Opinion by Andi Cockroft, chairman CORANZ
It’s well past time when New Zealand’s economic policy was examined and any shortcomings jettisoned.
For example, New Zealand could well consider ditching Gross Domestic Product (GDP) as a measurement of New Zealand’s progress and replace it with Genuine Progress Indicator (GPI). It’s not new. Some economists have already advocated this. At a time when economic disparity continues to widen and the health of the planet is under severe threat, many question the tenet that growth is the appropriate measure of economic sustainability and success. British economist Kate Raworth is one such advocate.
In her book Doughnut Economics: Seven Ways to Think Like a 21st Century Economist – longlisted for the 2017 Financial Times McKinsey Business Book of the Year Award— Kate Raworth issues a clarion call to act creatively and to reframe the economy, by “meeting the needs of all within the means of the planet”.
The Council of Outdoor Recreation Associations has been advocating the change in emphasis over the last three elections in a charter presented to political parties and MPs.
It’s obvious by pressures on not only infrastructure but the quality of life of people, that change to better-balanced criteria is not only desirable but becoming urgent. The quest for growth and more growth is short-sighted.
Two years ago in 2019, Indicators Aotearoa New Zealand was developed by Stats NZ as a source of measures for New Zealand’s well-being. The set of indicators will go beyond economic measures, such as gross domestic product (GDP), to include well-being and sustainable development.
Team of Five Million?
The well-being indicators will build on international best practices and will be tailored to New Zealanders by incorporating cultural and te ao Maori perspectives.
However, it seemed the focus was too narrow and focused only on Maori perspectives.
We are one nation, a mix of European, Maori, Asian and other ancestries. CORANZ is talking about all New Zealanders. To coin an oft-used phrase, “We are a team of 5 million.”
CORANZ’s election charter said, “The index for national prosperity, Gross Domestic Product (GDP) based solely on economic indicators, should be replaced by a Genuine Progress Indicator (GPI_ based on three values – social, environmental and economic, to thus fully measure the quality of life.”
One of the paradoxes of society was that while the economic standard of living and technology had increased, the country’s environmental standard had declined.
Once New Zealanders were land-conscious, outdoor people with physical and mental health and largely satisfaction and contentment. Ironically today we are better housed, better nourished and better entertained but were less prepared to inherit the land or to carry on the pursuit of happiness. Technological developments are amazing and even bewildering, but at the same time, we are falling prey to the weakness of an indoor nation and the flabbiness of a sedentary society.
Gross Domestic Product and its preoccupation with only dollars should not be the chief index to the state of the nation. Statistics on consumerism such as automobile, television sets or washing machine sales or houses built are not a measure of the happiness of society and the health of the environment.
“That he’s mad, ’tis true, ’tis true ’tis pity, And pity ’tis, ’tis true,”
from Hamlet by William Shakespeare is apt.
The mad one is government giving in to wealthy moneyed interests (corporates) who donate to political parties. The business interests have a vested interest in the futile policy of “growth for growth’s sake”.
The pity is the people and the environment and social stability suffer. The ironic twist is the people voted the “mad” politicians in.
Growth of GDP. Companies love it, politicians idolise and extol it and most people blindingly believe the politicians and see GDP growth as a good thing.
But what if it’s a fallacy?
What if limitless, endless GDP growth is bad?
UK economist Kate Raworth is right. We need to support her open mind questioning of the mantra that producing and selling more and more every year is the right way.
While some planned growth is good, it’s nonsense to think sales of material goods like washing machines, cars and mobile phones and sales measure of the quality of life. That pursuit of material growth has brought short sighted exploitation of the environment and resources and also brought pollution and social inequality.
Plastics in wildlife and even human bodies now occurs. People breathe polluted air. Land offers degradation, there’s water shortage, nitrate pollution of drinking water (e.g. Canterbury and other regions) with bowel cancer rates as per a Danish study of 2.7 million, ocean and freshwater acidification and so the list goes on.
A wealthy explotive elite benefit from the worshipping of GDP. The richest one percent of people worldwide own half of the world’s material wealth.
It’s a problem the world’s economies are structurally dependent on growth.
designed and run to expect and demand and depend upon GDP increasing endlessly.
The politicians like Roger Douglas of Rogernomics notoriety, Ruth Richardson and incompetent ones like “land surveyor turned finance minister” Bill Birch told us in the 20th-century growth would benefit us – “trickle-down economics” they called it. But they lied. It hasn’t worked.
It’s urgent that NZ stops the GDP folly. It’s like a dog chasing its tail.