Increased productivity is vital for improved wealth and living standards in the future and everyone has a part to play to achieve it.
According to Productivity Commission Research, productivity in New Zealand is still lagging behind Australia.
Labour productivity is nearly a third lower and multi-factor productivity including productive use of capital is nearly a quarter lower than in Australia.
There are many factors responsible for the gap.
Businesses must consider how they can make better use of resources, including innovation, improving governance, investing capital, up-skilling staff, updating equipment and technology, and using natural and other resources more efficiently and sustainably.
Many businesses are addressing these issues with recent improvements in capital expenditure.
An ExportNZ Survey showed that businesses focusing on productivity would be able to overcome exchange rate pressures.
Employers, employees and their representatives should consider the need for ongoing skill development, higher productivity targets and positive contribution to company goals.
The Government has a crucial role in creating the conditions for improved productivity. It needs to actively consider whether its policies are allowing the private sector to achieve at a high enough level.
Policies that encourage investment and competition, safeguard property rights and provide for productive workplaces are fundamental, and more work is required in several of these areas.
Laws and regulations are themselves important, since key laws such as the Resource Management Act and others are actually harming productivity growth. We need a regulatory responsibility act that ensures fewer and better quality laws.
The Productivity Commission is performing a valuable task in bringing productivity issues to national attention. Our best response would be to work on improving productivity outcomes in 2014.
Phil O’Reilly is the Chief Executive of BusinessNZ based in Wellington.