A snapshot of New Zealand in the last two decades in one graph.
Labour productivity growth (in the measured sector of the economy) surged in the1990s as the benefits of the economic reforms of the 1980s and early 1990s materialised. In this period productivity grew faster in New Zealand than in Australia.
Then in the latest decade, with policy reversals and a focus on income redistribution rather than growth, productivity improvement slumped. Australia outperformed New Zealand, even though the rate of productivity growth fell in Australia too as the Howard government’s reform efforts slackened.
New Zealand must return to the earlier productivity performance and improve on it to achieve the goal of catching Australia by 2025.
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