With all the rhetoric about how New Zealand government spending is out of control, thus an urgent need to tighten its belt, I thought I’d take a look at how we compare with the rest of the OECD. This shows government spending as a % of GDP, plotted against GDP per capita. New Zealand is the red data point.
So we’re in the bottom third – we currently spend less on government than most rich countries. The trend line is also pretty clear. Rich, successful economies tend to have large governments.
(Mexico and Chile are the low income, low government countries at the bottom. Switzerland, South Korea and Australia are the higher income, lower government nations. Annoying, oil rich Norway is the high income, medium government outlier.)