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How much can New Zealand achieve by 1993 if we really try hard? (published 1989) The uncertainties and anxieties of the voting public in New Zealand come to a focus around one question: Where is the country going? Where are we going to end up? I cannot tell you the answer. As a backbench MP, I can make only minor contributions to the decisions about where this country is going. Instead let me change the question into something which I can answer, with knowledge and authority, based on 4 years as Finance Minister. Where can we end up by 1993? How much can we accomplish, in 4 years if we seriously want to build on what Labour has already achieved? Forget about "policy" for a moment. Let's start with vision, realistic dreams that we have the power to make come true, by 1993, if we try. Vision is what Labour was about in 1935 and 1984. The future is built on the goals we set ourselves. "Policy" is a tool. It comes later. We select among policy options by asking ourselves: "Which combination can do most to achieve our goal?" I am publishing these goals because I want them wide open to scrutiny and testing against both public opinion and the knowledge of experts. If New Zealanders can once again reach a consensus about desirable and realistic goals, we will have mastered the secret of achieving them. In my view, we can realistically achieve the following economic goals over the next 4 years, by the end of 1993: Sustainable economic growth rates in the 3-5% range per year, up from an average 0.9% in 1973-83 and an average 1.8% since then. Stable prices, with inflation in the 0-2% range, compared with our average of 13.3% in 1974-84 and our 11.1% average since 1984. (The Reserve Bank says we should be able to achieve this target by the end of 1992.) Unemployment halved from its current 7.4% of the labour force, into the range now occupied by the best 25% of the OECD nations. Interest rates down into the 7-10% range, making a positive contribution to improved investment in our future potential. Public debt halved from its current level, with resultant ongoing reductions in the level of Government debt servicing payments. The tax burden on the community down by 5% of GDP, via improved growth, lower debt servicing costs and fiscal reform. Real wage growth around 2% a year, more than 20% a decade, once current unemployment is absorbed and debt substantially reduced. These are not separate, ad hoc objectives. They are locked together so that each one supports the economic achievement of all the others. My economic goals, achieved by 1993, would very significantly improve the living standard and quality of life for all New Zealanders. They would give most people a chance to own their home, give their children more help, and set aside a nest egg for their retirement. Quality of life would improve. It would be easier to upgrade the family car, have more meals out, and the occasional overseas holiday. Economic achievement also opens new opportunities for the jobless and disadvantaged to play a more productive role in community life. That works directly to reduce the alienation that is driving rising crime, racial conflict and social tension in our society today. Poor skills, low income, bad parenting and crime are a vicious circle. Opportunity, incentive and skill can turn that into a virtuous circle. Sound social policies will support and advance that process by targeting those who most need incentives, encouragement and help. We want a virtuous circle where every economic gain improves social outcomes and each social policy reform adds to economic performance. The task of Government is to harness equity and efficiency together, make them serve each other and increase total social wellbeing. On the other hand, we will never succeed if all we offer is soft options. There has to be an element of "tough love" in the mixture. So let me spell out some social goals we can also achieve by 1993. Again, each goal is designed to support and reinforce all the others: |