Marketing in New Zealand

Section 2

D. Distribution of wealth

After World War II, the share of money earned by wages and salaries grew, and the share earned by capital fell. The distribution of wealth became increasingly more equal throughout the country. One reason was that more women were working and making money. In the 1980’s, wealth became less distributed and almost half of New Zealand’s wealth was owned by the top 10 percent richest households while the bottom 20% of households had little or no wealth. In 2006 a census was conducted and found that three-fifths of the total income before taxes was received by men and two-fifths by women. “The average income was $32,500, but the median (the middle, with half the people above and half below) was only $24,500” (Easton, 2012). 

E. Principal Industries

New Zealand’s major industry is agriculture. About 50 percent of their total export comes from meat, dairy and wool. They are one of the largest exporters of lamb and supplies about 90 countries with meat. Right after agriculture is forestry. Nearly 27 percent of New Zealand is covered with trees. Japan and Australia are their number one consumers in this industry. Tourism is also a major part of New Zealand’s industry. “In fact, it is the top earner of foreign exchange” (Economy of New Zealand).

F. International Trade Statistics

New Zealand’s second most significant trading partner is the United States and third is Japan. On the export side of trading in New Zealand, the United States accounts for about 13 percent. These exports to the US are usually dominated by livestock. Imports to the US estimate around 12 percent and usually consist of manufactured goods. Japan accounts for about 11 percent of both imports and exports. About half of the imports from Japan are motor vehicles. Overall, East Asian countries, excluding Japan, account for around 20 percent of New Zealand’s merchandise exports. Trade with the Asia-Pacific Rim countries dominate New Zealand’s total trade (ECONOMY, 2007).

New Zealand has always been heavily reliant on international trade and capital inflows to fund new investment which makes the balance of payments an important indicator of the country’s wealth. New Zealand is usually in deficit on the balance of payments current account which makes it tougher for them to borrow money to finance the deficit (Mcdermott, 2012). Due to this deficit, New Zealand governments created a system of exchange controls to maintain their foreign currency. Currently, 1 New Zealand dollar is equivalent to $0.66 in the United States.