A New Zealand MP has said it would be a mistake for an independendent Scotland to repeat the economic mistakes of New Zealand, but said Scotland’s size would not stop its success post-independence
KIWI MP Gareth Hughes has warned Scots against following the economic path forged by New Zealand, after the SNP’s Growth Commission highlighted the countries reforms in its final report, which it claimed put its economy on a “stronger footing”.
New Zealand Green Party economic development spokesperson Gareth Hughes admitted it was flattering that the report examined his country, but said Scots should examine where the country is heading rather than where it has come from.
The SNP’s landmark Growth Commission published it’s report on the economic future of an independent Scotland on 25 May, highlighting the economic policies of other small countries – in particular Denmark, Finland and New Zealand – as comparators to the type of future Scotland could aspire to.
“New Zealand reformed its economy extensively in the 1980s and early 1990s, which placed it on a stronger footing. It has performed well over the past 20 years, including in the post- crisis period, with growth rates frequently above 3 per cent,” the report found.
Hughes, whose Green Party holds a number of ministerial posts in New Zealand, said his countries “Antipodian Thatcherism revolution” in the 1980s created one of the most unequal countries in the world, a legacy from which the country was only beginning to recover from after generations of austerity and market-driven reforms.
“It’s flattering for my country to be singled-out but my message to my long-lost Scottish relatives is: it’s not the size of the country – it’s what you do with it that matters. The
real issue isn’t the size of a country but what its policies are and the direction it’s going in,” wrote Hughes, whose Grandmother was Scottish.
“In my lifetime New Zealand went from one of the most state-involved economies to one of the most market-driven and neoliberal. We went from one of the most egalitarian
countries to one of the most unequal.
“We’ve seen a dramatic rise in homelessness, precarious working conditions and child poverty. For the last three decades New Zealand has focused on light-handed regulation, a smaller role for the state, punitive welfare reforms and employer-friendly employment law.”
Hughes advised Scots to look towards the ‘change of direction’ in New Zealand economic policy under the countries new government: “Since September 2017 with the election of a new Government we have embarked on a new direction. We’ve achieved the biggest wealth transfer in a generation. Our national Budget will no longer myopically focus on Gross Domestic Product. The country has set an ambitious zero carbon goal by 2050
“After decades of a trickle-down, austerity-ideology we’re changing direction. It’s flattering to be looked at as an exemplar by Scottish researchers but while you look at where we’ve been, please also look to where we are going,” he wrote.
Scottish Greens co-convener Patrick Harvie welcomed the intervention: “This important contribution from a New Zealand MP who is part of a progressive shift in government should serve as a warning to the SNP leadership about their faith in trickle-down economics but also as a warning to Labour that the case for a socially-just independent Scotland is very much alive. As Gareth puts it, what matters with independence is the policies you pursue.
“Greens believe in independence for Scotland precisely because it’s a way of bringing about a fairer and greener economy – better than if we leave Westminster in charge, regardless of who’s in Number Ten.
“It’s encouraging that Gareth Hughes agrees that Scotland can ‘successfully operate on the world stage’ and Scottish Greens will continue to demonstrate by our actions here and now how an independent Scotland could be even fairer. This is the kind of compelling case that will win over new supporters to independence, and it’s a far cry from a report designed to settle the nerves of centre-right commentators.”
Nicola Sturgeon took to Twitter to remind commentators that the report was a “discussion paper”, welcoming the debate it had sparked amongst both independence supporters and those who were sceptical in September 2014.
SNP MSP Kate Forbes responded to the comments: “We welcome Mr Hughes’s comments – he makes clear that the size of a nation is no impediment to success, describing claims to the contrary as a ‘red herring’.
“Scotland is a wealthy nation with abundant resources, but other nations of similar size do better with fewer resources. With independence we can, and must, bridge that gap.
“At no point does the report advocate the wholesale transplant of any one economic model in its entirety – rather we look at what other countries do better across a range of policies and initiatives. For example, if gender inequality in Scotland was reduced to the level of New Zealand, Scottish GDP could grow by £6.1 billion and the net impact on public finances could be up to £2.5 billion.”
The details of the report are expected to be debated by SNP members over the summer in a series of national meetings before Nicola Sturgeon lays out further plans on a future Scottish independence referendum.
Picture courtesy of Christoph Strässler
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*This article was updated to include a response from the SNP*