Grant Robertson: Measures of prosperity only half the story

As we head towards the Budget, the challenge for National is whether it has really heard the voice of Northlanders. Photo / Dean Purcell

For many people if there is growing prosperity it feels like it is happening to someone else, somewhere else.

In the midst of the bridges, pork barrels and other madness in the Northland byelection, an important story about the New Zealand economy was being told.

Steven Joyce and other National MPs were telling their version of the great successes they had created in the electorate, but the story simply didn't ring true with the local community. Their experience was not one of an economy on the rise, but rather of high unemployment, limited infrastructure and decreasing hope.

This is replicated all around New Zealand and around the world. As British Labour leader Ed Miliband said recently, for many people if there is growing prosperity it feels like it is happening to someone else, somewhere else.

In New Zealand, while GDP growth of 2 or 3 per cent reflects some sectors and people doing well, many people do not feel that in their daily lives. With low wages, little or no recent wage increases and spiralling housing costs they are feeling insecure, left out and neglected.

Northlanders sent their message to the Government that being the region with one of the highest levels of welfare expenditure but one of the lowest levels of capital investment was not a sign of success.

Be it for regions, small businesses, wage and salary earners or families struggling to make ends meet, there is a desperate need to rethink our approach to the economy to move beyond the statistics and market ebbs and flows and be focused on a human purpose; to give everyone a chance to play their part and succeed.

These questions are currently the focus of progressive political parties around the world. At the meeting of global social democratic parties, the Progressive Alliance, that I attended in Mexico, and at my visit to the Centre for American Progress in Washington DC, the main topic was how do we move beyond growth for growth's sake to an inclusive future?

The Centre for American Progress, a Democratic Party-aligned think tank, recently released its Inclusive Prosperity Commission (IPC). Its starting point is an increasingly well-understood position, most clearly articulated by French economist Thomas Piketty, that much of the economic growth of recent decades has been captured by a small group of capital owners at the expense of the vast bulk of working people. As pointed out by the OECD last year, not only is this true, the inequalities it creates are hurting economic growth. The IPC has made a series of recommendations to create an economy where everyone has the chance to contribute and benefit.

Speaking to the researchers behind the report it is clear that their motivation is the same as Labour's approach to the economy. Wealth must be generated first before it can be redistributed, but the chance to generate that wealth needs to be available to all. To do this the IPC is promoting an increased focus on supporting small businesses, regional development, boosting home ownership, investment in education and training and sustained increases in wages, particularly the minimum wage. These are the areas they believe are core to the inclusive, people-centred economy that will provide prosperity for a wide range of people. As the report says, "For democracies to thrive rising prosperity must be within the reach of all citizens."

As we head towards the Budget, this is the challenge for National: whether it has really heard the voice of Northlanders. Will the Government make the changes needed to give everyone in New Zealand an opportunity for success or will it be a continuation of policies that see wealth and prosperity in the hands of the few?

Grant Robertson is the Labour Party finance spokesman.