In New Zealand, EY partner Chris Money said success was not risk free, and he stressed the importance of economic policies focused on productivity growth.
The Productivity Commission is looking at the long-term drivers that can help New Zealand businesses increase their hourly output, but it is not writing off a role for immigration in the long-term. Indeed, Minister of Finance Grant Robertson has asked it to conduct an inquiry into the "working age" immigration system and advise how best to adjust it to promote long-term economic growth and the wellbeing of New Zealanders.
Chair Ganesh Nana said immigration had provided New Zealand with a "sugar rush", but that was not a sustainable way to grow productivity. Increased numbers of new New Zealanders spending their money on New Zealand goods in New Zealand shops wasn't enough; we needed to find ways to produce our goods and services more efficiently, to sell them to the world.
Nana said comparison of the best New Zealand medium-sized businesses — what the commission calls "frontier firms" — with their compatriots in similar, small developed European nations showed the overseas companies were more than twice as productive.
And New Zealanders were desperately playing catch-up, not by working smarter, but by working harder. Every week, Kiwis worked two hours longer, on average, than workers in similar countries.
Then after World War II we wanted to be a good global citizen by resettling the European refugees coming out of the war. So at various times through history there have been different purposes for immigration — and it's only reasonably latterly that the focus has been on using immigration to fill the skills gaps in our workforce.
The closing of the borders had exacerbated the need to look again at the drivers of economic growth. Nana said the Commission did believe there was a role for immigration — but the question was how much, and why? Their preliminary work had revealed that nowhere had the Government ever spelled out the objectives of its immigration policies. That enabled the first wave of immigrants into New Zealand. To me, that's the critical question. What would be the 'why' if we were to seriously address these challenges that we can't avoid.
There is certainly some role for immigration into the future, at the very least because we have to replace New Zealanders who have a habit of going abroad. No amount of Covid or anything else is going to stop that flow resuming. Precious Metals. Region Reports. Country Reports. Annual Subscriptions. New Zealand Economic Outlook October 19, The economy likely contracted in the third quarter, following a stronger-than-expected performance in Q2, as the country imposed lockdown measures in the second half of August amid rising Covid infections.
Electronic card transactions took a hit in the quarter, which, coupled with lower consumer confidence, hints at weaker household spending. Moreover, business sentiment turned notably pessimistic in Q3, pointing to subdued private sector activity. Meanwhile, in late September the government adopted measures to limit tax deductions on mortgage interest for residential property investors, in a bid to cool an overheating housing market.
On the pandemic front, some restrictions were recently eased in Auckland, and the lockdown in the city will be gradually scaled back, which should support activity in the final stretch of the year. Domestic demand is poised to record a softer increase, also due to less expansionary fiscal and monetary policies. That said, unleashed pent-up spending poses an upside risk, while sustained demand for commodities should support the external sector.
Pandemic-related uncertainty clouds the outlook. Private consumption will remain robust, supported by the recent minimum wage increase and the wealth effect from rising house prices. Investment will expand on the back of strong house prices, record high issuance of building permits and large public infrastructure projects gaining momentum.
Inflation pressure will strengthen as economic slack disappears by end The economy recovered strongly, supported by large policy stimulus and an effective response to COVID, but some sectors hardest hit by border restrictions, notably tourism, lag behind.
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