And so am I.
Here's one that's well up my list: roll out the infrastructure we need, and pull finger about it while you're at it.
The outgoing government, for all the good stuff it did in some areas, was desperately slow at getting long overdue infrastructure built: 30 year timeframes before we would even start building airport and North Shore links in Auckland were just absurd. And as I've said before and the OECD has said as well this is a once in a generation opportunity to fill our boots with unusually cheap funding to pay for it.
But you don't have to take just my word for it. Here's the IMF's wording in this month's update to its flagship World Economic Outlook (p28, Chapter 1):
Fire up the JCBs.Investment in physical infrastructure: Empirical evidence from advanced economies suggests that, if done right, infrastructure investment brings both short- and long-term benefits: an increase in public investment of 1 percent of GDP can raise the level of output by 1½ percent over the medium term...After three decades of almost continuous decline, public investment in infrastructure and the stock of public capital as a share of output are near historic lows in advanced economies. Many countries could take advantage of the favorable funding environment [see? see?] to improve the quality of the existing infrastructure stock and implement new projects (see Chapter 3 of the October 2014 WEO). Countries with deficits in infrastructure include Australia, Canada, Germany, the United Kingdom, and the United States [and us, as I pointed out for example here]. Priorities vary but, in most cases, include upgrading surface transportation and improving infrastructure technologies (in high-speed rail, ports, telecommunications, broadband), as well as green investments.
Like all those shovel ready infrastructure projects Obama put in place.
ReplyDeleteIt can easily spin out into Keynesian pump priming.
The South Australian government went into a spate of monument building and thereby wrecked the economy.
Thanks for the comment. Sure, some of these things can be boondoggles, as the Americans call them, and you'd want to keep the process honest. We haven't always been great at following proper cost/benefit analysis and prioritising the biggest payoff projects - a few months back I gave evidence at the East West Link motorway inquiry where I said I couldn't see why lower payoff options were being picked ahead of higher payoff ones - and like a lot of other places we haven't been terrific at controlling infrastructure project costs.
ReplyDeleteThat said, I think everyone would agree that NZ currently has a long list of worthwhile but unbuilt infrastructure projects. We've picked off very few - the Waterview tunnel is an all too rare example of a good one (http://www.newshub.co.nz/home/new-zealand/2017/10/waterview-tunnel-slashes-commuting-times.html) - so we're some distance from the 'monuments' phase (though I have my doubts about the plans to shift Auckland port operations north, which look to have some aspects of the monumental to them).