Productivity is the biggest long-run determinant of wages and living standards. Our capacity to raise our standard of living depends on our ability to raise output per worker – the amount of goods and services each worker produces and the value they add.
However, long-term productivity growth is not yet meeting our aspirations, which means many of our aspirations for a better quality of life are going unmet. New Zealand's low productivity growth is a long-term problem that has been an issue across a timeframe of generations, not general elections.
Raising our productivity performance is the biggest economic challenge facing New Zealand, and will require a sustained effort on a number of fronts. Treasury is publishing its work on productivity performance and what matters for productivity in order to broaden and deepen public discussion on this important topic.
Productivity is New Zealand's biggest economic challenge
Productivity and labour force participation are the key drivers of economic performance, higher wages and higher living standards. With an unemployment rate that is around the lowest in the world the biggest gains in New Zealand’s future economic performance will to have to come from productivity growth.
A number of papers have been produced as part of the Treasury's productivity series which can be viewed via the link below.