Key again takes issue with Bollard's comments
Prime Minister John Key says he isn't going to "write New Zealand off" just because Reserve Bank Governor Alan Bollard says the Government's goal of closing the wage gap with Australia is unrealistic.
Dr Bollard said yesterday he didn't think the gap could be closed because Australia was unusually blessed with minerals which were sprinkled across its surface in easily accessible places where they could be mined without anyone becoming upset.
The Government's target is to close the wage gap, which is running at about 30 percent, by 2025.
Mr Key said at his post-cabinet press conference Dr Bollard's comments about Australia's mineral wealth could not be denied.
"Only a fool would attempt to say otherwise," Mr Key said.
"Does that mean though that New Zealand can't close the gap...I would say no.
"I think there are a lot of different factors, New Zealand for instance has an abundance of water and Australia does not."
Mr Key said that 30 years ago Australia had the same resources it had today, and wage rates were equal.
"It's a substantial challenge but I don't think we should be as fatalistic as to say we can't do it," he said.
"There's plenty of capacity for us to use water more effectively. Irrigation presents huge opportunities, there's I think a million hectares of land that could be irrigated properly and that would have quite a substantial impact on our GDP."
Earlier today Mr Key described Dr Bollard's comments as negative and wrong.
"It's a fairly negative view about New Zealand's future and I don't agree with it," he said.
Comments
Dr Bollocks
No wonder Labour left the economy in such a mess
Key takes exception because
Key takes exception because Bollard talks common sense and is right. As is Brash.
You can't tax any nation into prosperity. Key knows that. But, he is simply doing what he is told to do.
NZvAustralia
So disappointed to Hear Bollard and Cunliffe effectively refuse to even try and improve NZ - the sooner such losers are consigned to the dustbin of insignificance the better.
Common sense
Both Labour& National neglected elements of our economy for various different reasons. They are both guilty of putting political expediency above reality. The effect of this was to allow the differences between our economy and Australia's to widen further than it might have. No point in grizzling now- its history. Key the politician is hopeful we may catch up but I believe Bollard as the practioner knows this wont happen. The trick is to take what opportunities that present and do a good job so we continue to benefit as best we can.
Closing the gap with Australia
Having exported most of our manufacturing to cheap labour countries and continuing to export our educated and skilled human resource and emerging innovative capacity, what remains is increasingly foreign owned. No abundance of mineral wealth can compensate for outsourcing and exappropriating productive assets on which a viable eoconomy depends. This alone, if nothing else, makes a catch-up with Australia a hard ask.
Australian Mineral GDP
is I believe around 12%. Not as large as I suspect most people suspect. A 12% (or actually less advantage as NZ does have oil, coal and other minerals) is not great.. Japan created great wealth with no natural mineral wealth. It is up to us as New Zealanders to do better. We can catch if not beat Australia.