Freedom index puts NZ 3rd equal

By PAULA OLIVER

New Zealand has moved up to third place in a world economic freedom report co-published by the Business Roundtable.

Despite the high ranking, the Roundtable is adamant that the report demonstrates New Zealand is sliding in the wrong direction.

The annual Economic Freedom of the World report, released today, ranks economies on 38 different factors - including regulatory regimes, legal and banking systems, size of Government, inflation variability and taxes.

Each of the 123 countries is given an index rating out of 10.

The report is the eighth in a series put out by the Economic Freedom Network, a global organisation of which the Roundtable is amember.

Countries with low numbers of state-owned enterprises, independent courts and free labour markets, for example, are awarded good scores.

New Zealand ranked in the top five for its business regulations and credit market regulations.

It fared worse for labour market regulation, with a a ranking of 33rd, and was 39th for the size of its Government.

Overall, New Zealand ranks in equal third place for economic freedom, an improvement on last year's fourth place and fifth before that.

The latest report is based on 2002 data, the freshest the research team could get.

Its analysis demonstrates a strong link between economic freedom and per capita income, life expectancy, economic growth and the attraction of investment.

While the report appears to endorse New Zealand's current economic situation, Business Roundtable executive director Roger Kerr argued yesterday that the real story had to be found in the country's score, not its ranking.

This year New Zealand scored 8.2 out of 10 for the third year in a row. On 1995 data New Zealand scored a higher 8.6.

"By 1995 we were at the highest point we had reached during the survey," Kerr said.

"From that point on New Zealand has moved slightly backwards."

Ranks

* Top five:

Hong Kong, Singapore, 3rd equal - New Zealand, Switzerland, United Kingdom, United States.

* Bottom five:

Venezuela, Central African Republic, Democratic Republic of Congo, Zimbabwe, Myanmar.