The Economic Death Knell or the Catalyst for a Resurgent New Zealand?

Now that the dust is settling in Christchurch and the sad commemorations for those who died in it are being held, thoughts are turning to how to rebuild the city.

The debate has already divided into predictable political lines with the left and even some of those previously associated with the right advocating more centralised planning, Government intervention, and higher taxes and levies. A few lone voices are advocating letting Christchurch businesses and residents determine their own future in a more grassroots, privately led recovery.

This earthquake is probably the greatest economic calamity to befell New Zealand since World War 2. The timing could not be worse - we are at the bottom of a long downwards spiral in economic performance that has seen us drop from number 3 or 4 on the OECD table of GDP per capita in the 1950s to number 23 today. Our response to the earthquake will determine, as much as anything else, whether we climb back up the ladder or slip further down - being passed on the way by many third world nations on the ascendancy.

The last thing this country needs is more government intervention, more regulation, and more taxes and government charges. Such policies will spell the death knell of NZ's already strained economy. We need greater economic freedom and lower costs to enable our businesses and investors to build the recovery both in Christchurch and throughout the country. Any other approach will stymie the recovery in Christchurch and drag New Zealand further down to third world status.

I'm not saying there is no role for Government in the reconstruction - of course there is. But the best thing the Government can do is get out of the way and remove all impediments to investment in the new Christchurch. It should be cheerleading the recovery, not trying to control every aspect of it.