Here is a striking comparison of New Zealand and Australian economic performance from the recent OECD economic survey of New Zealand.

 Click to enlarge


The OECD comments: 

The global financial crisis has probably resulted in a permanent reduction in most OECD countries’ potential output, in part due to capital decumulation, and it may have also led to a rise in structural unemployment, possible hysteresis in labour supply and a fall in total factor productivity…  In New Zealand, however, potential growth as estimated by the OECD had started to decline well in advance of the crisis, starting around 2003 (Figure 1.5).

The New Zealand chart illustrates both the huge improvement in economic performance following  the economic reforms of the 1980s and early 1990s and the dramatic deterioration, from as early as 2003, with the failed policies of the last Labour government.


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