New Zealand at 1993-1994

These are my observations about where New Zealand stands today, how it arrived there and where it is going. They are based on my visit for the 1993 election campaign and a couple of months after it. I spent the majority of my stay in Dunedin and when travelling I stayed at hostels and backpackers' accomodations. Backpackers' can be found all over -- in cities and towns, on farms and in the wilderness. Prices range from $9.90 to $20.00 per night. [Note: all figures in this letter are in NZ$; NZ$1 = US$.5570].

Treaty of Waitangi
It is a bit surprising to realise that NZ is a young country by European standards. Settlement of Otago began in the 1840s, and the first ships for the Canterbury Settlement arrived at Lyttelton in 1850.
In 1840, representatives of the Crown and several hundred Maori chiefs signed the Treaty of Waitangi, a document that set out a partnership between Maori and Pakeha (white people) and continues to be fundamentally important today. However, the Maori and English versions of the Treaty have somewhat different language. In particular they differ over what is meant by sovereignty which is at the core of the Treaty.

Current statistics on Maori unemployment, life expectancy, health, single parent families...show that the partnership was rather one-sided. Governments have adopted various approaches to the Maori population. For a long while there was a Department of Maori Affairs. More recently the government sought to direct resources to individual iwi (tribes). The current approach is to require that each department ensure that its programs achieve equal outcomes for Maori and Pakeha alike; there is also a department of Maori Development.

If the Crown failed to uphold the Treaty for much of NZ's history, things began to change with the establishment of the Waitangi Tribunal in 1975 and even more with the Tribunal's reconstitution in 1985. The Tribunal now has about 400 claims before it, but relatively few have been settled. One of the more significant settlements, the 1992 Sealord settlement, gave the Maori a half-interest in the commercial sea-fishing company Sealord worth $150m. Resolving claims to everyone's satisfaction will be difficult because Crown land has often passed into private hands and because it is sometimes difficult to determine who are proper claimants. In any event, a few articles about land claims typically appear in the newspaper each week. For example, a front-page article in the Press (Chch, 13 January) says that the government intends to establish a "fiscal envelope" or overall limit to compensation for Maori claims.

Restructuring
From the 1980s onward, NZ has undergone a restructuring comparable to what happened in Britain under Thatcher. Rationalization, privatization and deregulation have been the bywords of successive Labour and National governments as they sought to achieve a leaner and more flexible economy.

Examples abound. Telecom is now a private company and is facing competition. In July, the government sold New Zealand Rail for $328m. The government wants to sell the power transmission company, but it denies plans to sell the electricity wholesaler ECNZ (also known as Electricorp). Local electricity retailers are undergoing all sorts of combinations and consolidations in the wake of deregulation. The retail milk price was deregulated effective April 1. A proposal to open coastal shipping to foreign vessels was put forth by the previous government but now is on hold.

Of course many state-owned enterprises (SOEs) still exist. In addition to ECNZ, NZ Post, TVNZ (including Television One and Channel 2) and Landcorp, a property and farming entity, come to mind.
Another significant change was the introduction of a goods and services tax (GST) in 1986. It now stands at 12.5%.

1993 Election: Hold on!
The 1993 election produced a minor check to the drive to rationalize. The National (conservative) government went into the election with a huge majority and emerged with a thin margin. Indeed for ten days, until the counting of special votes, it looked as if there would be a hung Parliament.

The message of this election was that the "decent society" should not be entirely abandoned. People felt that the National government should not be allowed to have free rein in Parliament and that there was a need for more consensus. However the opposition Labour party did not gain as a result. Instead two new parties, the Alliance and New Zealand First obtained 20% of the vote and four seats in the 99-seat Parliament; National has 50 seats and Labour 45.

In a more significant show of dissatisfaction, NZers voted to change their electoral system from first-past-the-post (FPP) to mixed member-proportional (MMP). In addition, the size of Parliament will increase to 120 members. It is interesting to note that the majority on the South Island voted against MMP because it will reduce the South Island's relative strength in Parliament.

Despite the dissatisfaction indicated by the election results, a recent Gallup poll conducted in about 50 countries found NZers expressing more optimism about the future than people in most of the countries surveyed.

Local Government
Local government was reorganized in 1989. Twelve regional councils and four unitary authorities exercise resource management functions similar to counties in the U.S., focusing on such areas as transportation, water, pest management and flood control. At present the regional councils are all working on policy statements -- large documents which outline their plans for the next ten years and make interesting reading, at least in parts. The policy statements I have seen include significant sections on the Maori perspective. Territorial authorities form the second level of local government. There are somewhere under a hundred city and district councils.

The Economy
In 1993, NZ's economy grew at a rate exceeding all OECD countries except Turkey which uses a different method for calculating growth. Inflation is low, and the NZ dollar is strong. However unemployment, at 9.1% , remains a sticky issue.

As in America, small- and medium-sized businesses are what makes NZ run. These range from the comer dairy, which, although in decline, is still quite evident, to the jersey factory with 150 workers which supplies outlets around NZ and in Australia.

NZ is a trading nation, and about 40% of its exports of its are "agriculture and horticulture-based." The leading exports are meat, dairy, wood and pulp, vegetables and fruit, wool and fish and other sea critters. One need not look far to find export-related activity whether it be sheep in the field, bales of wool passing by on a truck, a pine plantation or logs piled up at a port.

For many commodities, marketing boards promote exports. Some of these boards exercise a monopoly and all exports must pass through them (the single-desk system). Such is the case with the NZ Apple & Pear Marketing Board (ENZA) whose logo is probably familiar to you from apple boxes. ENZA recently stifled an effort by the Apple Fields company to export apples, but this seems unlikely to stand for many more years. The Kiwifruit board also exercises an export monopoly, and the Dairy Board controls exports of cheese. The Wool Board is probably more representative of how these boards will function in future. Its mandate is to maximize returns to growers and much of its budget is devoted to promotion.

Foreign ownership cuts across the economy. Although I'm not sure about the extent of foreign control, there are numerous examples. American businesses have significant interests in Telecom and NZ Rail. In 1992 Heinz purchased the big food processing and tomato sauce concern Watties for $567m. On a smaller scale, Greggs, the food processing company in Dunedin and Auckland is now part of Cerebos Greggs which in tum is owned by Suntory. Feltex, NZ's biggest carpet manufacturer has a British owner; the Summit carpet yarn mill in Oamaru is owned by Sumitomo. The house I was living in in Dunedin is owned by someone from Hong Kong.

Media
New Zealand's biggest newspaper, the New Zealand Herald, has a circulation of around 250,000. Other major papers are the Press (Chch, circ. 102,000), the Dominion and the Evening Post (Wellington) and the Otago Daily Times (Dunedin). In televisionland, in addition to the state-owned Television One and Channel 2, the privately-owned TV3 now seems well-established after rocky beginnings. Programming includes. significant amounts of American junk such as Donahue, Oprah, Remington Steele and Santa Barbara; sport is popular. New Zealanders who own television sets pay an annual fee of $110 which goes to develop NZ programming. There is some talk about selling Channel 2, but concerns about foreign ownership and greater incursion of foreign programming will likely keep this on the slow track for some time.

Culture
Statues of her most gracious majesty Queen Victoria, cricket and the customs of government remind one of NZ's British heritage, NZ still has honesty boxes for the sale of newspapers and home delivery of milk. However, from fast food restaurants (a McDonald's opened in Dunedin five years ago) to second-rate American movies, to a significant proportion of television programming, it is American culture that is seeping in.

NZers enjoy their position of being "down under" away from it all. Tourism is growing rapidly, bolstered by NZ's clean, green image. Activities such as kayaking, bungy-jumping and tramping are abundant. NZ is now the preferred overseas destination of Germans; I certainly met a lot of people from Germany. From one million visitors in 1991, the tourist influx is expected to increase to between two and three million by 2000.

The Heart of New Zealand
At the heart of any country are its natural resources. Ship Cove in Queen Charlotte Sound at the top· of the South Island is a good place to begin. Captain Cook stopped here five times in his travels. A walk on the Queen Charlotte track takes one through native forest with towering tree ferns and giant singing trees. On many lower slopes the forest was burned in the last century in a futile effort to establish sheep farms and is now slowly regenerating.

Another good place to find New Zealand is at Lake Taupo, the big lake in the center of the North Island. Volcanic country is visible to the south, and there is much geothermal activity in the area. The Waikato River flows north from the lake and supplies about half of the North Island's power. (NZ households and businesses pay among the lowest electricity prices in the world because of hydroelectricity).

Finally, there are the beaches, many of which are at the ends of unsealed roads, and still relatively unvisited.

Because NZ is a small country, the outdoors seem much more accessible than in the States. There are concerns over exposure to the sun, "changing weather" and even giardia, but it seems like a greater proportion of the population finds time to engage in outdoor pursuits like sailing, boating and golf than in the U.S..

Of course most people live in the city, working in offices and retail outlets. There is also a strong rural sector based around sheep farms in South Island, cattle in the North Island, and other agricultural pursuits. I visited a farm near Ranfurly (population less than 1000) located in central Otago to get a taste of this lifestyle. If one is running a farm it keeps one busy; otherwise it might get a little slow at times.

Future Directions
Within three years, New Zealand will hold elections under the MMP system. Whether this will lead to the chaos predicted by MMP opponents remains to be seen, but predictions are that new parties will emerge leading to coalition governments.

New Zealand has not cut its ties to the monarchy, but this may happen in the next decade. An editorial in the Press (Chch, 14 January) says that "... a New Zealand slide to republichood appears irresistible." The editorial forsees a constitutional connection between Australia and New Zealand, and states, "[I]t is bound to be intimate, perhaps amounting to a union of sorts, and will probably come about quite rapidly."

Settlement of Maori claims, if mishandled, could lead to friction. The bulk of claims have yet to be resolved, and this will clearly be a major story in the coming years.

If tourism increases as predicted, it may bring problems in addition to foreign exchange. Already some accomodation shortfalls are seen.

New Zealand will continue to be a trading nation. The recently-concluded GATT negotiations should make room for more NZ exports in the next five to ten years.

ema 24 January 1994

A corner store and a supermarket in Dunedin.