Frequently Asked Questions
[ Last Updated 15 August 2008 ]
1. Why is the government giving such high priority to sustainable development?
The working definition of sustainable development is "meeting the needs of the present generation without compromising the ability of future generations to meet their own needs".
Sustainable development has three core elements:
- integration across the dimensions of well-being – economic, social, cultural and environmental
- consideration of the long-term implications of decisions
- inclusivity – the importance of citizen participation and intersectoral partnerships.
The government considers taking a sustainable development approach consistent with securing long-term sustainable economic development. Implicitly it is about the quality of economic growth, not growth for growth’s sake.
2. Why is the focus on income (GDP per capita)?
The government agrees that well-being is more than just incomes. Our sustainable development indicators are more broadly based to capture environmental, social and cultural aspects of well-being—the "quality of life".
There is no measure of overall well-being. However, GDP per head is generally accepted as an indicator of material living standards that can be compared among different countries, and a reasonable proxy for well-being.
3. Why is our growth rate such a big deal?
If our income declines relative to those of other countries, people will leave New Zealand to seek better returns and opportunities elsewhere. Capital and labour are highly mobile. If New Zealand does not improve its world ranking, both will increasingly concentrate elsewhere. Higher sustainable growth will provide more high-quality jobs and increase the standard of living of all New Zealanders. It will also enable the government to improve its ability to meet the expectations of New Zealanders for the provision of public services, such as health, education and infrastructure.
4. Why do we compare ourselves to the OECD?
Comparing New Zealand internationally is not limited to OECD countries—we also use United Nations data. However, the OECD has a well-developed statistical database using the same sort of measures we use. Also, OECD countries are addressing similar economic development issues to New Zealand.
5. What is the government doing to achieve its goal of returning New Zealand to the top half of the OECD?
A lot of work is being done on putting together the partnerships that will make GIF policies work. The focus within the public sector is on ensuring better co-ordination and alignment of policy development and implementation.
6. What does GIF mean for businesses?
The only way to get higher sustainable growth is for New Zealand businesses to prosper. While continuing to strengthen the foundations of the economy, the government is also focusing on helping businesses grow and reducing the burden of compliance costs.
7. What does GIF mean for the regions and other groups within the community?
This government's priority is to foster sustainable economic development, increasing the well-being of all New Zealanders. For example, regional development is a key part of economic development efforts. The Regional Partnership Programme [link to Regional Partnership Programme website] and the joint Ministry of Economic Development/Ministry of Education programme, Project PROBE [link to Ministry of Education website], already benefit the regions. Councils are now charged with developing long-term council community plans to reflect the aspirations of local communities. Achieving sustainable cities is one of the four priority areas in the government's Sustainable Development Programme of Action.
8. What about the environment? Surely higher growth has a negative impact on the environment?
A key principle of sustainable development is that economic growth should not lead to wasteful use of resources. A focus on sustainability requires the sort of innovative thinking that will ensure growth yields positive social, cultural and environmental outcomes. Social and environmental policy will continue to be given high priority in their own right. In addition, the choice of economic policy instruments will be influenced by their interaction with social and environmental concerns. Sustainability will be paramount.
9. When will we see the benefits of GIF and how will we know we have succeeded?
This is a medium- to long-term objective. We cannot expect to recover our position in the per capita income rankings overnight. We won't see the impact of our efforts for a few years, but changes are starting to happen. We will know we are succeeding when we start to see many more New Zealand firms growing and competing internationally in high value-added markets. This applies equally to businesses in the more traditional sectors of the economy and those considered to be horizontal enabling sectors – for example, ICT, which has the effect of enabling growth across all sectors. Another indication of success will be having more international businesses based in New Zealand being supplied by domestic firms.
10. How can we tell we're getting value for money from this growth and innovation activity?
Evaluation of government initiatives is critical to ensuring we are on the right track. In recent years, the government has made significant progress with the evaluation of the efficiency and effectiveness of public investment. However, establishing the precise contribution of individual programmes and initiatives to the government's overarching economic development objectives is difficult. The Ministry of Economic Development is adopting a three-pronged approach to evaluation, using:
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