By 2040 New Zealand was widely regarded as the Switzerland of the Pacific. It had evolved over the previous two decades with a mix of market dynamism and very astute government policy in key areas.
By 2040 it was a world leader in value-added, high-quality manufactured foods. It was the delicatessen of the world. Its cheeses, ice creams, yoghurts and chocolates were the premier brands. NZ was a world leader in synthetic protein rich foods. Kiwi baby formula was every mother's first choice worldwide. High value-added industries gave thousands of high paying jobs. The emphasis was on prosperity and inclusion. It was too small a nation to carry a large underclass.
These high-value industries had been developed through an emphasis on developing local talent and attracting high-skill migrants in key targeted sectors. It was also the result of creating an investment culture that funded new ventures, mainly high value-added exports. New Zealand's tax system strongly supported productive investments in new businesses, research and development and skills training.
NZ had also developed a significant technology sector partly thanks to home-grown talent and an influx of targeted, highly skilled tech entrepreneurs eagerly seeking its wonderful lifestyle. NZ had a very astute targeted migration policy.
By 2040 NZ was in a rare position for a developed nation. It's isolation worked in its favour. It could cherry-pick the world's most skilled migrants and entrepreneurs, who queued to enter this dynamic, inclusive little country.
By 2040 NZ had the developed world's most affordable housing after the 2020s' well-managed public-private building programme. The tax system strongly discouraged housing speculation. Houses were for people to live in. Many recalled the crazy years when houses were treated as speculative assets. There was no desire to return to those foolish days.
Auckland was seen as the most liveable big city in the world. Its central suburbs were studded with low-rise, attractive apartments on tree-lined avenues. Its public transport system was superb. Few drove in the metropolitan area. Over the past 30 years smart public policy in tandem with private enterprise had transformed the city into an affordable, easy-living modern metropolis. Road-user taxes discouraged central-city car use.
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The education system had been revitalised to meet the needs of a dynamic job market. A dual schooling pathway ensured a more vocational and flexible approach to teaching and learning. There was less emphasis on endless assessment and more on relevance and life-long learning. Teachers were well paid and respected with a high level of autonomy and accountability. Teaching positions were highly sought after, ensuring a high-calibre education system. The Kiwi schooling system was regarded as the most dynamic and relevant in the world in meeting the needs of its students. This was a major attraction for skilled migrants. New Zealand also had one of the best and accessible adult retraining schemes.
NZ had developed one of the most effective and efficient public sectors in the world. Some of the brightest and most talented graduates sought a public-service career. They were aware how rewarding it could be to develop and implement cutting-edge policy that would set the boarder parameters for NZ Inc to thrive.
The tax revenue generated by the dynamic economy gave NZ a universal healthcare sector that was the envy of other countries. Top graduates from around the world eagerly sought positions in the well-funded health system.
Older Kiwis were bemused by the changes over recent decades. They remembered housing crises, financial meltdowns, traffic jams and widespread homelessness. They remembered ugly resentment about migration levels. Some recalled the lack of political leadership that had contributed to NZ's relative decline in the decades preceding 2020.
They now felt pride in the success of their country. They felt they were being well led rather than managed. A variety of smart, well-implemented public policies and home-grown and imported entrepreneurial talent had ensured New Zealand was in a very sweet spot by 2040.
• Peter Lyons teaches at St Peter's College in Epsom and has written several economics texts.