In a recent front-page feature on child poverty (NZ Herald, August 12), Otago University's Professor Louise Signal stated it was shameful we have child poverty in New Zealand when we have such a "good economy".
But what is a "good economy"? New Zealanders were told several years ago by a leading economist that we had a "rock star economy". The National Opposition believes in what it calls a "strong economy".
But these are all meaningless terms.
Although there are slight technical differences, the terms "economy", Gross Domestic Product and national income are interchangeable. Basically, they mean the same thing.
Hence the confusion. Claims about a "rock star economy" make excellent political copy but are anything but descriptive. For example, what exactly would be meant by a "strong Gross Domestic Product" or a "rock star national income"?
Confusion abounds. Does the term "good economy" equate with superior economic performance? Emphatically no. Our economic performance set against our economic potential remains abysmal.
The public (the 99 per cent) is continuously fed assurances by our political masters, economists, and the commentariat that we have a "sound economy", a "good economy", we are in "good shape", our "economic fundamentals are very sound" and so on. Yet, we have child poverty, homelessness, housing unaffordability, low wages, working poor, widening inequality, and a large Kiwi diaspora.
Clearly, there is a massive disconnect between what we are asked to believe and the grim reality of life in New Zealand.
As a democracy, we can rule out all prospects of economic and social progress unless we have an informed public. Economists generally do not help the situation by persisting with obsolete metrics, notably the Gross Domestic Product (GDP). The GDP was invented back in the 1930s by the American economist Simon Kuznets who famously cautioned that the well-being of a nation can scarcely be inferred from a measurement of its national income. That caveat is largely ignored.
New Zealand is a middle-income agricultural export nation with a $250 billion economy, or national income, very unevenly distributed across its five million population. Flaunted wealth at one end, destitution at the other. Hence the inevitability of child poverty.
Accordingly, if our goal is New Zealand's transformation into a highly egalitarian, high-income nation or an economy that benefits everyone, we need an entirely new, readily accessible set of economic and social metrics to indicate how we are tracking toward that goal.
An "Economic Performance Act" would gather all relevant economic data and, like dials on a dashboard, highlight the four critical indicators of national economic performance. These metrics include real per capita income growth, the median wage, household disposable income, and inequality. This initiative would give the public a deadly accurate fix on our economic performance and, at a glance, confirm our progress towards a vastly better country.
The reaction to this proposed initiative so far has been dismissive. As one young observer declared "with just five million people we don't do too badly". Another recently assured me that "we're doing all right". And on it goes.
Such talk might be music to the ears of our political masters but, if it represents the majority opinion, we have a huge problem.
Economic development only succeeds when the achievement of high living standards is an uncontested, overriding national priority rather than a preference.
Many New Zealanders appear content with the status quo and - providing of course we excel at sport - want it kept that way.
As long as that outlook prevails, all prospects of New Zealand's transformation into one of the cleanest, safest, and richest nations on the planet can be ruled out entirely, regardless of whichever government is in power. Period.
• John Gascoigne is a Cambridge-based economic commentator.