New Zealand

E

Energy

Electricity is generated in New Zealand by hydroelectric power stations and thermal power stations. Hydroelectricity accounts for 59 percent of the country’s total electricity generation. The remainder comes from thermal power plants, which rely on three fuel sources: geothermal steam, natural gas, and coal.

New Zealand has many hydroelectric facilities that convert the waterpower of rivers and lakes into electricity. In 1965 the power transmission systems of the two main islands were linked by submarine direct-current cables across Cook Strait. These cables send hydroelectric power from the South Island to the North Island. The main thermal power stations are located on the North Island, including a geothermal power plant in the central volcanic plateau, a gas-fueled plant in the western Taranaki region, and a coal- and gas-fueled plant south of Auckland. Electric heating in homes is supplemented in parts of the North Island by natural gas from fields in the Taranaki region.

New Zealand imports about half the petroleum it consumes. The balance comes from domestic oil fields in the Taranaki region, both onshore and offshore. Natural gas is also used to manufacture synthetic gasoline, and some motor vehicles run on forms of natural gas. Since 1973, when world oil prices rose sharply, New Zealand has made considerable efforts to reduce its dependence on imported petroleum and, more generally, its consumption of petroleum products. Measures included switching the fuel source of the thermal power stations from oil to coal and gas.

F

Transportation and Communications

New Zealand has 93,000 km (58,000 mi) of road, 64 percent of which is paved. Most roads, even between big towns, are only two lanes. In rural areas one-lane bridges are common, and occasionally motor vehicles and trains must share them. The networks of urban motorways planned for Auckland and Wellington in the 1960s have yet to be completed. Ownership of motor vehicles is high by international standards, with approximately 1 vehicle for every two people.

---

---

The country has about 3,900 km (2,400 mi) of narrow-gauge rail track, forming a rail network that links most of the country’s urban and agricultural centers. Developed by the state, the rail network was sold to private enterprise in the early 1990s. The network includes ferries carrying freight and passenger rail cars from Wellington to the South Island. Substantial quantities of goods are transported by rail. Passenger travel is limited to some long-distance trains, used mainly by tourists, and commuter networks in Wellington and Auckland. The principal shipping ports are at Auckland, Wellington, Tauranga, and Lyttelton (near Christchurch).

Air travel is the preferred mode of travel between major cities. Air transport is widely used, with numerous airfields located throughout the country to serve private pilots. Air New Zealand, the national airline, and the Australian airline Qantas operate international as well as domestic flights. The primary international airports, serving many different airlines, are in Auckland, Wellington, and Christchurch.

The communications industry in New Zealand is competitive, with a number of companies offering Internet access, cellular-phone services, and basic local and long-distance telephone services. The government sold its national telecommunications company to the private sector in 1989. Nearly all homes have telephones, and New Zealanders are avid Internet users.

Two dozen daily newspapers are published in New Zealand, but none is distributed nationwide. The highest-circulation newspapers are the New Zealand Herald, published in Auckland; the Press, in Christchurch; and the Dominion and the Evening Post, both in Wellington. Freedom of the press is guaranteed in the New Zealand Bill of Rights, and government regulation of the media industry is minimal.

G

Foreign Trade

New Zealand has always been a trading nation and is dependent on exports to buy imports of oil and a wide range of manufactured and consumer goods. The country typically spends more on imports than it earns from exports. In 2004 the value of exports totaled $20.3 billion, and the cost of imports totaled $21.3 billion. World prices for New Zealand’s primary products have not kept up with prices of goods that New Zealand imports. The country has sought to diversify its product offerings and trading partners since the early 1970s in response to changing world demand and prices. The United Kingdom was long the largest export market, but its demand for New Zealand’s primary products, especially lamb meat and butter, declined after it became a member of the European Community (now European Union) in 1973. Australia then became New Zealand’s chief trading partner, and in 1982 the two countries secured close trade and business ties in a bilateral trade agreement, the Closer Economic Relations (CER) agreement. Among other provisions, the agreement phased out tariffs for goods traded between the two countries.

The major export destinations are Australia, Japan, the United States, the United Kingdom, and South Korea. The key export groups by order of importance are dairy products, meat, timber, and fish. The main sources of imports are Australia, the United States, Japan, China, and Germany. The most important imports are mechanical machinery, vehicles, electrical machinery, and mineral fuels. Imports of unprocessed products, notably metals and unrefined petroleum, are also significant.

H

Currency and Banking

The monetary unit is the New Zealand dollar, which is divided into 100 cents (NZ$1.40 equals U.S.$1; 2005 average). The Reserve Bank of New Zealand (founded in 1934) has the sole power of issue. The banking industry was deregulated in the 1980s. Legislation that took effect in 1987 allowed the incorporation of foreign banks into the domestic banking system, and this resulted in an expansion of the number of banks. The great majority of registered banks in New Zealand are now foreign-owned. In 2002 the government-owned Kiwibank opened with the purpose of serving small businesses and investors, as well as keeping all its profits in New Zealand. The New Zealand Stock Exchange (NZSE), created in 1981 as the successor to the Stock Exchange Association of New Zealand (founded in 1915), is the only stock exchange in the country.

VI

Government

New Zealand is a constitutional monarchy with a parliamentary form of government. After British sovereignty was established in New Zealand in 1840, the Constitution Act of 1852 created the first system of government, including a two-chamber legislature and provincial councils. Additional legislation subsequently modified most of its provisions, such as the elimination of the legislature’s upper house in 1950. Like the United Kingdom, New Zealand does not have a single written constitution. Instead, constitutional legislation is an accumulation of statutory and customary laws. The miscellaneous laws are given cohesion through precedent, tradition, and unwritten formal rules known as conventions. The Constitution Act of 1986 consolidated and augmented New Zealand’s collection of laws. New Zealand maintains close ties with the United Kingdom as a full member of the Commonwealth of Nations.

	More from Encarta
	•  Presidential Myths Quiz •  Coffee break: Recharge your brain