Wellington: Lifting our Sights

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Wellington Lifting our Sights

• October 2008

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What do these two men have in common?
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NZs GDP per capita is sliding rapidly relative
to other nations
World Rankings GDP per Capita (PPP)

• 1950
• Qatar
• Kuwait
• United Arab Emirates
• United States
• Switzerland
• New Zealand
• Luxembourg
• Venezuela
• Australia
• Canada

• 2007
• Qatar
• Luxembourg
• Norway
• Brunei Darussalam
• Singapore
• United States
• Ireland
• Hong Kong SAR
• Switzerland
• Kuwait
• New Zealand

• 2025 (Projected)
• Luxembourg
• Singapore
• Qatar
• Hong Kong SAR
• Norway
• Bahrain
• Ireland
• Kuwait
• United States
• Oman
• Botswana
• Kazakhstan
• 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
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We are working long hours, but our productivity
is falling behind our peers
NZs Ranking Amongst 24 OECD Countries 1960
2007 (1)










7th Highest
Hours Worked Per Worker
12th Highest
20th Highest
GDP per Hour Worked
21st Highest

• (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

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Its time to lift our sights

• 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

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We should aim to be back in the Worlds GDP per
Capita Top 10 by 2025
-47
NZs World Ranking in GDP per Capita (PPP)

• Back Where We Belong
• 4.5 pa growth in GDP per capita
• Return to the Top 10 by 2025

2025?
1980 27th Wealthiest

• 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

2007 32nd Wealthiest
2025?
1980-2007 1.4 pa real growth in GDP per
capita, slipping further down the international
rankings
2007-2025 More of the same, or change the game?
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)
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Korea, Ireland, Taiwan and Singapore have all
shown this level of growth is possible
Real Annual Growth in GDP per Capita of the
Worlds Wealthiest Nations 1987-2007





































Real GDP per Capita growth rate required for NZ
to return to Top 10 by 2025
Source IMF World Economic Outlook Database
(April 2008) Sample is worlds 40 wealthiest
countries by GDP per capita (PPP), excluding
those that did not exist as independent states in
1987
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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

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Successful cities set a virtuous cycle in motion
BusinessActivityIncreases
Wealth Is Created Tax Base Grows
New Businesses Emerge,Established Business Grow
Well-paid JobsAre Created
Civic AmenitiesAnd InfrastructureImprove
Skilled LabourSupply Grows
Quality OfLife Improves

• Source The Boston Consulting Group

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wild at heart Wellington Airport
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Insert image of Wellington Airport today
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Working together to connect Wellington to the
world
4,418
WIAL Passenger Numbers 1998-08 (Thousands of
Pax, Year to March)









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- 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.

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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