NZ already top of SPI v GDP – need more focus on GDP

New Zealand’s task isn’t so easy as the obvious policy wins have been taken. Being at the top edge of the policy window is both a cause for celebration and for despondency. While it’s fantastic news that we spend things well, it is hard to believe this is as good as it gets, considering all the issues we have. 

Unfortunately, those banking on great things from policy changes should probably lower their expectations. While gains are possible, they are going to take time, hard work, and, inevitably, trade-offs. On the other hand, attention should be given to protecting what we have as there is a high possibility of a superficially wonderful policy making things worse. 
In New Zealand’s case, the easiest improvement path is one that currently seems less palatable. 

Overall, New Zealand is ranked 10th on the SPI index, behind the usual Scandinavian suspects. However, in terms of bang per buck (SPI per logarithmic scale – fig 2), New Zealand is first. What NZ seems to need is more bucks! 

Based on this data, for New Zealand’s “wellbeing Budget” to be more than a slogan, the Government probably should give more focus to increasing GDP, not less.

On the positive side, we appear to have the skills to put any extra money to good use.