New Zealand outpacing Australia in economic reform
• Report looks at National-led government’s reform achievements
• Key’s political style of ‘incremental radicalism’ a lesson for Australia
• New Zealand closing the gap on GDP growth with Australia
Wellington, 3 December 2014 - Executive Director of The New Zealand Initiative, Dr Oliver Hartwich, is today publishing
his new monograph Quiet Achievers: The New Zealand Path to Reform. It will be presented by Australia’s Minister for
Finance, Senator the Hon. Mathias Cormann, at an event in Parliament House, Canberra.
Dr Hartwich’s paper, published by the Menzies Research Centre (a Canberra based think tank), compares the successes of
New Zealand’s National Party-led government in reducing government spending, and improving welfare systems since 2008
with Australia’s poor reform successes of the past decade.
Dr Oliver Hartwich says that the Australian political agenda has been overshadowed by personalities rather than
policies; meanwhile New Zealand has been making great progress in streamlining its economy and positioning itself as a
competitive trading nation.
Dr Hartwich says Key differs from previous centre-right reforming governments, with a strategy of “incremental
radicalism” where reform is built on consensus rather than confrontation, and suggests Tony Abbott’s government would
benefit from studying New Zealand as a model for reform.
“Having analysed the Key government’s behaviour over its first two terms in power, there are four P’s which emerge:
Patience, Preparation, Pragmatism and Principles.”
“The adoption of the New Zealand method of quiet, incremental radicalism may be Australia’s best hope of rediscovering
the art of reform” says Dr Hartwich.
New Zealand is also closing the gap with Australia in GDP growth.
This year, New Zealand rose to 17th place on the World Economic Forum’s global competitive index, whilst Australia
dropped to 22nd place. Over the past three years, New Zealand’s growth in GDP per capita has exceeded that of Australia.
Dr Hartwich says that while New Zealand’s overall per capita GDP is still behind that in Australia, there are signs that
this may change, in part because of the economic reforms of the Key government.
“New Zealand now looks the more competitive and freer of the two economies”.
“It reflects both Australia’s competitive decline and New Zealand’s more recent reforms. At the same time, New Zealand
is benefitting from a terms-of-trade boom which Australia used to enjoy but does not do so anymore.”
About the New Zealand Initiative
The New Zealand Initiative is an evidence-based think tank and research institute, which is supported by a membership
organisation that counts some of the country’s leading visionaries, business leaders and political thinkers among its
ranks.
Our members are committed to developing policies to make New Zealand a better country for all its citizens. We believe
all New Zealanders deserve a world-class education system, affordable housing, a healthy environment, sound public
finances and a stable currency.
The New Zealand Initiative pursues this goal by participating in public life, and making a contribution to public
discussions.
For more information visit www.nzinitiative.org.nz
ENDS