John Roughan: New Zealand - a place worth returning to

We find ourselves with an economy more buoyant than most, attracting many more people with their energy, capital and flair to this lovely underpopulated place. Photo / Ross Setford

All too soon, the grandchildren are going home tomorrow, to Singapore, where their parents will be quickly back into the big currents of the world. One or the other seems to be always going to a conference in London, Beijing, Vancouver or somewhere I've never been, yet they relish their time here.

They bring the kids back twice a year, once in winter for relief from tropical heat and again at Christmas for family gatherings, but not only for those. They love the deep blue sky, the temperate warmth of our summer, the beaches and bays of Auckland where they have bought a house. New Zealand must seem very small to them after living nearly 10 years overseas - New York and Brussels previously - but they never say that.

They make it evident this is still their real home. They retain the friends they made growing up here, some of them also now in other parts of the world. They all keep in touch with the country and with each other by internet and when they return they pick up the conversation as though they had never left. They take the kind of interest in local schools and services that reassures me they will come home for good in time for their children to grow up here and know they are New Zealanders.

My generation can be quietly proud, I think, that New Zealand is now a place that can hold its own in the world. For the past few years more people have entered the country than have left it. Many of them are New Zealanders coming home or staying home. Immigration is setting records, the population is growing at a faster rate than we have seen since 1974.

I remember 1974. I had just started work in Auckland and sometimes covered meetings of the town planning committee of the regional authority, as it was. The planners expected Auckland to reach Hamilton. Seriously. They were working on a population growth projection from the 1960s which continued until 1974, then it stopped.

Everybody blamed the oil shock. Inflation had resulted, unemployment had set in, governments put up the shutters to immigration and started hunting down "overstayers". New Zealanders began to emigrate in large numbers, mainly to Australia. Robert Muldoon said they were raising the average IQ of both countries. You had to laugh.

But our problems went much deeper than the price of oil. I finished school at the end of the 1960s seriously doubting New Zealand had a viable economic future. We'd learned concepts such as the terms of trade and knew our exports of primary products were not earning enough to pay for the consumer goods we enjoyed, even with imports restricted so that a limited range of the same goods could be manufactured or assembled here.

It was hard to see much else we could export and once Britain made the decision to join the European market, we stood to lose our only reliable customer. Then came the oil shock, inflation, unemployment. We were living on borrowed money, borrowed time, waiting for the creditors to call.

Fortunately for us, countries with deeper industrial economies were suffering inflation and stagnation too, and they discovered the cure. I was in Britain in 1979 when Margaret Thatcher brought the medicine. I was back here by the time Australia took the cure from a new young Treasurer, Paul Keating. But even then, we hesitated. Floating exchange rates, free trade, industries exposed to cheaper imports ... It all seemed to be too risky.

When I see the New Zealand my grandchildren will inherit today, I am eternally grateful to the government we elected in 1984. It was younger than any we had elected before, more rash. Looking back now it is easy to say, as John Key does, that the changes they made could have been done more slowly and gently. I doubt it. Gradualism would not have given us the economy we enjoy today. We would have lost our way.

It had taken us 10 years from 1974 to take the plunge and it took another 10 years to get the new economy properly under way. By 1994 inflation was down and the Budget produced its first surplus that year. It took another 10 years for us to believe it could last. By 2004 we had a Labour Government averse to further reform but leaving the changes intact and reaping big surpluses.

We were booming. The only remaining worry National could raise was the continuing exodus of our educated young people seeking opportunities and higher salaries overseas. Ten years later, thanks to the global financial crisis, net migration reversed. We find ourselves with an economy more buoyant than most, attracting many more people with their energy, capital and flair to this lovely underpopulated place.