The free market saves lives. It's not a slogan you will see daubed across walls, or held high on placards by anti-capitalism demonstrators. But this is one slogan that is grounded firmly in fact. In countries without economic freedom, children are 14 times more likely to die under the age of five than children in the nations with the greatest economic freedom.

Economic freedom can be correlated to greater access to clean water and essential drugs, and to a more equal distribution of the risk of death. And, crucially, a high level of economic freedom is a precondition for prosperity and growth.

Attaining economic freedom means getting the balance right between too much government and too little. Do citizens have secure rights to legally acquire and retain property? Do they have the freedom to engage in voluntary transactions, inside and outside a nation's borders? Do they have freedom from governmental interference and control over their transactions with other citizens? And are they free from governmental expropriation of property?

Every year the international Economic Freedom Network - of which New Zealand's Business Roundtable is a member - publishes a report that monitors each country. It ranks countries on an index that shows us which are headed in the right direction and which are not.

Countries in the top 20 per cent of the economic freedom index had average per capita incomes of US$23,000 ($38,500). Countries in the bottom 20 per cent had average annual incomes of just over US$3,000.

The good news is that this year's report shows New Zealand ranks fourth-highest in the world in terms of total economic freedom. The bad news is that we made the vast majority of our progress in the 1980s and 1990s, and have been marking time since then. If we continue standing around patting each other on the back, it won't be long before other nations speed past us - either because we're slipping, or because other countries are moving ahead. Because we're such a small nation, we are critically dependent on international interest in our economy. If we lose our place in the line, we will find that more competitive countries start to get more attention.

The Economic Freedom Network's report - available at www.nzbr.org.nz - establishes each nation's ranking by measuring performance in 50 fields, from judicial independence to the ease of starting a business. In 1975, we were mediocre in nearly every measure - there were 33 countries that had greater economic freedom than ours. By 1995, we were the third-most economically free country in the world.

It is disturbing to note our slow but sure deterioration since then. Although we've slipped only one ranking internationally since 1995, it could be only a matter of time before we find ourselves well down the ladder again.

Between 1995 and 2001, we lost ground in 26 of the 50 measured fields. Increased regulations for businesses, more red tape, more government intervention and less flexibility have resulted in New Zealanders losing more economic freedom.

Not all of the changes have been gradual. Between 2000 and 2001 we slipped markedly in the area of government-imposed bureaucracy. The report shows there are more administrative obstacles for new businesses, more regulatory trade barriers, and greater hidden import barriers.

Next time a political pundit claims this Government - or the two before it - has been prudential, ask why our rating for sensible government spending has plummeted since 1995. New Zealand also scores poorly for its size of government - we rank around 40th in the world for bureaucracy. The Business Roundtable makes the point that no country has achieved annual per capita income growth of 4 per cent or more - the rate the Government is targeting - on a sustained basis with total government spending at New Zealand's level.

This report gives us an objective view of our country's standing. The Nobel laureates and scientists who put together this measure had no vested interest in local political squabbles. This report provides a dispassionate, impartial view of the Government's performance and direction.

Neither of the major political parties today can take any pride from the fact that the politicians we should thank for freeing up our economy almost all left the Beehive 10 to 15 years ago.

It is disconcerting to realise that this report marks New Zealand for the events of 2001 when we consider the legislation that has been passed since then.

Ratifying the Kyoto Protocol, expanding the role of local government, and new health and safety legislation have all come since.

And dumping access to the Privy Council and the proposed Holidays Bill are two more changes that could see New Zealand continue its slow slide back to mediocrity.

What this country needs is a growth strategy that is founded in reality, and based on the tenets of greater economic freedom.

We may be in the comfortable position in New Zealand where we don't need greater economic freedom in order to save lives - but there are many under-paid New Zealanders who could certainly do with it to improve their livelihoods.

For more information, contact:

David Young
Communications Manager
Ph: 04 499 0790
Email: dyoung@nzbr.org.nz

Web: www.nzbr.org.nz