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Wednesday, May 31, 2006

Why Australia is richer than New Zealand

A lot of discussion has been generated in the blogosphere (and in real life) regarding the National Party's recent bout of snivelling about how NZ isn't doing as well as Australia economically. If Don Brash is fixated on staring at the other guy's dick and wondering why he's falling short he should keep it to himself. I'm sick of it.

You want to know why Australia has the miraculous ability to have a higher GDP per head than us? You want to know why they have more money than us? You want to know why - despite the unions, the higher taxes, the regulatory red tape, the layers of bureauracy, the routine early retirement - why Australia is wealthier than us? - It's pretty basic: they dig shit out of the ground that they forcibly expelled the native population (which dies on average 20 years before the colonists) from and sell it to other countries. Understand now? Or do I have to drag out the facts? This is from the horses mouth:



The value of the minerals industry is etched in Australian history and identity, and has helped Australia achieve its position as the sixth wealthiest nation, per capita. The benefits of the minerals industry to the Australian community extend far beyond export profits. [...]

Australia’s largest export earner is the minerals industry. It -
• contributed $43.8 billion in mineral and energy exports to Australia’s economy in 1999–2000, accounting for 44.9% of Australia’s total merchandise exports or 34.8% of total goods and services,
• contributed $1.9 billion (as a conservative estimate) in high-technology exports in mining services in 1999–2000, which is more than Australia’s current wine industry exports,
• was among the top three producers of ten of the world’s most valued minerals in 1999
• dwarfed all other sectors in terms of value added per worker-for example, it was more than four times the national average to national income or gross product in 1995–964, and
• accounted for 19% of the value of Australia’s fixed assets and natural capital in 1998.
Over the past 20 years the resource sector has contributed around $500 billion to Australia’s wealth⎯almost 1.5 times the earnings of the agricultural sector over the same period.
In 1999-2000, total payments to government from mining were $4.75 billion, consisting of $3.52 billion in taxes and royalties and $1.23 billion in transport levies.
#1 Producer/#2 Producer/#3 Producer
Bauxite: AUSTRALIA/Guinea/Brazil
Diamond: AUSTRALIA/Russia/Botswana
Gold: South Africa/USA/AUSTRALIA
Iron Ore: China/Brazil/AUSTRALIA
Lithium: Chile/China/AUSTRALIA
Mineral Sands: AUSTRALIA/South Africa/Canada
Nickel: Russia/Canada/AUSTRALIA
Tantalum: AUSTRALIA/Brazil/Canada
Zinc: China/AUSTRALIA/Canada

They don't call it "the lucky country" for nothing. The line in their anthem about "wealth for toil" is relative - there certainly isn't anything in there about having to have a knowledge economy to succeed in the world - just grab your shovel, cobber! A graph in the link shows in 1980 the export value of minerals and agriculture were equal. In 2000 minerals are almost twice that of agriculture. Does this help to explain why they have done supposedly so well compared with us over the last 25 years?

The real question - given their demonstrably and proportionately vast mineral wealth - should be why are they still after a hundred years of massive extractive industrial growth only slightly ahead of us economically? The only really shrewd thing that I can see they have bought with all that wealth - is us!


At 31/5/06 3:10 pm, Anonymous Anonymous said...

thank you for bringing a little clarity to the shrillness of the debate. I am sick of all the whinging from both sides. I wish we would stop comparing ourselves to aussie and get on with the job of making NZ a desirable place for us to live in. Aussie can have there cronulla race riots and fucked attitude towards its indigenous peoples.

At 1/6/06 11:31 am, Anonymous Anonymous said...

In fiscal/economic terms, oughtn't comparisons be with similar ag-based, 4Mish population type countries? Ireland perhaps? Certain Sth American countries? I'm always amused at the snide implications attached to MSM phrases like. "...which places NZ ahead of only Chile and Estonia, in the OECD" Like, they're supposed to suck?

At 1/6/06 12:53 pm, Anonymous Anonymous said...

Well spoken Mr S - I have never understood why the Nats keep looking up to a deeply racist country who only last year had race riots with whites bashing the shit out of any one not white and of course last months report that due to a complete lack of development funding, rural Aboriginal communities have degenerated into sexual abuse clusters. You want to live in a racist country like that - fuck off now.

At 1/6/06 9:05 pm, Anonymous Anonymous said...

Lack of development funding encourages sick fucks to rape 7 month old babies? That's weak Bomber, even for you.

At 2/6/06 12:46 pm, Blogger rob said...

"...never understood why the nats look up to a ..." country that follows the US to war and embraces the bomb, ignores its indigenous population, and re-elects a govt as intellectually and morally bankrupt as the Howard bunch? Sorry, but isn't it pretty obvious that the Nats really really really want to do all those things here?

At 4/6/06 8:46 pm, Blogger andrew said...

"In fiscal/economic terms, oughtn't comparisons be with similar ag-based, 4Mish population type countries? Ireland perhaps? Certain Sth American countries?"zvm

One word: Finland. Actually, two words... Finland, Nokia.

At 6/6/06 8:52 am, Blogger Michael said...

Who are the richest countries in the World? USA, Leichenstein, Canada, Japan, Britain, Germany, Italy, France.

Where do these countries rank in terms of natural resources? Low.

Wealth is not owning or selling resources - wealth is applying technology to resources.


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