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.
The Minister of Social Development and Employment told us in our previous Buzz bulletin about a new report which shows Government support has lifted incomes for Beneficiaries by 40 percent over and above inflation since 2018.
But the government doesn’t limit its redistribution of our taxes to dishing out money to beneficiaries. The PM and her Revenue Minister accordingly popped up yesterday to enthuse that from 1 August – today – an estimated 2.1 million New Zealanders will be eligible to receive the first targeted Cost of Living Payment.
The recipients will receive an extra $116 per month eac for three months.
International activities, one way or another, have influenced several ministerial announcements over the weekend.
The best news was that our Minister of Foreign Affairs, Nanaia Mahuta, at long last had left the country to engage in the work of being a Minister of Foreign Affairs on foreign soil. She met with Australia’s Minister for Foreign Affairs, Senator Marise Payne, in Katoomba in the Blue Mountains for the biannual Australia-New Zealand Foreign Minister Consultations.
Obviously there was much to talk about (which would have taken the Minister’s mind off Three Waters reform). The statement mentions:
Strategic challenges in the Indo-Pacific, the preservation of “the liberal international order” to underpin stability and prosperity in the region and foster a sustainable regional balance where all countries – large and small – can freely pursue their legitimate interests.
Their strong support for open, rules-based trade based on market principles.
The role of the Pacific Islands Forum in projecting a strong and unified Pacific voice on the global stage.
Their commitment to ASEAN centrality and the ASEAN Outlook on the Indo-Pacific, the importance of regional partnerships to stability, security and prosperity in the Indo-Pacific, and the role of AUKUS in this network.
Their commitment to nuclear disarmament and non-proliferation.
The Reserve Bank has been given the government’s go-ahead to tighten mortgage lending rules to try to take some heat out of the housing market.
Anupdated Memorandum of Understanding between the Minister of Finance and the Reserve Bank will enable it to implement its proposal to reduce the amount of low-deposit bank lending banks for mortgages.
Announcing the updated MOU, Finance Minister Grant Robertson today said the central bank has proposed reducing the amount of lending banks can do above a high Loan-to-Value Ratio (LVR) of 80 per cent. This lending will be lowered from 20 per cent to 10 per cent of all new loans.
Consultation will start with banks later this month, with a view to introduce this from 1 October, 2021.