Minister for Trade and Export Growth David Parker unveils government plan to boost productivity including ideas borrowed from Singapore. National offers alternative plan

Minister for Trade and Export Growth David Parker unveils government plan to boost productivity including ideas borrowed from Singapore. National offers alternative plan
David Parker.

David Parker, Minister for Trade and Export Growth and Acting Minister for Economic Development, has outlined the government’s plans to boost New Zealand’s lagging productivity.

And the country’s agritech sector looks set to play an important part in it.

Parker released a report by the Ministry for Business, Innovation and Employment (MBIE) on Tuesday titled: From the Knowledge Wave to the Digital Age: Growing Innovative Industries in New Zealand which sets out the Government’s proposal.

Central to the Government’s plan to boost productivity are sector-led Industry Transformation Plans, which Parker says were copied from Singapore.

Each plan will be unique to the particular industry it covers, but will set out an agreed vision for the future state of the sector and outline the actions required to realise it, including investment, innovation and skills development.

“Boosting productivity, including redirecting investment towards more productive sectors, is crucial if New Zealand is to lift the standard of living of all Kiwis, and this will be a key initiative for achieving this,” Parker says.

The key industries that will be the focus of the Industry Transformation Plans are agritech, digital technologies, food and beverage and forestry and wood processing. But MBIE says overtime it could extended to cover other industries.  

“The agritech sector has been chosen as a key focus because it brings together two of New Zealand’s key competitive advantages – our expertise in agriculture and horticulture with our well-educated workforce,” Parker says.

“New Zealand has a strong economic foundation with low unemployment, government surpluses and low inflation but our productivity is lagging. Sustainably boosting productivity – creating more from our resources while staying within environmental limits – is key to raise the living standards of all New Zealanders.”

Parker says New Zealand needs to move from volume to value in sectors like agriculture.

The MBIE report says while we have stable economic growth, low unemployment and a strong regulatory environment, our productivity has been lacking for a number of years and we have continued to fall behind our main competitors.

“Our economic growth has been too dependent on high levels of net migration and house price inflation driving consumption and demand for extra infrastructure.

“Too much of our capital has been skewed towards speculative asset classes, like rental properties, rather than investment in growing new points of competitive advantage. The Productivity Commission notes that these factors have contributed to low capital intensity in our productive sectors – put simply, there has not been enough money invested in our productive enterprises.

“Technology transfer and resource allocation is poor and our exports remain focused on low-complexity products. While some progress has been made in diversification, our exports remain focused on too few products and too few markets.”

The report says the Government has taken a number of steps to direct investment into the productive sector and away from speculation in property, this includes the introduction of a 15% R&D tax credit, ring-fencing losses from property rental portfolios, extending the bright line test from two to five years, and banning foreign buyers of existing New Zealand homes.

It says New Zealand is facing new challenges and opportunities due to technology. The nature of work is being profoundly affected by artificial intelligence and automation, but this is also creating opportunities for businesses who innovate and develop their businesses using such technology.

“Many applications of technology have global reach and are highly valuable. Globalisation and digitisation are both reducing the tyranny of distance, but paradoxically, they are increasing reward for scale, as the capital required to expand new digital goods and services into global markets can favour larger economies with deeper pools of capital.”

'The higher the productivity of a country, the higher the living standards'

According to the Productivity Commission the reason we need to lift our productivity is pretty straight forward.

“Generally speaking, the higher the productivity of a country, the higher the living standards that it can afford and the more options it has to choose from to improve wellbeing. Wellbeing can be increased by things like quality healthcare and education; excellent roads and other infrastructure; safer communities; stronger support for people who need it; and improved environmental standards.”

It says New Zealand used to have some of the highest living standards in the world, but it has slipped in more recent decades.

“Our productivity is now much higher than it was, but has not increased as quickly as other countries and our income growth has been slower. As a result, we collectively have fewer options for improving wellbeing than if New Zealand had performed better.

“The lag in relative productivity matters a lot over time. About 700,000 New Zealanders now choose to live abroad for the living standards and options offered in other countries (such as wider employment choices, higher incomes or better quality social services).

“With New Zealanders already among the hardest working people in the OECD in terms of hours worked, improving productivity is the most likely way of achieving higher incomes. Even small increases in productivity growth, if sustained, can have a big impact on income and wellbeing.”

National's alternative plan

National Party Economic Development, Trade and Tourism Spokesperson Todd McClay says the government proposals do nothing to address the causes of a slowing economy and reducing productivity.

“To drive innovation and productivity, the Government needs to address the problems caused by their own anti-growth policies and create certainty for the business sector. Policies that restrict foreign investment, ban industries from operating, make our labour market less flexible and put a handbrake on our economy need urgent attention. For instance the horticulture and agriculture sectors need skilled and unskilled labour now to get their products to overseas markets. The New Zealand economy cannot afford to wait decades for technological advancements, it needs real and actual solutions from the government urgently," McClay says. 

“In contrast, National has proposed an ambitious plan to grow our export market through new trade deals and targets in our International Affairs Discussion Document. We proposed a new agritech fund to boost technology in the primary sector in our Primary Industries Discussion Document. National has committed to indexing tax brackets with the cost of living, ensuring that Kiwis are no longer taxed by stealth."

 “National will also be releasing our Economic Discussion Document later this year which will propose a range of ideas to continue to boost productivity, add jobs, and grow our economy. These are the kind of ideas that help to grow our economy, support our innovators, and ensure that Kiwis can keep more of what they earn,” McClay says.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

75 Comments

Comment Filter

Highlight new comments in the last hr(s).
10
up

Yipee, the government is going to pick winners for us.

A 5-year Plan per Industry, no less.....

Doesn't seem that long since people were lambasting the possibility that Callaghan (government picking winners) could be gone under Labour. Now the idea of picking winners is bad. Hard to keep track, sometimes.

I like making money, if I thought there was opportunity in my field of expertise I would be in boots and all. That's how it goes in the business world, but our cost structure is out of wack with what we are trying to produce, the standard of living we expect may not be possible in this globalised world.

Having said that I am looking hard at putting good productive land into the carbon credit scheme, planting Redwoods on a 50 year rotation.
Looks way ahead of what I can do with sheep and beef, that is an artificial construct and it worries me it's too good to be true.

Carbon credits are a forestry subsidy. Remember what happened when we had a subsidy on sheep farming?

... they've already picked extending tax breaks to Amazon for the Lord of the Rings TV series ...

Blithely ignoring their hypocrisy of doing so , 'cos they brayed long ang hard at the Gnats when they did the exact t same thing : subsidies to attract the Hobbit movies ...

Like it or not.

NZ should partner with China to develop techs for these chosen sectors.

According to tradeintelligence.mbie.govt.nz, as at year ended Mar 2019, 31% of dairy, 58% of log and wood, 30% of meat, 19% of fruit, 35% of fish, and 51% of wool were sold to China.

IF NZ would not partner with its largest markets to develop tech and products, I am not sure what should be done.

Sadly from my experience of partnerships with Overseas tech companies, we've found that the NZ company gets absorbed along with the NZ government funds and then the NZ company is shutdown.

Not saying that NZ shouldn't work with overseas companies, you just need to build in safe guards to protect tax payers money, by not handing out Government grants to overseas companies and if there is a partnership that they can't just on the spot shutdown the NZ company at whim.

Show me the incentives and I'll show you the outcome.

Take tree planting, hard job .. "we can't find local workers". People have no transport, accommodation, clothes, etc.

The NZD compared to other Western currencies is poultry, tax is high here - right down to fuel tax.

There really are no incentives, so Plan B comes into effect, import slaves, aka foreign workers.

FYI poultry = barn yard fowl, paltry = meagre

Also comparing the value of the NZD to other currencies on a simple numerical basis is a misleading, unless you compare the purchasing power of those currencies, if a can of coke in NZ is NZD$1, and the NZD buys GBP 0.5, and a can of coke in the UK is 50p.. they have equal purchasing power.

As for your comparison to fuel prices.. compare fuel prices in most of the western world.. except for the USA and Australia we are actually doing pretty well.

https://www.globalpetrolprices.com/gasoline_prices/ There aren't a lot of "Western" Nations with lower prices. And dont forget some of them have extensive tolling too. (Not looking forward to Italy, petrol ~$2.70/litre and Autostradas are tolled.. not to mention ZTL (No cars in Cities without a pass or get a whopping fine, 50Euro+ )

Well, I can assure you a can of coke is more than a paltry $1.00. The Big Mac Index philosophy you allude to is a good point - by that I mean New Zealand is an EXTREMELY expensive country to live. Pauperism seems to be increasing.

Saying that @Pragmatist, the Mercer's Cost of Living Survey would seem to lend a lot of support to your argument/points.

"Well, I can assure you a can of coke is more than a paltry $1.00." -> https://shop.countdown.co.nz/shop/productdetails?stockcode=659936
Regular price is $1/can

Big mac index.. https://www.statista.com/statistics/274326/big-mac-index-global-prices-f... First world countries below NZ on the graph are few..

The only things in NZ that are really expensive are housing, Perhaps i'd throw in Dental too. Telecoms are a bit of a rip, partly because of population density, partly because we are a couple of islands in the middle of a big ocean..

Being the 14th most expensive country (on the index) to buy a Big Mac is nothing to be proud of [we do produced lots of meat]. We top the OECD for homelessness, child poverty, child abuse, etc. New Zealand is well known as having one of the highest costs-of-housing in relation to income, IN THE WORLD!

Even the IMF have warned using immigration and housing bubbles to boost GDP is damaging in the long run.

Simply saying, "the only things in NZ that are really expensive are housing, Perhaps i'd throw in Dental too. Telecoms are a bit of a rip" is a bit on the nose. Housing is the biggest cost to households. Everybody needs a phone and a phone plan. Many Kiwi's (including children) have teeth rotting out of their head. Insurance costs are creeping up too ..

The low value of the NZD means consumer products like clothing and imported food stuffs are expensive. Because of the focus on having a cheap dollar to boost exports, NZ manufacturers pay too much to import materials to produce products. Also many consumer products imported into NZ are of poor quality.

After all of this, correct me if I'm wrong .. NZ still runs a trade deficit.

Can't say the plan fills me with hope, but it does at least focus on what we are comparatively good at and could do better. Nationals only focus for Agri as government was a commitment to produce more. McClays focus above appears to be sell stuff(investment) add more low wages immigrants.

16
up

Government is at least half of the problem. I talked to a friend in Chile he was talking about Cherries. In NZ it's around 450k a hectare to establish cherries. His block in Chile returned enough this year, in one year to pay for the whole cost of development and now he is debt free with low costs. Also talked hops and Kiwifruit, why would you invest here, where returns on a good year are 15% and those council costs just keep on climbing?
We don't have a show unless we address costs and compliance. If we do have a problem with globalisation, I'd be very careful of export markets catching a cold.

14
up

These guys just have no idea how the real world works. Theyve effectively smashed our biggest industry (dairy) and created shocking confidence levels which leaves us no ability or desire to spend a single cent on change as none of us can see any sort of future in it given the signals these clowns have given us.

You have to have a plan to replace the industry with a better option before you get rid of the old industry otherwise there will be massive consequences - this governments a total mess and full of unbelievable idiots with the IQ of a foraging tadpole Id suggest.

they have also left industries loaded with debt. New entrants are faced with high asset prices and low returns, basically keeping the indebted in place, asset prices at records has stopped innovation and creativity.

And that debt is now a very real problem for the dairy industry................. or should I say the Aussie Banks.......

Sorry Grumpy but no. The Dairy industry only has itself to blame. Along with Andrews post add a dominant company talking value add but only doing commodities. Wasting $b on pipe dreams.
At a farm level creating an environment that is never going to attract new entrants to work.
I love Dairy farming but but not to enamoured by the industry.

I dont agree! The dairy industry crisis is a product of the system. The system allowed farms to be converted to dairy and allowed them to run production systems based on high inputs of N and huge imports of PKE. This was encouraged by all, including both Labour and National governments, all local councils and most banks, as it put money in everybody's pockets.
Now that the countries woken up to the negative environmental issues of this type of dairy system instant change is demanded, and as a result the dairy farmer is the one that has to now bare the burden of the change.
Is that fair considering that the whole country has benefited from this boom industry? I think not, as the farmer is really pretty simple at heart and was only doing what he was encouraged to do by the system.
And what about the flow on effects to the rest of the countries economics? Has anyone thought about that?
Im an advocate for change, but not a knee jerk reaction to change, instead a more measured approach where Nationally we all admit we got it wrong from an environmental point of view (and not just blame the hard working farmer) and take a measured approach to changing the dairy industry into one thats still profitable and more environmentally friendly.
This can only be lead from a government level as clearly any change is likely to be costly both from a cashflow and capital point of view. Incentives or subsidies may well be required in some way shape of form to facilitate the change as quickly as possible.
They way the current government has approached this crisis is negative and has alienated our hard working farming community from the rest of the country. That is not proactive and will only result in slower change as clearly from the figures Ive done with Overseer and good old feasibility studies show that the only way i can continue to dairy farm with the coming restrictions ( Nitrates, Cardon, Nitrous Oxide, Methane, Ecoli, sediment, Phoshate & Cadmium, labor) is to spend $3-4m on a Housed Cow Barns. Unfortunatly the Return on Capital for this spend is likely to be zero as I wont be able to increase farm production (due to restrictions) in order to justify the spend - so clearly it appears that the $3-4m spend is the cost of "my license" to continue to farm. And thats all on top of the fact that Fonterra has to be rebuilt and turned around.
A realistic, informed and proactive government (& Local government) should be working with the industry and be coming up with realistic solutions that will allow the industry to adapt to change without the massive shocks (theres already enough other shocks in the industry to contend with!!).

Andrewj - yes the bank boys are getting pretty concerned about the dairy game and its ability to rise from the ashes. Low Fonterra share price is causing a heap of headaches now specially with the highly indebted ones, plus its getting very difficult to lock in long term fixed interest rates now due to the Reserve Bank plans. Dont think Ive seen the game so unsettled since the 1980's..............

Grumpy,

'Only doing what he was encouraged to do by the system'. So,our poor old 'hard working' farmer(does nobody else work hard?) was forced by the system to overload on debt. Really? I thought they were supposed to be hard-headed business people who surely wouldn't borrow many millions without a strong cost/benefit analysis. Who else(apart from the banks of course)gets bailed out by the taxpayer? Why am I helping to pay most of the cost of M-Bovis?

liklater01,
Your statement is full of errors and as a result doesnt represent what Ive said at all. I suspect youve never milked a cow so have no understanding of the issues farmers face. If you think NZ Inc can walk away from Dairy Farming without having a suitable replacement for the export income it earns (for NZ) then you have rocks for brains - that is why the taxpayer is helping with M Bovis. Re-read what Ive written and open your brain up to the big picture, we need an orderly approach to change, but firstly we need environmentally suitable alternatives to ruminant pastoral farming which we simply don't have at the moment. Its people like you that are creating a huge divide between the city and country, I hope your riding your bike to work today and only eating food thats grown in your garden and not using any power from the grid - oh and please make sure none of your crap (thats full of nitrates and E.Coli) ends up in the Hauraki Gulf.

I have great faith in David Parker , he is one of the very few Labour ministers who has ever had a proper job outside the monastic environment of the Beehive .

At least he understands how hard it is to actually make a Dollar , unlike his colleagues who think it falls from the trees , or heaven or somewhere else

It falls from the pockets of you and I, and goes into the pockets of those who haven't earned it.

Parker may talk well but his business history and those he did business with will testify he is some one you would not want to do business with a second time, just ask his past business acquaintances.

Disagree. Would happily do more business with David Parker

Parker may talk well but his business history and those he did business with will testify he is some one you would not want to do business with a second time, just ask his past business acquaintances.

Still disagree :)

Totally agree with this statement: “Our economic growth has been too dependent on high levels of net migration and house price inflation driving consumption and demand for extra infrastructure".
Basically we absolutely have to move away from a false economy.

* Reduce the tax burden on business by reducing the corporate tax rate. That will encourage new business and grow current businesses. Our tax rate is quite high in comparison to most Western countries.

* Reduce immigration: Increase the minimum salary thresholds for work visas, currently it is still far too low in comparison to other Western countries, so NZ employer will continue to import cheap labour keeping overall wages low, that keeps us stuck in a "low wage economy cycle".
Low wages are not good for growing tech companies since they won't attract skilled staff. And we loose our educated young to overseas companies with better salaries. So we really need to break this cycle.
NZ current visa salary thresholds: https://www.newzealandshores.com/salary-thresholds-work-visas-skilled-mi...

Even a 3rd world country knows how tocharge for work visas. In PNG every foreigner with a work permit is paying the salary for one or two teachers. I just cannot understand why both Nationals and Labour believe low wage immigration is good - well the only reason might be lobbyists for businesses to lazy to invest in Kiwi workers.

Debt slaves!!!

Just looked at your link - what embarassing figures. 'Essential skills' are $21.25 per hour.

"creating more from our resources while staying within environmental limits"

Couldn't agree more.

The change needed might come as a bit of a shock, though.

11
up

He's absolutely right about this: "Too much of our capital has been skewed towards speculative asset classes, like rental properties, rather than investment in growing new points of competitive advantage." Mass real estate speculation is not a way to a sustainable economy, or high productivity. National did not seem to understand that in the past few years, and we're going to pay for it.

Agree national caused the problem and now say they have a plan to solve it! Circus

We the people have caused the problem.

Exactly. Though we did basically put a speculator as our head of state, it is no wonder they focused on speculation...

One only needs to look at the shocking productivity stats under National to see the truth. https://tradingeconomics.com/new-zealand/productivity

Only way for a developed country to effectively grow is through productivity growth. If you aren't at least keeping up with other countries, you are falling behind. Compare against Australia/USA etc etc to see the gap.

National basically ignored the problem for a decade, instead expanding our economy, not working on more dollars earned per person. As a small island nation with limited area this caused the inevitable environmental issues. They should have been concentrating on higher value industries or higher value primary products. And now they claim they know how to fix it? Please...

At least Labour have talked about it, let's see how they go about solving it.

I started reading this, expecting to be cynical and critical. But I think it's actually quite good.

“Our economic growth has been too dependent on high levels of net migration and house price inflation driving consumption and demand for extra infrastructure.

“Too much of our capital has been skewed towards speculative asset classes, like rental properties, rather than investment in growing new points of competitive advantage. The Productivity Commission notes that these factors have contributed to low capital intensity in our productive sectors – put simply, there has not been enough money invested in our productive enterprises.

How rude. You simply cannot say that out loud. It emotionally disturbs New Zealand's speculators, making them feel undervalued. Hurt feelings abound.

Yeah come on, property investors create jobs for Handymen, Plumbers, Electricians etc.......

Makes them Grumpy.

Nice and simple to demand that this changes somehow. If we don't understand the why it happened this way can we expect it to change?

I wonder if the knowledgeable human behaviour experts, you know, the economists can explain how we got here and offer some insight as to how we might alter this going forward.

David Parker bemoans the lack of a capital gains tax but says little about how renters and FHB are rorted in NZ cities. This rorting is responsible for hundreds of thousands of productive workers leaving NZ because their cost of living, in particular wrt housing + transport and their disposable income after these costs are better overseas.

There is a massive amount of evidence pointing to this being NZ's main economic problem -most recently PwC Australaisian cities study.
http://www.voxy.co.nz/business/5/337662

NZ cities could become more affordable whilst having more sustainable transport networks. There are models to copy from overseas -like Tokyo and Copenhagen which have much smaller environmental footprints.

If this government wants to keep a skilled productive workforce then it needs to do more about housing and infrastructure. For Parker his part of the equation is RMA reform as he is the Minister for the Environment.

Kiwis are over the talkfests. We need government action.

Those wanting to pin National to the wall should remember this shambles of a cycle started well before they finally came to power in 2008. I remember people signing up to night classes to learn to sing. Now I have nothing against learning to sing but I do when the government is paying for it. As for our farmers wanting to milk it (top $ per KG plus capital gain) well, things may not play out too well for them in the coming months & years. The price of productive land is way over the top, sponsored by our mates the great Australian banks, & their collective time or reckoning is getting closer. In fact, the slower & lower house prices we are seeing are a good thing for NZ Inc long term. I'd like to see everything settle by 10% at least, & then hold there for a while longer. We could all do with a breather.

So, utopia is higher living standards for everyone? Do we not already have higher living standards than any time in history?

I have to ask again as nobody seems to know the answer. What are these higher living standards we are trying to achieve? Are we trying to help others have these higher standards or merely have more for oneself? Do these higher living standards come with a higher price of living? How do we achieve something if we have no idea what it looks like?

We already produce more, sell more, have more than anytime in history yet we don't seem to have enough.

Well these higher living standards might be things like people not having to live in garages, not having one of the highest suicide rates in the developed world etc.

It's about value produced per person, not about the total size of the economy.

In addition to poor housing, we have outbreaks of third world diseases, persistently low wages and lower and lower quality healthcare/dental. Kids going to school without food/shoes even though their parents are working is a symptom of a low wage, unproductive economy.

If you can't see any of this, you are living in a bubble separated from the reality of more and more kiwis.

Oh I see all that. That's why I ask the questions. Fine and dandy to state higher living standards for everyone yet have no idea what they actually are. Curious about the 3rd world disease outbreak? I'd suggest the real issue is a high cost of living, greed and selfishness and has nothing to do with a lack of productivity.

I'm pretty sure we've had massive productivity gains over the past few decades yet these problems seem to persist and worsen. And then we harp on about a lack of productivity. A lot of reports and no real change. It appears we've either wasted the gains we've had, the gains have not been allocated to the workers or they've been sucked back out of the country. 20+ years of capital gains hasn't improved productivity but nobody wants to change this. Many are enjoying higher living standards but how can that be if we're behind on our productivity? Have all the highly paid execs and politicians really been more productive than everyone else? We have higher production, higher values and higher incomes per hour and yet the higher living standards apparently haven't materialised, at least not for those more in need. The productivity issue reeks more and more of dogma.

Maybe higher value of material crap is the problem and we need to place more value on sharing, generosity, cooperation, kindness and compassion. You know, real living standards that can't be measured by GDP, real wealth that has a real effect on human wellbeing.

Ahhh, read the lancet report of NZ in 2012. Things have only got worse since due to extra housing stress. Donkey also openly admitted we have 3rd world diseases: http://www.stuff.co.nz/national/6450935/Findings-on-disease-rate-a-disgrace

"You are pretty sure...". Nope, read this link (https://tradingeconomics.com/new-zealand/productivity). Last 10 years has been minuscule. So if you don't understand that, you don't "see all that". We have produced more by using more land which was previously forest for things like dairy and made more intensive dairy for lower and lower quality product. This just makes more and more low wage/low quality employment.

What we need, is more R&D and more investment into highly productive industry. That means tax incentives for investing in businesses that pay good wages. It isn't dogma, it is really simple. It means putting heaps of money into R&D, playing the long game, knowing that we will only need to strike 2 or 3 more hits out of every 10, to dramatically accelerate our economy.

We need more Xero's, more Weta's, more Fisher Paykel Healthcare. I shouldn't need to spell it out, Paul Callahan did so well enough over 20 years ago and we STILL haven't cottoned on to his wisdom. Instead we pay lip service to his idea's and keep doing business as usual. Our entire tax system should be overhauled to support such a step change, but nobody has the balls to do it. Generally the old people who stop the country going forward are too scared of the real change required.

Yep it's still dogma. 3000+ years of technological advances and productivity gains and we still have the same problems, but hey we're wealthier than we've ever been.

So the goal is more chronic diseases instead of infectious diseases. 3000+ years of medical advances and we still don't understand preventative medicine or apply what we do know. Apparently there's not enough money or r&d or technology to create the best conditions for human wellbeing. Ha, humans, so intelligent.

The fact that Mr. Parker is leading this actually gives me some hope that it could work. When reading National's plan my thought was why not both? Deregulate and lower taxes almost always leads to growth and the government co-ordinating could lead to better outcomes.

However, what will improve our productivity is an up-skilled workforce. This means we need to re-think our education approach and have more skills training rather than assuming everyone needs a degree. But I don't this government will dare take on the teacher's union.

I work in a hospital with a comprehensive nursing post-graduate training scheme that has been going for about twenty years. New Zealand is not receiving the benefit of this public educational investment because at least half of those trained have gone overseas, because they can get a better quality of life from their work skills elsewhere.

For NZ to retain and upskill its workforce it needs to do something about the cost of living in NZ , in particular, its housing and transport costs.

Sounds simple. If we could just predict the future and know what the economy will need. We could line up all the 5 year olds entering school and direct each one into a trade that will serve the economy. Any children left over after filling quotas could be sent off for a pointless degree. If quota isn't filled the economy would know which industries would have to produce less. It could always take all those unskilled workers, you know, the cleaners, the orchard pickers, hospitality staff, journalists, banking staff, salespeople, politicians, insurance brokers, etc and upskill them to fit the needs of the economy. Hmm why doesn't the economy just produce more athletes and celebrities?

Why don't we just make everyone "rich". We could all be equals, we could all do and have every thing we want. Nobody would miss out and we could all live the dream. Why not just give everyone a million dollars? I mean if we were all millionaires wouldn't we all be happy? We would all have financial freedom and security and wouldn't have to worry about these pesky productivity issues.

Hmm maybe if everyone had more to spend that would drive demand from the bottom up and productive businesses would be able to expand. Is it possible that our approach has become back to front? Are the assumptions around supply and demand still valid? Easy to still have demand for necessities with little disposable income, not so simple creating demand for nice to haves when a lot of consumers are struggling to have their basic needs met. Maybe if more people were working less for their needs more hands and minds would be available to cooperate and do something about the real issues, to help each other. Feels like currently all we have is a bunch of people sitting in their ivory towers demanding more from everyone else.

11
up

Key contributions to NZ's productivity by successive governments:
1 Creating a wild west financial and equities regime, destroying investor confidence (Labour ie Douglas/Cargill followed by National)
2 A failure to discourage a saving regime (successive National governments, starting with Muldoon)
3 Working for Families, encouraging Minimum Pay jobs (Labour; National becoming complicit)
4 A failure to introduce a capital gains or property tax, thus favouring non-productive investment over productive (National and Labour)
5 A short-termist emphasis on commodities over value-added (all governments)

So... what belief can there be that governments will have any will to improve the situation?

Nicely done

What precisely would the National party know now about boosting productivity that they didn't implement during their 9 years in government? I just do not give that party any credibility on economic performance. Using boatloads of third world immigrants to keep labour costs down is not a sustainable economic policy and it certainly hasn't boosted productivity...infact its done exactly the opposite. Well done NZ Inc!

That's Nationals policy through and through, drive down wages, and bring in low skilled people to keep wages down, no wonder we never get anywhere as a country with the nats getting in so often.

Interesting that the agritech sector has been identified as the focus, given that the most promising technology in the sector, when it comes to productivity gains (i.e. gene technology) has effectively been ruled out by the Luddite Green party.

Indeed, CrispR was Crisply Ruled Haram by Them Wot Knows Best. (I have been struck down with a case of Proper Case....crisply)

But why? Would you bother with the agritech sector at all in this country, its the wrong horse to back. Agri tech will explode in Africa and USA where there is immense land mass to establish production hubs upon and ample sunlight for the solar powered verticle gardens to run off. Did you see that statement agriNZ? Probably not because you're too busy chasing cows on the roadside...again tyranny of climate and distance works against us. What we need to be focussing on is TECH...webtech...get your hands dirty a different and vastly more scalable way, makes farmers bagging milk powder look stupid (which they are) by comparison.

Agri tech is fine for us to produce. You seem to be thinking agriculture in general, where bigger is better. In the Agri tech sector, often smaller is better, particularly if it is well supported.

Think Scott Technology (automated milking systems) and the new crowd popping up in the Hawkes Bay trying to do automated fruit picking.

2 businesses which we should be giving huge subsidies and tax breaks to, but nobody seems to think there is a future in. Yet every year we hear there aren't enough people to pick fruit and farmers are finding it hard to recruit milkers. It's like we are idiots being slapped in the face by a solution we can't see.

Interesting that ideas from Singapore are "borrowed".
Singapore embraced external funding in a huge way, NZ does not want that apparently. Look where it got them.
See the wages go up and the machines take over. The only reason we have low unemployment is that the wages are relatively low and the low incomes are topped up by auntie Helen's Income for Families (iow by those with higher wages). But if it was not for those low wages, machines would replace a lot of those jobs or the jobs would go overseas.
I believe that it was John Key who said at the time that "Income for Families" would mean that NZ was to remain a low wage economy for a long time. But he did not change much of it, if anything.
This is no different to what every government is saying about moving capital away from housing, yet nothing ever seems to happen. That may have more to do with the collective mood rather then political incompetence.
How to break that?

It's always been bizarre that Singapore is held up as some sort of emulatable model for a state. They are located at a unique shipping bottleneck in the heart of Asia with 70-80% of global trade passing by, with an predominantly ethnically chinese but mostly english speaking population that makes exploitation of Chinese trade with world easy. Zero similarity to anywhere other than perhaps Hong Kong.

If NZ wants to be a more successful country we need to reduce cost and time for international transport/flying - let us get our horticulture to the world. Something we could actually achieve with investment in appropriate high efficiency autonomous aircraft tech. Our distance from suppliers and customers makes it impossible for us to compete with other countries in most things.

Singapore is also a kind of tax haven. Did you know MasterCard and Visa (the NZ companies) don't pay tax here?

They pay 4% in Singapore instead...

Interesting that ideas from Singapore are "borrowed".
Singapore embraced external funding in a huge way, NZ does not want that apparently. Look where it got them.
See the wages go up and the machines take over. The only reason we have low unemployment is that the wages are relatively low and the low incomes are topped up by auntie Helen's Income for Families (iow by those with higher wages). But if it was not for those low wages, machines would replace a lot of those jobs or the jobs would go overseas.
I believe that it was John Key who said at the time that "Income for Families" would mean that NZ was to remain a low wage economy for a long time. But he did not change much of it, if anything.
This is no different to what every government is saying about moving capital away from housing, yet nothing ever seems to happen. That may have more to do with the collective mood rather then political incompetence.
How to break that?

Low productivity is the NZ lifestyle, I thought.
Others praise how clean and transparent the NZ governance (both public and private sectors) is. I always believe that is because of low productivity and lack of accountability so few people feel the need to "steal" through corruption.

The only meaningful contribution this government could do in regards to productivity is to halve the number of MPs and halve the number of taskforce/reviews/talkfests it has commissioned.

So Nationals policy? bring in more unskilled workers to work for peanuts because that helps their rich mates out, because we can't possibly just pay Kiwis a decent amount for jobs they do can we.
Sorry National that has never worked and never will work.
In other words National don't really have a plan anyway.

Want to increase productivity?

Build more new roads to eliminate Auckland's traffic congestion

Then bring in more people.

Then make the motorways wider.

Then bring in more people.

Then make the motorways wider.

And on and on.

Madness.

Billions has been spent on Aucklands roads, making them better just makes more people want to use them, so you are only going around in circles, getting Aucklanders out of their cars and onto public transports is the only way to reduce congestion there.

National says "We can increase productivity!" despite having not done so for 9 years.

And John Key said he was going to lower the wage gap for Aussie, then spent 9 years bringing in low paid workers to keep wages in NZ low, and the gap got worse, hypocrite much?