wellington: lifting our sights october 2008. what do these two men have in common?
TRANSCRIPT
Wellington: Lifting our Sights
October 2008
What do these two men have in common?
NZ’s GDP per capita is sliding rapidly relative to other nations
1950
1. Qatar2. Kuwait3. United Arab Emirates4. United States5. Switzerland6. New Zealand7. Luxembourg8. Venezuela9. Australia10.Canada
2007
1. Qatar 2. Luxembourg 3. Norway 4. Brunei Darussalam 5. Singapore 6. United States 7. Ireland 8. Hong Kong SAR 9. Switzerland 10.Kuwait …32.New Zealand
2025 (Projected)
1. Luxembourg 2. Singapore 3. Qatar 4. Hong Kong SAR 5. Norway 6. Bahrain 7. Ireland 8. Kuwait 9. United States 10.Oman …33.Botswana …42.Kazakhstan …47.New Zealand
Sources: 1950 GDP per capita rankings from The Conference Board & Groningen Growth and Development Centre, Total Economy Database (Sept 2008)2007 GDP per capita rankings from IMF World Economic Outlook Database (April 2008) 2025 projections based on extrapolation of long term real GDP per capita growth forecasts from IMF World Economic Outlook Database (April 2008) IMF rankings are adjusted for purchasing power parity Morrison & Co analysis
World Rankings: GDP per Capita (PPP)
We are working long hours, but our productivity is falling behind our peers
7th Highest
20th Highest
21st Highest
12th Highest
GDP perHour Worked
Hours WorkedPer Worker
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NZ’s Ranking Amongst 24 OECD Countries: 1960 – 2007 (1)
(1) Includes all OECD countries that existed as independent states in 1960 (ie excludes Germany, Czech Republic, Hungary, Poland & Slovakia)
Source: The Conference Board and Groningen Growth and Development Centre, Total Economy Database, September 2008
“New Zealand needs a vision that will excite and motivate every
citizen to reach new and heretofore unheard of heights.
There is no reason why this country cannot be one of the
most prosperous nations in the world and a model for others.”
Dr Michael Porter, 1998
It’s time to lift our sights
We should aim to be back in the World’s GDP per Capita Top 10 by 2025
198027th Wealthiest
2007
32nd Wealthiest
2025?
2025?
1980-20071.4% pa real growth in GDP per capita,
slipping further down the international rankings
2007-2025More of the same,
or change the game?
“Back Where We Belong”• 4.5% pa growth in GDP per capita• Return to the Top 10 by 2025
“Beaten by Borat”• 1.5% pa growth in GDP per capita (in line with IMF forecasts)• 47th Wealthiest Nation by 2025• Fall below Botswana and Kazakhstan
NZ’s World Ranking in GDP per Capita (PPP)
Sources: 1980 to 2007 data from IMF World Economic Outlook Database (April 2008) 2025 projection based on extrapolation of long term real GDP per capita growth forecasts from IMF World Economic Outlook Database (April 2008)
Korea, Ireland, Taiwan and Singapore have all shown this level of growth is possible
0.30.4
0.70.8
1.21.4
1.51.61.61.61.61.71.71.7
1.81.8
1.91.9
2.02.02.12.1
2.22.32.3
2.52.52.5
2.62.8
3.03.2
3.84.5
4.95.25.2
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Real GDP per Capita growthrate required for NZ
to return to Top 10 by 2025
Real Annual Growth in GDP per Capita of the World’s Wealthiest Nations: 1987-2007
Source: IMF World Economic Outlook Database (April 2008)Sample is world’s 40 wealthiest countries by GDP per capita (PPP), excluding
those that did not exist as independent states in 1987
What role can Wellington play?
“Since many of the essential determinants of
economic performance appear to reside in regions,
national policies will be necessary but not sufficient.”
- Michael Porter
Successful cities set a virtuous cycle in motion
Source: The Boston Consulting Group
BusinessActivity
Increases
Wealth Is Created+
Tax Base Grows
Civic AmenitiesAnd Infrastructure
Improve
Quality OfLife Improves
Skilled LabourSupply Grows
New Businesses Emerge,Established Business Grow
Well-paid JobsAre Created
wild at heart Wellington Airport
Insert image of Wellington Airport today
Working together to connect Wellington to the world
12
3,1233,454
4,418
373
446
603
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WIAL Passenger Numbers: 1998-08(Thousands of Pax, Year to March)
- NBR, October 2, 2008
• The Public Transport Management Act will allow councils to redefine
“partnership” as a “Victorian marriage” with the councils as “father”
• Councils will determine what consumers need and design services and
fares to meet these perceived needs
• They will then tender closely-specified service contracts to private operators
• Operators will win contracts by offering minimum compliance at least cost
• Councils (i.e. ratepayers) will carry revenue risk from patronage fluctuations
• Councils will attempt to ensure contract compliance with a battery of “sticks
and carrots” and costly systems to monitor performance.
In closing…
The time has come for New Zealand to commit to an ambitious, measurable goal
Wellington needs to set its own ambitious, measurable goal- Given what we have to work with, we should set ourselves a growth
target higher than the overall New Zealand goal
The community needs to understand the virtuous cycle - We need economic growth so we can afford the social,
environmental and cultural elements of our vision for Wellington
All sectors have a role to play, we need a spirit of genuine partnership- Public and private sector pursuing the same goal…- …But recognising and respecting each others’ respective roles