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This country note from Going for Growth 2015 for New Zealand identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
The per capita income of New Zealand remains low compared to other advanced OECD countries, mostly owing to a substantial productivity gap vis-à-vis top performers.
The NZ labour market is among the most flexible in the OECD, and outcomes for its young people have been among the best. However, labour-market opportunities are heavily determined by initial education, where New Zealand’s system is also successful and innovative in many ways.
As its workforce ages and major economies shift towards producing higher value-added goods and services, New Zealand will face increasing challenges to remain globally competitive and maintain high living standards. Future growth will need to come increasingly from productivity gains, and resources will have to shift towards activities that rely more on skills, technology and intangible assets.
New Zealand’s key challenges are to achieve sustainable and equitable growth while reducing macroeconomic vulnerabilities. Policies are on the right track, and reforms should focus on improving productivity and the distribution of skills.
Country Notes from OECD Economic Policy Reforms: Going for growth 2011 presenting OECD recommendations for structural reform priorities for individual countries.
New Zealand, as a resource based economy anxious to protect and promote its clean and green image, appropriately sees green growth as a natural direction for future development.
From the mid 1980s, New Zealand was widely considered to be a leader in liberalising product market regulation (PMR).
A considerable housing boom has been a key feature of persistently large saving investment imbalances in New Zealand over the past decade.
The recession has highlighted the need for structural reforms to help the New Zealand economy adjust towards a more sustainable growth path. This survey discusses policies to reduce external vulnerabilities, rebalance housing markets, improve product market regulation and foster green growth.