Our music scene has its ups and downs like any, but I'd say it's pretty good in general. At the moment its main strengths are in roots/reggae/dub but we have music of a more experimental nature as well - it's fair to say we run the gamut of music. Regardless, there always seems to be a discernible NZ vibe present.
Sadly I don't get around to seeing anywhere near as much live music as I should but there's always something interesting happening. I hear there's quite a good jazz scene down in Wellington but I've never been that far south.
As for whether it has grown in the past couple of decades, I can't really say since I haven't been around for long enough. In the 80s the NZ indie scene and Flying Nun banRAB were internationally renowned and our current scene is getting some attention, but I'm not really sure what was going on in the time between. I'd say that increased exposure due to the net is really helping things because in the past, there was a lot of music that never really made it beyond Australia.
Btw have you heard Hollie Smith?
[youtube]PU5qMF5v8Q8[/youtube]