Wrong policies lower productivity standards

Wrong policies lower productivity standards
Dr Parmjeet Parmar

Wellington, November 27, 2019

New Zealand’s economy has a lot going for it.

Our terms of trade are at historical highs, interest rates are low and the Government, due to National’s sensible spending and fiscal restraint, has inherited large surpluses. We should be doing well.

But we aren’t, and this Government’s ignoring the problem.

Under this Government, about three quarters of New Zealand’s economic growth is driven by population growth, not productivity improvements.

If we want to be a higher wage, higher growth economy, we’ve got to focus on lifting our productivity – or output for every hour worked.

Our growth per person, the true measure of our economic progress, currently stands at just 0.5%, well behind most of our peers in the OECD.

Business confidence dips

The Government’s complacent insistence that everything is hunky-dory is one of the reasons business confidence is stubbornly low. Simply telling businesses to ‘be confident’, as the Prime Minister did this week, doesn’t cut it.

If the policy settings that give them confidence aren’t right, businesses won’t invest, expand or grow.

What Kiwi businesses need is the certainty of a government that won’t shut down industries overnight, like it did with the oil and gas industry in Taranaki.

This Government has caused stagnation and added to skills shortages through ever-longer visa processing times, overseen an infrastructure crisis, created uncertainty by threatening new taxes and made a hash of key promises like KiwiBuild and Light Rail.

It’s not just uncertainty. Look at the costs this Government has piled on. Petrol prices have skyrocketed, primarily due to the excessive taxes heaped on by this Government, while the median rent is up $50 per week. In some places that’s even higher – in Marlborough, they’re up by almost $80 a week.

Rising cost of living

All of these costs feed into a higher cost of living. If petrol costs more, getting food from A to B is going to cost more, and consumers are the ones who’ll ultimately pay.

If roads aren’t being built, it’ll take longer to get there – that’s another cost that gets passed on to Kiwi businesses and ultimately, Kiwi consumers.

Piling on costs like this hurts the businesses and consumers who can afford it the least. This Labour-led Government is slowing New Zealanders down not just on the roads, but in terms of the progress they can make.

New Zealanders just can’t afford this Government.

National’s promise

Conversely, giving businesses the confidence to invest in new staff, take risks and grow their businesses while remaining competitive benefits all New Zealanders.

If we are elected in 2020, National will restore our economy with our positive economic plan.

We’ll go to war on unnecessary regulations and unashamedly focus on growth. We will index tax brackets to inflation, introduce more flexible labour laws, encourage the flow of investment into New Zealand businesses, progress RMA reform, not implement any new taxes in our first term and we’ll revive our economy so that we can lift our aspirations.

The economy isn’t everything, but it’s important. A strong economy is what enables New Zealanders to do well, increases the chance of finding satisfying and well-paid work and afford to enjoy their leisure time. Kiwis deserve a government that will focus on unlocking that strong economy.

Dr Parmjeet Parmar is a Member of Parliament on National List. She is the Party’s Spokesperson for Research, Science and Innovation and Associate Spokesperson for Economic Development. The above article was sent to us on Friday, November 22, 2019 but delayed by us. Sorry.

 

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