Brian Fallow 's Opinion

The Economics Editor of the NZ Herald

Brian Fallow: We know exactly how lucky we are

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New Zealand rates well for lifestyle but country has its work cut out encouraging expatriates to come home

When asked if they were confident they could afford to buy a home in their preferred location in New Zealand, more expatriates said no than yes. Photo / Christine Cornege
When asked if they were confident they could afford to buy a home in their preferred location in New Zealand, more expatriates said no than yes. Photo / Christine Cornege

When asked if they were confident they could afford to buy a home in their preferred location in New Zealand, more expatriates said no than yes.

New Zealand is the seventh best country in the world to be born in, according to the Economist Intelligence Unit.

And a survey of expatriates Colmar Brunton has undertaken for Kea found 62 per cent consider that, taking everything into account, New Zealand is one of the best places in the world to live.

Readers of a certain age may recall a jaunty little ditty by John Clarke, in the persona of Fred Dagg, that went: "We don't know how lucky we are."

But perhaps we do. Statistics New Zealand's most recent general social survey found 87 per cent of New Zealanders are satisfied or very satisfied with their lives overall. That is higher than the OECD average, it says, and similar to Australia, the United States and Canada.

So how come the Kiwi diaspora is so large? John Clarke joined it years ago. At least he had the good sense to go to Australia, one of the few countries to outrank us in the quality of life index produced late last year by the Economist Intelligence Unit, a sister company of the Economist , repeating a similar exercise 25 years earlier.

The others ahead of us are Switzerland, Norway, Sweden, Denmark and Singapore. We outscore the United States and the larger European economies by a substantial margin.
The rankings reflect a range of indicators of well-being.

They include per capita gross domestic product (an indicator of incomes), life expectancy at birth, divorce rates (as a proxy for the quality of family life), the unemployment rate, climate (variations from an equable 14C), homicide rates, membership of social organisations, ratings for corruption and what proportion of legislators are women (an indicator of gender equality).

The factors have been chosen and weighted because they best explain statistically the variation among countries in life satisfaction scores, like those in New Zealand's general social survey.

Incomes matter, but only up to a point.

GDP per capita alone explains almost two-thirds of the variation in life satisfaction, the EIU said.

"However, over several decades there has been only a very modest upward trend in average life satisfaction scores in developed countries, whereas average income has grown substantially."

International comparisons are all well and good but Statistics NZ's general social survey also threw up some sobering results.

Only just over half of the more than 8000 people surveyed reckoned they had enough or more than enough money to meet everyday needs for such things as accommodation, food and clothing.

Only two-thirds reported having no major problems with the house or flat they lived in, implying one-third do.

And nearly a third said they had felt lonely some, most or all of the time in the last four weeks.

Maybe distance lends enchantment to the view.

The Kea survey of more than 12,000 expatriates found a generally positive view of New Zealand among those who have left it, but less so when it came to nitty-gritty questions relevant to whether they would return.

So 62 per cent agreed it is one of the best places in the world to live while only 8 per cent disagreed, and 56 per cent rated it a safe place to live while 8 per cent disagreed.

On other factors the margin was narrower but a plurality rated New Zealand ahead of where they now live for cultural tolerance and for gender equality, both generally and in business.

But when asked if they could comfortably afford to raise a family here at New Zealand salary levels, 41 per cent said no against 12 per cent who said yes. The margin was even wider among those expatriates earning more than $100,000 a year. Likewise when asked if they were confident they could afford to buy a home in their preferred location in New Zealand, more expatriates said no than yes. That response was strongest among those who come from Auckland.

A plurality also disagreed with the proposition that New Zealand is an affordable place to retire to.

Unsurprisingly the Kea survey found career opportunities to be the main driver of the diaspora. Nearly half cited either general employment or income prospects, or a specific job offer from an employer overseas, or a request from a New Zealand employer to transfer overseas, as their reason for emigrating. Half earn more than $100,000 a year and 29 per cent more than $150,000. The great majority, 84 per cent, have a tertiary education.

When asked if they were likely to return to live in New Zealand 46 per cent said definitely or probably, 22 per cent said definitely or probably not, and 32 per cent were undecided.
The main reasons given for returning to New Zealand, when and if they did, by a substantial margin were that it is home, for the lifestyle, and family connections or obligations.

The main factors cited as making it unlikely they would return were a lack of career prospects in New Zealand, family connections or obligations overseas, or a preference for the lifestyle where they are.

Most expressed a qualified optimism about the country's prospects over the next 10 years. Twenty per cent said New Zealand was doing most things right and would make a lot of progress, while 49 per cent agreed that things would get better but were concerned the country would not reach its full potential.

Some 14 per cent believe the country will move back a little and 4 per cent that it will probably slide back a long way.

So what are we to make of this?

When it comes to the financial dimensions of the challenge of encouraging expatriates to come home, the country has its work cut out. New Zealand's per capita GDP, the foundation of incomes, puts us two-thirds of the way down the OECD rankings, alongside South Korea and well below most of the countries we prefer to compare ourselves with. At the same time we rank fourth from the top of the OECD in terms of overvalued housing.

The income gap has taken decades to become this wide and will take a long time to correct. Some of the gap may be inevitable, the result of a global trend for more specialised and highly paid occupations to concentrate in large cities and for incomes to diverge between those hubs and their hinterlands. New Zealand is all hinterland.

All of which makes it important to take care of the non-material elements of quality of life. Some of the trends there are discouraging too, environmental degradation for example.

But unless we do better it will be more and more a case that New Zealand is a great place to be from.

- NZ Herald

Brian Fallow

The Economics Editor of the NZ Herald

Brian Fallow is the New Zealand Herald's economics editor. A Southlander happily transplanted to Wellington, he has been a journalist since 1984 and has covered the economy and related areas of public policy for the Herald since 1995. Why the economy? Because it is where we all live and because the forces at work in it can really mess up people's lives if we are not careful.

Read more by Brian Fallow

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