Ideas@TheCentre
Upsetting greenies is fine, but you can’t dig up living standards
How many governments around the western world are suggesting turning national parks into mines? New Zealand’s Minister of Energy Gerry Brownlee has done just that, announcing that the government will be exploring whether parts of the national conservation estate can unlock mineral resource potential.
On the one hand this is an excellent move. Most our conservation estate can already legally be mined, and if valuable minerals can be extracted profitably and for little damage and fuss, then why not? The government is also to be applauded for challenging New Zealand’s abundance of fuzzy, simplistic ‘green’ thinking.
On the other hand, this move is worrisome as it reflects the continued thinking in New Zealand that a country’s economic prospects are largely determined by what mineral resources it has to exploit. This is widely believed to have been the key to Australia’s prosperity.
This ‘resources narrative’ was largely created and prodded along by former Deputy Prime Minister Dr Michael Cullen, whose favourite repartee to gripes about Australia’s higher wages and growth was that Aussies ‘dig up what’s under their country.’
It is disappointing that Mr Brownlee has bought into this narrative. As Dr Don Brash recently pointed out, there is a good case for arguing that New Zealand is ‘resource richer’ than Australia per head of population, yet has inferior economic performance.
A quick glance at resource rich countries such as China and South Africa, and resource poor countries such as Singapore and Hong Kong, shows that it’s not minerals that matter.
In the long run, all economists argue that productivity raises living standards, not an abundance of minerals.
So it seems New Zealand’s productivity malaise must be addressed. In any case, opening some of the national estate to mining is essentially picking at ‘low hanging fruit.’ It is easy to do, and doesn’t require any of the politically tough decisions New Zealand will need to improve its growth performance.
Mining certain parts of the national estate might be a good idea. On principle, it is not particularly objectionable, and challenging ‘green’ anti-progress attitudes is worthwhile. However, it will do little to raise the living standards of New Zealanders.
Luke Malpass is a Policy Analyst with the New Zealand Policy Unit at The Centre for Independent Studies.
