New Zealand’s long-term trend of productivity under-performance is the biggest economic challenge facing policy-makers and both the public and private sectors in New Zealand, Secretary to the Treasury John Whitehead said today.
Speaking at The Icehouse business growth centre in Auckland, Mr Whitehead said that productivity performance is critical to raising the living standards of New Zealanders.
“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. 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. It comes back to the old adage about working smarter rather than harder,” said Mr Whitehead.
Mr Whitehead emphasised that productivity performance has been an issue since the 1970s and raising performance would require a sustained effort on a number of fronts.
“New Zealand’s under-performance on productivity is not a brand-new problem with quick-fire solutions. We need to take a long-term view about what matters for productivity and what we can do to improve it.
“Productivity is a complex challenge, but taking a broad perspective it can be thought of in terms of five interlinked drivers, all of which have a part to play in providing the conditions to enable firms to thrive. These drivers are enterprise, innovation, skills, investment and natural resources.
By investing in new capital, increasing skill levels, introducing new innovations, encouraging entrepreneurial activity and promoting natural resource management, New Zealand can achieve productivity growth, higher incomes and a better standard of living. Making best possible use of our international connections will be crucial to succeeding in this endeavour.”
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