From Extraction to Inclusion:

A new economic narrative for

the 2020s
Max Rashbrooke
School of Government, Victoria University
November 2023

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What is the economy?

• The systems we create for producing, exchanging and

consuming goods and services. These systems determine how
resources are allocated, and aim to fulfil people’s needs
• The conventional or formal economy is largely about fulfilling
people’s material needs, and involves the exchange of goods
and services for money
• GDP is the monetary value of those goods and services; GDP
growth is the growth in that value (all this includes
government)
• There are other economies (household, informal, etc)

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Visualising the future: doughnut economics

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Environmental overshoot

• Among industrialised nations, NZ has 6th highest greenhouse

gas emissions: 16.9 tonnes of CO2 p.a. (much from the rich)
• 781kg of municipal waste per person, more than all but two
other developed countries
• Some of the OECD’s most polluted rivers
• World’s highest proportion of threatened animal species

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 Social undershoot

• Roughly one child in ten lives in poverty

• Some 60% of the population is “economically vulnerable”
• 300,000 in energy poverty
• 100,000 people in severe housing deprivation
• Over 20,000 people on state house waiting list

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 Landing in the safe space

• Respecting environmental limits: regeneration

• Being agnostic about growth: “a-growth”
• A greater emphasis on “good” as opposed to “bad” growth
• A distribution of resources that supports wellbeing for all
• Providing the material underpinnings of human flourishing:
the goods and services that we need to live well, in harmony
with each other and the planet

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The Extraction Economy

Workers in New Zealand work longer hours and for less reward
than workers in most other OECD countries … We are one of a
small number of OECD countries with both a low level of
labour productivity and low productivity growth. For the last 25
years or more New Zealand’s income per person has stayed at
about 70% of that in countries in the top half of the OECD.
– Productivity Commission

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Extraction from nature: low value, low wages

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Extractive housing markets

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Fiscal extraction: robbing the future

• 2020 $5bn p.a. investment in R&D is limited by global

standards
• OECD average: 2.74% vs just 1.46% in New Zealand
• Under-investment in infrastructure: c.$200bn shortfall
• General lack of long-term investment or wealth fund

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Extracting value from frontline staff

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The underpinnings of extraction

• Individualism
• Competition at the expense of collaboration
• Market fundamentalism and small government
• Neglect of the public good
• Trickle down
• Invisibility of environmental damage and inequality
• Fiscal surpluses at expense of social deficits

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 The big shift: from extraction to inclusion

• Compassion, solidarity, reciprocity

• Invest in people and the long term
• No greater tyrant, or threat to entrepreneurship, than poverty
• Bottom-up and middle-out
• Role of government crucial: infrastructure, missions, etc
• Tax as acknowledgement of collective success

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What this looks like in practice
1. Environmental bottom lines: regeneration
2. Investment in people: children, welfare, skills, retraining
3. Acknowledging informal economies: time and support
4. Making work pay: tackling precarity
5. Infrastructure investment: the foundations of growth
6. Housing: 43,000 more state houses
7. Education and health: investment that pays for itself
8. Democratic reform: including the workplace
9. Closing tax loopholes: funding public goods
10. A “just transition”: good green jobs
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The goal

• The prize is a vibrant, flourishing economy, where

people can live with meaning and dignity in their lives,
in harmony with each other and the planet
• And we get there by moving from extraction to
inclusion: seeking collective success and investing in
people

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A whakatauki
Ki te kotahi te
kākaho ka whati, ki
te kāpuia e kore e
whati.
If there is only one
reed, it breaks
easily; but gather
many together and
they will not break.
 Further information
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