New Zealand is unlikely to match Australia's in the near future, says Professor David Mayes, the new BNZ chair of finance at the University of Auckland Business School.Professor Mayes is a former chief manager of the New Zealand Reserve Bank and has advis
New Zealand is unlikely to match Australia’s in the near future, says Professor David Mayes, the new BNZ chair of finance at the University of Auckland Business School.
Professor Mayes is a former chief manager of the New Zealand Reserve Bank and has advised central banks around the world.
Speaking on TV3’s The Nation today, Professor Mayes said the policies were not yet in place for New Zealand to accelerate its growth to match Australia’s.
“It's certainly possible. Is it likely? I would have thought it's not particularly likely. I think we would have to be much more closely involved with Australia if we really were going to have their sorts of rates of growth.
“I think if the ideas, if the knowledge economy is being pursued, then we could actually get there, because you’ve got to ask what is it we're going to be better at than other people are, in order for us to be able to increase at that sort of rate.
“Well quite clearly it's not going to be mining, we're not going be able to emulate Australia in that sort of way. So we have to be able to do better than Australia in areas where we have something where there's some possibility for an advantage, and human capital is the most obvious.”
Lucky country
New Zealand was lucky to emerge relatively unscathed from the world financial crisis, Professor Mayes said. New Zealand was saved by the structure of its economy.
“You may feel this is a recession of magnitude [that] can be described as luck under any circumstance, but compared to what's been happening in some of the other countries, where they’ve been going backwards by nearly 20% in a year, we've been lucky.
“If we were a major investment goods producer then we would have had a really bad time, but the fact that we're producing things that people want, even in recessions, means that we don’t go down anything like as much as some others.”
Professor Mayes said there wasn’t much New Zealand could do to prevent its exposure to future shocks.
“What you can do is try to do something about the effect it has on you. A lot of people have suffered far more than they needed to, because they believed they were largely immune and it wouldn’t happen to them, and it turned out to be wrong.”
• The Nation screens again at 9am Sunday, June 13
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