The Opposition Leader has visited New Zealand three times since 2014, forged a friendship with former Prime Minister John Key and met with various Kiwi ministers when they’ve visited Australia.
And he’s become convinced that the lessons from New Zealand’s oft-vaunted economic recovery over the past decade are particularly pertinent to South Australia in 2017.
“A lot of MPs travel overseas and want to look at what’s happening [around the world], but we’ve got very good things to look at just across the ditch,” Steven Marshall tells InDaily.
“I think NZ has many similarities to SA, and there are many lessons to learn from the economic transformation that occurred under John Key and [his successor] Bill English.
“When John Key came to power in ’08, 3000 New Zealanders were leaving for Australia every month, they were running massive deficit budgets, they had spiralling unemployment, a low-growth economy and many people were giving up hope.
“Since that time there’s been an enormous, incredible economic transformation… they now have very substantial GDP growth, low unemployment and most importantly improved social services at the same time.”
New Zealand’s unemployment rate fell to 4.9 per cent in the first quarter of this year and, while economic growth has slowed, GDP still grew by 3.4 per cent in the last financial year, outstripping Australia’s 2.3 per cent.
SA has averaged growth of 1.4 per cent over the last five years, with last month’s budget predicting an increase to 2.25 per cent in 2017-18.
“We need to look at why it’s much lower than the national average, and focus on growing the size of the economy through exports,” Marshall says.
NZ’s growth was predicated largely on agricultural exports and tourism, and the SA Liberal leader says a state-based recovery should follow a similar blueprint.
“They’ve got a range of things that are very similar and relevant to SA,” he insists.
“The sorts of things they’ve focussed on – agricultural exports, tourism, international education – are a very similar profile to our own exports here in SA… but unlike NZ, SA has really languished.
“In 2002, SA represented 7.4 per cent of Australia’s exports, but we’re now languishing at 4 per cent. If we’d kept pace, our exports would be [worth an additional] $9 billion per year now – that would translate to another 90,000 employees in SA.”
Marshall believes the state’s export performance is “one of the fundamental reasons why our economy has stagnated”, an argument that puts him in direct conflict with his former leader and one-time running mate Martin Hamilton-Smith who, as Jay Weatherill’s Trade Minister, is effectively the state’s exports spokesman.
Ironically, Marshall says the idea of a pilgrimage to NZ was first put to him by another man often touted as a prospective state Liberal leader – former foreign minister and current High Commissioner to London Alexander Downer.
Downer was briefly the state party’s president in the lead-up to the failed 2014 election, at which Marshall led the Liberals to a 53 per cent statewide vote but didn’t win enough seats to form government.
After the defeat, Marshall says, Downer suggested to him that he visit NZ to assess the National Party government firsthand.
“He had a very strong regard for the work John Key and Bill English [then-deputy PM, who took the reins from Key last year] were doing to resurrect their economy,” Marshall explains.
“I was greeted by John Key [who] was very welcoming and encouraged me to meet with as many of his cabinet and chief executives as possible… he was very willing to share the lessons he had learned.”
One of Key’s trademark phrases has since implanted itself firmly in Marshall’s vernacular: “You don’t make money selling things to each other.”
“The Liberal Party has a very ambitious goal to increase exports… like John Key, we realise we’re not going to get rich selling lattes to each other,” Marshall says now, reiterating one of his Key phrases.
“But I think there are other things that came out of my NZ experience – the respect he held for the NZ public service, the way he spoke about having an open and transparent public service focused on improving services to the public.”
NZ’s approach to welfare reform, dedicated to weaning people off reliance on long-term benefits, has been a touchstone of the political right in Australia, and was cited as a blueprint for the Turnbull Government’s approach.
As Marshall explains it, the approach to social services is to commit the money to “put services in upfront… put a fence at the top of the cliff rather than an ambulance at the bottom”.
“They have put a lot more money into areas like child protection, reducing recidivism and streamlining social services,” he says.
“Labor’s model is purely limited to welfare only, building welfare dependency… I think the difference in philosophy in the Liberal Party is we want to build capacity… to get [recipients] out of a situation where they’re dependent on welfare.”
He insists it’s a philosophy that “appeals to people who have a strong social justice mindset, but also those people who have a strong economically rational mindset”.
“We can improve outcomes, but at the same time reduce the burden to the taxpayers,” he says.
“And we can definitely get SA back into the trajectory to prosperity and allowing individuals to fulfil their true potential.”
The success of the NZ economic ‘miracle’ – and the effectiveness of its welfare approach – is hotly debated.
Key came to power after campaigning on the issue of the Kiwi ‘brain drain’, standing in the 34,500-capacity Wellington Stadium to demonstrate the number of New Zealanders who crossed the ditch each year, and promising to reverse the trend.
He has also been an influence and mentor to Malcolm Turnbull, who once enthused at the former PM’s ability to “achieve very significant economic reforms in New Zealand… by taking complex issues and then making the case for them”.
But others have been more sceptical. Economist John Quiggin wrote in 2015 that while “the statistics quoted by the Kiwiphiles are superficially impressive… it doesn’t take a lot of digging to find that the reality is radically different”.
“New Zealand’s living standards, once comparable with Australia’s, now lag significantly,” he wrote.
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