Understanding of this fact seems to be missing in the cries of “help” from various groups in society.
Media coverage omits asking or answering the question of where funding should be cut in order to increase funding to the requested “help”.
That is what a zero-sum game means.
More funding to fire trucks or Pharmac?
Science or school lunches?
Hospitals or housing?
These difficult questions explain the focus within the Government on reducing expenditure on areas not seen as critical, or seen as inefficient.
It also explains the desire to double the value of the export economy.
The alternative is borrowing more, for which somebody, possibly future generations, will have to pay.
But procrastination also has implications for future generations.
This has been shown by the debate around rates increases and water management.
Paying now without borrowing means that the value of exports must be increased.
This will require considerable effort from the primary sector and science — the research that shows how to do even better with land management and the desirability of food and fibre products.
The question then would be what to do with the extra income coming from overseas, rather than which New Zealand portfolio budget should be reduced.
There will undoubtedly still be tussles, but the supplement to one portfolio will not have come from a withdrawal from another.
To achieve the extra export value, we need ongoing productivity gains (per hour, per investment in infrastructure and land) as well as refinement in products to meet market opportunities.
Research
From the laboratory out to the field and back again, scientific and marketing research will assist with identifying choices and potential unintended consequences for land managers, processors and marketers.
The New Zealand science funding story has, however, been dismal.
The budget and ongoing staff cuts of last year are not yet over, and the science system and university research reviews might not have anything left to rearrange.
Critical mass — numbers of people focused on solving the same problem with an exchange of ideas — is important.
Professor Sir Paul Callaghan (RIP) made this point repeatedly.
Underfunding, and the disconnect between the agencies of government that deal with education and the agencies that deal with research, science and technology were a bugbear.
“Whatever the goals of our nation’s RS&T strategy, they will fail if they are not comprehended and incorporated by those who frame policies for tertiary and secondary education,” he said.
“We are all in a race against time, a race that can only be won through partnership and understanding.”
Dr Garth Carnaby, then president of the Royal Society of New Zealand, echoed Sir Paul’s words with his statement about clusters and the ability of New Zealand to “achieve world-leading technology positions in the knowhow associated with our farm commodities”.
Listen to Jamie Mackay interview Dr Jacqueline Rowarth on The Country below:
The Commerce Commission has suggested similarly that the Government should focus on areas of the economy with rich potential for innovation.
“New Zealand’s small economy has only a limited number of areas that can get to critical mass and support sustained world-class competitive performance.”
The Productivity Commission report put forward the idea that “as a complement to broad-based innovation policies (which benefit all firms), finite government resources also need to be deliberately focused on a small number of high-potential areas rather than being thinly spread”.
David Skilling, Landfall Strategy Group, has termed these “sub-therapeutic doses”.
Borrowing to fund sub-therapeutic doses would be possible and would, at least in theory, stimulate income.
New Zealand’s debt to GDP has been estimated at 45.9% for 2024 by the Hinrich Foundation.
We are 11th in the world, with Australia 12th (49.4%), the UK 24th (101.1%) and the US 27th (122.2%).
Other countries having more debt doesn’t necessarily mean that we should take on more, but if there is a plan to invest for income generation, increased borrowings should be considered.
The alternative, involving more budget cuts, is more outcry from society about their needs, and politicians struggling to make sense of the country’s needs for the future.
Contrary to various statements from various members of opposition, New Zealand’s economy needs to be managed with the logic of managing a company.
“Investment drives profit and profit drives investment.”
This relationship is central to capitalist models — but also to NGOs where the investment is in public good … as long as the ability of the parent company to function continues.
Science needs investment with broad-based innovation policies as well as sub-therapeutic doses — and the primary sector is poised to work alongside the scientists to do what is needed.
The track record of farmers in the adoption of practicable advances is second to none.
That is why at least some of the politicians are fighting to allow them to do what they can for the economy and every New Zealander.
