Australian columnist bemoans economic performance compared to New Zealand

New Zealand beating Australia - it's an awful state of affairs, says Aussie economist Jason Murphy.

Australian economist Jason Murphy says New Zealand is 'smoking' the lucky country when it comes to having a healthy economy.

I am not happy. New Zealand has beaten us again.

Not in Rugby. I'd be fine with that. They have the All Blacks but we beat them in cricket so it all evens out.

This is much bigger. New Zealand apparently beats us in prosperity. The Legatum Institute just dropped its annual prosperity index and New Zealand is now number one. Number One. We languish at sixth.

It's an awful state of affairs and I'm sorry to have to inform you. Here's the top ten.

1. New Zealand
2. Norway
3. Finland
4. Switzerland
5. Canada
6. Australia
7. Netherlands
8. Sweden
9. Denmark
10. United Kingdom

Unfortunately, we can't pretend this report is wrong. It's clear something good is going on in NZ. Global markets are warming to the Kiwi economy. Their currency is getting stronger, and is now worth much the same as ours.

Also, the flood of New Zealanders arriving in our nation has turned to a trickle.
(In fact, for the first time in two decades, last year, more Aussies moved across the ditch than Kiwis showed up here.

New Zealand gets glowing praise in the report.

They praise it for high levels of personal freedom, but especially for being "a nation with the strongest social capital in the world, where 99 per cent of New Zealanders say they have family or friends to rely on in times of need. "

(Could this amazing social capital be why NZ seems to be able to manage political stability and orderly transitions while we suffer through political incompetence and repeated back-stabbing?)

Meanwhile the report's authors - a UK based charity - tell Australia we are doing pretty terribly.

"Australia is the only country in the global top 20 to have seen prosperity decline over the past decade, the result of weakening economic openness and the increasing terror threat affecting the country's Safety & Security performance."

"But, wait!" I want to say. "We're heaps richer than our cuzzies!"

It's true. If you go to NZ you notice the material standard of living is slightly lower. They tend to have slightly older cars. Slightly smaller houses. Slightly older smartphones. Etc.

The report says this doesn't matter.

"Some deliver a lot of prosperity with little wealth. Others have vast wealth, but have not turned it into better lives for their citizen," it claims.

WEALTH! HUH! WHAT IS IT GOOD FOR?

Absolutely ... something.

In Central African Republic the per person income is just $320, and the life expectancy is 30 years less than Australia - people can expect to die before they hit age 51. For some people, extra wealth can be the difference between eating and not eating.

But at some level, more wealth starts to matter a bit less. Not all rich countries are at the top of the index.

For example, Qatar. They have a mind-boggling national income per capita of $85,000.

That's 85 grand for every man woman and child in the country - more than double New Zealand. But they rank 46th in the world for prosperity, because they perform poorly on education and personal freedoms.

Of course wealth matters, even once you leave abject poverty behind. The top scorers in the prosperity index are all reasonably rich countries - Norway and New Zealand are up there, not Nepal and Nigeria. And once you get down into the weeds, the report's rankings are a bit arbitrary. You could weight them a bit differently and make Australia look better than our jandal-wearing friends.

But the questions the report raises are really important. What's the point of chasing wealth and growth? Is it even worth it? Do we sometimes chase wealth that actually leaves us worse off?

These are all excellent questions to consider as we take a break over summer and enjoy a lot of things - like sunshine and time with our families - that come for free.

- Jason Murphy is an economist. He publishes the blog Thomas The Thinkengine.