Out of the comfort zone, please

New Zealanders need to learn a bit of discontent, writes SCOTT PERKINS*.

So, are we in a comfort zone or a danger zone? One measure wraps it all up. Living standards.

On average what wealth do we share between us? I am sure polling would suggest we think we are in line with our 'traditional peer' countries such as Australia, Singapore, UK, and Scandinavia.

We are not. In fact, we are far from it. Australians are 59 per cent more wealthy than us and the peer group above 60 per cent.

So, is the glass half full or half empty?

If we consider the impediments that our traditional peer countries have faced over the past decade as they have improved living standards - New Zealand looks easy. No wars, virtually no corruption, streamlined regulatory regimes, broadly competitive (but not compelling) tax regime, reasonable (but falling) education and skill standards and a can do attitude that consistently impresses those who come here to work or live. So, what do we need to do about this contentment? Here are six ideas.

* Think bigger. It is all about aspiration. If our world is bounded by the shores of New Zealand, we will fail to generate the jobs, living standards and sense of global relevance and pride that defines success. Think about New Zealand's icons, they are all world-beaters. They are people, companies and teams that have made it on the world stage - not just in our back yard. How relevant would Team New Zealand, the All Blacks, Sir Edmund Hillary, Fonterra, Carter Holt Harvey and Lord of The Rings be if their competitors, challenges and audiences were limited to New Zealand.

* Get help. We need some shortcuts to developing new areas of the economy and providing capital, expertise and contacts. One of the quickest ways to secure these is through attracting foreign investment. New Zealand has way under-achieved in this area. Foreign companies have fuelled the performance of our traditional peer countries - but they have been aggressive in seeking them out. We need a pro-active, focused, resourced, skilled and agile investment promotion agency to shout New Zealand's business attributes from the global hills. The recent BCG report has the detailed roadmap there - ready to go.

* Free trade agreements. These have the potential to be the "transformational step." A free trade agreement with the USA and enhanced trading relationships with Asia would propel our living standards forward dramatically. It might even be time to reconsider our defence policy with the US to see whether there are ways of removing this impediment within the constraints of the anti-nuclear stance. Politicians are unlikely to lead a balanced rational discussion on the anti-nuclear issue. We all should.

* Treasure education. So many discussions loop back to education. Crime, family violence, industry productivity, innovation and research and development, and feasible businesses for venture capital. Raising our expectations in terms of the adequacy of our own training and the performance of schools and tertiary providers will drive better outcomes.

* Improve Government productivity. Every corner of the global economy is subject to productivity pressures. We are all trying to get better value from limited resources. We all face competition. How is the Government going? It is pretty hard to tell. Maybe it should set productivity improvement targets and be transparent about the processes that identify the least efficient spending and measure action. For example - why shouldn't the least effective 10 per cent of social welfare spending be identified and tested to see whether New Zealanders would be better off by allocating those resources to, say, education.

* Get discontented. We need to give honest and clear signals to our politicians and fellow New Zealanders that our living standards need to improve. As importantly, they need to improve dramatically and quickly. A sense of urgency and "make it happen" is needed. Every day the gap is widening and politicians naturally prefer incrementalism - which will not get us there. The present path takes us out of the developed nations in a dangerously short period.

Contentment is a comfortable feeling, but a dangerous one if we want this to be a country for future generations. There is plenty of evidence that our comfort zone will not last forever.

The messages we should be sending our families, employees, employers and policy makers are ones directed at being part of a competitive, successful, winning New Zealand - one that is well out of its comfort zone.

* Scott Perkins is managing director of Deutsche Bank and a trustee of the Knowledge Wave Trust.

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