Govt’s plan for lifting productivity and wages entails a $30m investment and a role for the state as a partner

Buzz from the Beehive

One economic measure which Ministers of Finance can’t brag about is productivity growth.  It has been an issue of concern for decades.

In the 2022 IMD World Competitiveness Ranking, New Zealand suffered the biggest drop in rankings among 63 nations compared on measures which include business productivity.

New Zealand dropped in all competitiveness rankings. We ranked 46th for technological infrastructure and 27th for scientific infrastructure, while our track record on productivity and efficiency landed us in 48th place.

A Stuff report in August last year was headed It’s no laughing matter; poor productivity affects all New Zealanders.

It referenced OECD figures which showed New Zealand is 11th out of 34 countries for average hours worked, but its productivity is below the OECD average, when measured in GDP per hour worked.

Michael Bealing, an economist with the NZ Institute of Economic Research, told Stuff increasing productivity in the long run was fundamental to improving well-being.

 “A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”

“We have to get away from just trying to throw more labour at problems, particularly cheap labour. We have to think about using technology and using more skills-based approaches, and to be prepared to be on a learning curve.”

Today – we are pleased to report – Stuart Nash is on the case.

Mind you, his plan calls for a $30 million government investment and involves the state’s involvement in a partnership with the private sector.  Moreover, as we learn from one of two points highlighted in the ministerial press statement, it has been given a name that smacks of Stalinist economists.      

  • Industry Transformation Plan to transform advanced manufacturing through increased productivity and higher-skilled, higher-wage jobs into a globally-competitive low-emissions sector.
  • Co-created and co-owned by business, unions and workers, government, Māori, Pacific peoples and wider stakeholders.

The headline on the press statement verges on the triumphal:

New plan to increase productivity and high wage jobs across advanced manufacturing sector

A plan to accelerate the growth and transformation of New Zealand’s advanced manufacturing sector was launched at Temperzone in Auckland today by Economic Development Minister Stuart Nash.

It can be found on the Beehive website along with news that –

Government delivers on Dawn Raids commitment

The Government is today delivering on one of its commitments as part of the New Zealand Government’s Dawn Raids apology, welcoming a cohort of emerging Pacific leaders to Aotearoa New Zealand participating in the He Manawa Tītī Scholarship Programme.

The Advanced Manufacturing Industry Transformation Plan (Nash tells us) is one of eight Industry Transformation Plans created to increase productivity and performance in key sectors of the economy.

“The advanced manufacturing sector has significant untapped potential to increase productivity and high wage jobs, and to support the transition to a globally competitive, low emissions economy.  This plan sets out how that can be achieved,” Stuart Nash said.     


“These plans set out how we can transform industries by increasing innovation and productivity, and will drive higher wages and living standards in a non-inflationary way.”

If Nash has the formula for significantly untapping potential to increase productivity and high wage jobs and to support the transition to a globally competitive, low emissions economy in this industry, we suggest the PM assign him to sprinkling his fairy dust on all other economic sectors.

His statement goes on to say:

“This plan will also strengthen our regions – including regions severely impacted by recent extreme weather.

“Advanced manufacturing accounts for 10 per cent of our economy and jobs and 73.5 per cent of goods exports. Almost half of these jobs are in regional New Zealand.

“There is also overwhelming sector support for urgent action to increase capital investment in advanced manufacturing and to develop and attract a diverse high-skill high-wage workforce.”

And now for the subject of the money and who is picking up the tab:

“As a first step, the Government has committed $30 million to implement a number of immediate actions identified in the Plan. This includes $3.65 million for company-specific advice on adopting advanced technologies and processes, $4 million to upskill manufacturing workers in digital skills, and $2.9 million for company-specific support to achieve circular low-emissions manufacturing.”

Brett O’Riley, Chief Executive of the Employers and Manufacturers Association and Co-Chair of the Advanced Manufacturing ITP Steering Group, has become a party to the press statement.  He said the strong partnership approach to the plan will be key to its ongoing success.

He says that by continuing to work together, we can build world class advanced manufacturing capability in our New Zealand businesses, increasing productivity and lifting both incomes and profits.

That sentiment was echoed by Rachel Mackintosh, fellow Co-Chair of the Advanced Manufacturing ITP Steering Group and Vice-President of the New Zealand Council of Trade Unions Te Kauae Kaimahi and Assistant National Secretary of E Tū.

She says the ITP will help transform the industry so that people will choose to work in advanced manufacturing for generations to come, and that New Zealand has the opportunity to harness the creativity of the diverse manufacturing workforce to develop a sustainable industry, where people can build their skills and enjoy decent work and decent wages.

The Advanced Manufacturing Industry Transformation Plan was launched by Stuart Nash on a visit to Temperzone, an air conditioning manufacturer based in South Auckland.

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