Why I’m Optimistic About New Zealand And Resource Extraction

I’ve been reading my archives and realised that I probably come across as pessimistic on the prospects of the New Zealand economy. I think it’s important to clarify that I am only pessimistic about certain sectors and certain public sector agencies.

For the long run economic growth prospects of New Zealand, I am extremely optimistic. In fact, I think that New Zealand will outperform other OECD economies as the labour force slowly realises that building valuable skills is more important than simply jumping through hoops and obtaining pieces of paper to signal conformity.

Why is that? Well, my story goes something like this: New Zealand still has an enormous number of opportunities, but there is cultural reluctance to exploit them. I’m obviously talking about resource extraction. Oil is our 4th biggest export and the best wages seem to be in Taranaki for those with valuable petroleum related skills.

I think that many people against resource extraction are not only ignoring the clear economic benefits, but the reality that disasters only attract media attention because they are rare. A cost/benefit analysis has two sides – the costs and the benefits! It is incredible that so many people (secure in their middle class lifestyles) would be against something that would go towards solving the problems they wail about so loudly (income inequality, low wages for working class households etc).

The economy of Taranaki grew 46.9% from 2007 to 2010 according to Statistics New Zealand’s recently released regional GDP data. Imagine what offshore energy projects could do for the people of the East Coast? Imagine what offshore energy projects could do for continuing the New Zealand economic model without needing to resort to overseas capital?

Bad stuff happens when we let elitist greenies interfere with commercial activity. That the Department of Conservation did not attract the level of criticism it should have is an indication of how elitist greenies have captured the media and enjoy putting the thumb on working class households who have the audacity to work in resource extraction.

I am optimistic about New Zealand’s future because slowly, project by project, ordinary Kiwis are going to reap the benefits of resource extraction projects and achieve the lifestyle goals they want. Slowly, wage increase by wage increase, Kiwis previously victims of greenie brainwashing will realise that the Green Party wants only to deny them an opportunity to get ahead in life and provide for their kids.

I simply cannot take all of the wailing about potential disasters seriously when the anti resource extraction crowd ignore what they’re really doing – reinforcing the current income inequality and wealth inequality that higher wages in resource extraction would do wonders to alleviate.

We have to remember that despite all of the Green Party rhetoric against any commercial activity, there is a non-trivial amount of New Zealanders willing and able to work in resource extraction. Denying them the opportunity because there may be some environmental costs is sadistic in the extreme.

You cannot simultaneously claim to be against resource extraction and for reducing income inequality. It is a massive logic fail. If more resource extraction projects went ahead, an enormous amount of labour would have to be trained up. The opportunities for iwi to provide training schemes in particular are enormous.

If your knee jerk reaction to this post is “But Rena!” or “But Deepwater Horizon!”, please check your privilege. You’d be missing the point I made earlier that disasters attract so much attention because they are rare. This is also not a call for no safety standards (which would obviously fail a cost/benefit test & from an incentives analysis), so think clearly before having a go at a different perspective on resource extraction.