Thursday, 16 February 2012 10:05

No magic bullet to lift economy

Written by 

FOR THE most part, New Zealand's growth over the next year has already been set in train, and any stabilisation is the job of the Reserve Bank.

The Government's main role is to keep looking out over the next five years or so and put in place policies that will help the economy become more competitive and productive – through good times and through bad. Again, the European crisis offers some important lessons.

Here in New Zealand we have also lost competitiveness over time, particularly as a result of poor policy decisions in the 2000s. In other words, it has got harder than it would otherwise have been for our exporters to compete in overseas markets. And it has got harder than it would otherwise have been for New Zealand manufacturers to compete with imported goods made offshore.

As a result, the industries and sectors that compete internationally actually went into recession in late 2004 and shrank in size by almost 10% in five years.

That decline in competitiveness began to turn around during the past three years.

The Government's view has always been there is no magic bullet – no one 'big bang' reform that would turn the economy on its head.

What is required is a series of good policy decisions and reforms over an extended time, in 100 different areas, to enhance the competitiveness of New Zealand firms. So we have a busy economic reform agenda, following through things we started last term and on new things we announced during the election.

For example:

We're rolling out ultra-fast broadband and the Rural Broadband Initiative, to lift New Zealand's connectivity.

We're introducing a six-month limit for granting consent to medium-sized projects under the RMA, to reduce costs, uncertainties and delays.

We're negotiating free trade agreements with nine countries in the Trans-Pacific Partnership, including the United States, and separately with a number of other countries including India, Russia and Korea.

I have tasked Bill English and Steven Joyce – the two most senior economic ministers – with driving this economic action plan. I have told them I want to see this action plan regularly updated.

The first update will be in the middle of this year.

More like this

Foreign investment is critical

Foreign investment not only brings in money but links New Zealand into foreign markets, says former Prime Minister John Key.

Not the time for tax – Key

Former Prime Minister John Key says imposing another tax on farmers now for greenhouse gas emissions won’t achieve much.

Bankers circling?

Farmers are urging banks to take a long term view of their businesses, now under growing pressure to improve their balance sheets.

Culling cows not the answer

OPINION: The agricultural sector plays a critical role in New Zealand's economic health and the lives of everyday Kiwis.

» The RNG Weather Report



» The RNG Weather Report

» Latest Print Issues Online

Milking It

Nats cop it too

Interestingly, none of the politicians managed to escape the wrath of farmers at the protest march organised by the lobby…

Why the stripes?

An experiment on a herd of cows in central Japan appears to have proven a radical, nature-inspired solution to a…

» Connect with Dairy News