content with tweaks.”

He suggested that to set the New Zealand economy on a different course, we need a dual switch.

“We need to invest more in people, in infrastructure and in long-term thinking; and at the same time we need to place hard limits on the effects of economic activity on the environment.”

Rashbrooke said that investing in people means supporting families and children better, especially in the early years, so that they can maximise their economic and social contribution.

“That would be much more productive than policies that encourage speculation in the housing market, for instance. We also need to spend more on infrastructure, and deliver it better, so as to underpin our shared prosperity. And we need future-focused investment rather than the short-term fixes so common in New Zealand.”

Another strand of Rashbrooke’s argument is reform of the tax system to make wealthy people pay at least the same tax rate as others, rather than half the average rate as they do currently.

“The investments this would allow would then help us be more prosperous and pay our way in the world,” he said.

Finally, he said, we need to ensure this prosperity doesn’t come at the expense of the environment.

“We need strict laws, not to just protect nature as it currently is, but also to roll back decades of damage. And we need to drastically reduce our carbon emissions to help keep global overheating below 1.5 degrees.”

Rashbrooke said all this pointed to a “just transition” that will help the poorest New Zealanders to succeed in the shift to a greener economy, with an emphasis on good green jobs.

“That way, we can build an economy in which everyone prospers, in harmony with others and the planet.”

Max Rashbrooke will deliver his talk, ‘A new economic narrative for the 2020s’, to a meeting of Science Wairarapa at 7.30pm on Tuesday, November 21, at the Education Centre, 22 Dixon St, Masterton. All are welcome; a door charge of $5 will apply.

Science Wairarapa is supported by Wairarapa REAP.

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