"Listen to the message; don't shoot the messenger".

Never has this truism been more appropriate than in the debate around economist Shamubeel Eaqub's book, Growing Apart: Regional Prosperity in New Zealand, which has created such controversy in Wanganui and the surrounding region.

What he is portraying is what is likely to happen if major changes are not made to the New Zealand macro-economy. He is not picking on Wanganui; he is using it as an example of what has gone wrong with New Zealand's regional economies.

This is the debate that should have occurred during the election campaign but which didn't because it was hijacked by extremists.


The sadness is that for the first time in many elections there were very clear distinctions in the basic economic policies of the major parties, particularly as they would affect the regions and the export economy.

Labour accepted there is an imbalance in the economy, biased against exporting and production and jobs, and favouring consumption and speculation. It developed a very different economic policy but it failed to get this message across to the voters.

National stood on it's record of having done a good job in steering the country through the financial crisis of six years ago and said "we'll carry on with more of the same".

That same policy, with minor variations depending on the party in power, has sucked the life-blood out of rural and regional New Zealand into the major urban cities with their cost-plus economies and financial and property speculation for the past 20 to 30 years.

Major changes are necessary, but change won't be easy because it is much easier to carry on the path we are going down, and hope for the best. If we do that, we will end up where Shamubeel suggests - in Zombie Town.

So how do we climb out of the trap we have fallen into? Retired Professor Brian Gould, former vice-chancellor of Waikato University, has written an excellent book, Rescuing the NZ Economy, which traces the decline of the economy from the disastrous years of Rogernomics.

The problems have been growing for 30 years, so will not be fixed overnight. The sooner we start, the sooner we'll start the long climb back to national prosperity.

My lifetime has been spent in farming sheep, beef and cropping, so my knowledge is primarily from that industry. Others will have different facts and knowledge from their industry experiences.

The Meat and Wool Board's economic service, now known as Beef and Lamb NZ, has done valuable work monitoring levels of on-farm production, costs, prices and resultant net farm incomes.

Figures show that, for most of the period from the mid-1970s to the present - with two welcome though short-lived peaks in 2001-02 and 2011-12 - real farm profits have been below the level of the mid-70s when taking into account the depreciating effect of cumulative high rates of inflation and the excessively high exchange rate.

Among measures taken to maintain farm viability has been the reduction in farm labour, and the increasing size of farm properties. Both of these have direct results in reducing rural populations, not only in farming people themselves, but also their families who no longer shop in town, go to school or participate in community activities which are becoming more and more starved of willing volunteers.

A large amount of amount of farm profit has not been available for spending in the regional towns, where farmers conventionally go for their on-farm and personal expenditure.

A large part of that expenditure is historically local body rates - money needed to maintain and upgrade council infrastructure, which, as we all know, is under substantial pressure, and which Mr Eaqub suggests may not be able to be replaced and should be allowed to deteriorate.

Regional towns grew initially to service their surrounding productive countryside.

Over time they developed industries to add to their economies and job opportunities, many involved in the further processing of primary production, such as in Imlay, Open Country and Tasman Tanning.

But it has always been the primary, export-led industries, whether farming, fishing or forestry, which have provided their life blood. That life blood suffered a major haemorrhage in the 1980s from which it is still trying to recover.

New Zealand relies more, per head, on exporting than most other countries in the developed world. That export base is serviced, and augmented through regional towns and cities.

We all need a strong, export- led economy, whether we believe we are directly linked to it or not. If Mr Eaqub's challenge results in us all realising what we need to do to bring this about, and that we are all in it together, it may be very beneficial.

Jim Howard is a retired Kakariki farmer and former Rangitikei district councillor.

Part 2: Tomorrow Jim Howard proposes a fundamental change to boost our economy.