New Zealand economy Essay

            For over a decade, New Zealand has been undergoing continuous economic reforms under the various, successive governments.  These reforms centred mainly on transforming New Zealand from a highly protectionist and regulated economy to a liberalised free-trade economy.[1]  Even though there have been continuous efforts in restructuring New Zealand’s economy, and many improvements in areas especially as to tax reform and labour market policies, the country continues to underperform in many aspects of the economic development.

            Part of the problem is that there just aren’t enough people in New Zealand.  The nation is 50% larger than the state of Washington in the U.S.A., but just has over half of the population.  It is considered one of the most underpopulated countries in the world, and it has the lowest population density of any country in the OECD.[2]  People should be moving into New Zealand to grasps the opportunity for growth and development in the growth.  But what has been happening is that people from New Zealand are moving out.  Migration has had an impact on the country’s economic development as the nation’s talents migrate to Australia, Britain and Europe.  What the government should thus focus on is providing enough incentives to keep the people in the country and to further prevent this brain drain.

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            There are some incentives in place to address this migration issue, as a result of various economic reforms in the past.   For instance, New Zealand has switched from income to consumption tax, and has improved its welfare and labour systems.[3]  One way to improve incentives, and to discourage citizens from migrating to Britain and other countries, is to enforce a system of transparency and accountability in the government.  This reinforces individual reforms as well and restores public confidence in the political parties and the government as a whole.   Another incentive is to encourage local employment by providing certain tax exemptions or deductions to foreign investors who are intent in setting up shop in New Zealand.  The entry of more investments will bring about more business for the country, and this is bound to help improve local employment.  New Zealanders in services sectors, such as doctors and nurses, and fresh graduates, should also receive some incentives either in terms of tax benefits or welfare privileges, to entice them to stay and use their talents at home.  This way people will opt to stay in the country instead of migrating abroad for better opportunities.

BIBLIOGRAPHY

New Zealand.  (2006).  Wikipedia, The Free Encyclopedia.  Retrieved 25 May 2006 from: http://en.wikipedia.org/wiki/New_Zealand#Economy

Darwall, Rupert. (April 2003). Market Reform: Lesson from New Zealand. Policy Review Online.  Retrieved 25 May 2006 from: http://www.policyreview.org/apr03/darwall.html

Henderson, David.  (28 November 1995). Economic Reform: New Zealand in an International Perspective.  Welfare Chamber of Commerce, Breakfast Address.  Retrieved 25 May 2006 from: http://www.nzbr.org.nz/documents/speeches/speeches-95-96/wgtncoc.pdf

[1] New Zealand.  (2006).  Wikipedia, The Free Encyclopedia.  Retrieved 25 May 2006 from: http://en.wikipedia.org/wiki/New_Zealand#Economy
[2] Darwall, Rupert. (April 2003). Market Reform: Lesson from New Zealand. Policy Review Online.  Retrieved 25 May 2006 from: http://www.policyreview.org/apr03/darwall.html
[3] Henderson, David.  (28 November 1995). Economic Reform: New Zealand in an International Perspective.  Welfare Chamber of Commerce, Breakfast Address.  Retrieved 25 May 2006 from: http://www.nzbr.org.nz/documents/speeches/speeches-95-96/wgtncoc.pdf

 

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