ACT will:

• Make it government policy to view policy decisions through a productivity lens, whereas government currently emphasises identity, the Treaty, and the climate
• Set an explicit target for New Zealand to be in the 10 fastest-growing economies in the OECD
• Introduce a range of productivity-boosting policies to boost productivity growth.

“Labour and National governments have neglected productivity to the point where former communist countries are now wealthier than us. Only ACT is serious about putting productivity at the centre of everything government does”, says ACT Leader David Seymour.

“Today, both parties are basically offering to carry on in the same direction. The only difference is that you might get different handouts from the same dwindling stock. It is time for real change, but that will depend on our productivity.

“New Zealand workers have been less productive than workers in other developed countries for half a century – that’s why we can afford fewer life-saving pharmaceuticals, and have substandard housing and poorer healthcare. Low productivity is quite literally a matter of life and death.

“We like to believe New Zealand is a rich country, but we’re not. For every hour we work, New Zealanders produce 23% less value than Australians or 41% less than Americans.

“Jacinda Ardern’s Labour promised to put kindness, the climate, the Treaty, and child poverty at the centre of everything. But all of that requires higher productivity to pay for them. National promises better management of the same bad policies, unwilling to reverse Labour’s trajectory or face up to decades of decline. To arrest decades of decline and deliver real change, ACT says we must put productivity at the centre of everything government does.

“We once wanted to be in the top half of the OECD. For productivity, we’re now 30% below the average of the top half of the OECD. We’ve made no progress on this since 1996 – under Labour and National governments.

“The case of Ireland shows that when a government takes productivity seriously, and enacts policies to boost productivity, wages and living standards rise. Ireland has opened itself up to overseas investment so businesses and workers can be more productive, got its infrastructure financing and funding tools right, and taken education performance seriously.

“As a result, Ireland’s productivity has grown at double the rate of New Zealand’s since 2000.

“Higher productivity growth - producing more valuable stuff - is the main driver of higher wages. The only way New Zealanders can afford better healthcare, housing, education - anything, really - is if workers first produce more valuable goods and services to sell to the world. Poor productivity is bad for us all. It means lower wages for workers, lower profits for businesses, and higher taxes to afford the same public services.

“New Zealand’s short-term economic challenges under Labour are substantial but our biggest economic challenge is productivity. Years of woeful productivity growth under governments of both colours leave us barely clinging on to first world status.

“Any Government ACT is part of will publicly state its objective for New Zealand to be in the top 10 fastest growing economies in the OECD, as measured by real GDP per capita growth. To achieve this target in 2019, we would have had to achieve 2.4% growth, compared to the 0.7% we actually achieved.

“To achieve this goal, the next Government will need to put productivity at the centre of everything it does. For example, Cabinet papers require Ministers to ask whether policies will have Treaty, gender, climate or other implications. Instead, ACT will ask how policies impact productivity and economic growth.

“An explicit objective for economic growth will focus the minds of the public service, allow Ministers to shoot down anti-growth policies, and ensure voters can hold the Government accountable for its performance. In Singapore, such targets have long been publicly announced and are used by the Government to measure its own performance.

“Poor productivity growth should be a crisis for New Zealand, but successive governments of both stripes barely talk about it, let alone do anything about it.

“We’ve had governments that have talked endlessly about putting children, the Treaty, and climate at the centre of everything. ACT proposes that a wealthier, smarter society will be better positioned to face its challenges if it puts productivity growth at the centre of everything.”

The full policy can be found here.

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