2013 Treasury Schools Challenge Task
Page updated 14 March 2013
Context
Measured by average GDP per capita growth, New Zealand's economic performance over the past six decades has been lower than all other OECD countries. New Zealand's GDP per capita ranked third among OECD countries in 1950 and 22nd in 2009 (of 34 OECD member countries).
In order to improve New Zealand's relative living standards we need to materially narrow the income gap between New Zealand and the most advanced economies. This is a big challenge and an important one for all New Zealanders.
Your task
You are a group of analysts working for The Treasury. The Minister of Finance has asked for your advice about what the government should to do raise New Zealand’s long-term economic growth rate.
In a 2,000-word-maximum paper for the Minister of Finance, your job is to make recommendations about which policies you think should be implemented by the government to raise New Zealand’s long-term economic growth.
Below is a list of policies which might act as idea starters for you. These ideas aren’t necessarily what we think are the “right” answers; they are simply ideas for you to consider. Whether you recommend some of the policies below or come up with other options is up to up to you. You just need to choose the ideas that you think will make the most difference to New Zealand’s long-term growth and explain why you think those policies would work and what the impacts of those policies would be (positive and negative).
Examples of policy areas that you might consider are:
Policy area |
Some examples.... |
|---|---|
Tax |
Introduce a flat-rate tax for all personal and corporate tax. |
Innovation and Infrastructure |
Increased investment in New Zealand’s Internet technology industry. |
Education |
Compulsory early childhood education |
Savings |
Introduce compulsory savings |
Trade and international connections |
Greater economic integration with Australia. |
Immigration |
Focus immigration policy on tertiary-educated applicants |
In making your recommendations, consider The Treasury’s Living Standards Framework. The framework will help you to identify the range of effects that a policy may have. You will be partially judged on how well you consider other effects of your policies (i.e. a policy might be good for growth, but what other impacts might it have).
You may wish to consider the fundamental constraints on New Zealand’s economic growth and justify policy recommendations in terms of how they might deal with these long-term constraints.
Remember that Treasury has a diverse range of staff, from political scientists to biologists. You may wish to include in your group people who study other subjects and not just economics.
There are no right or wrong answers in this challenge. And creative ideas are welcome! Whatever you recommend though you need to demonstrate that you understand how your policy recommendations may affect growth and provide analysis about why you think your ideas are the right ones. We are looking for good quality policy analysis, not “right” answers.
Accompanying this task sheet you will find a resource package, which lists various papers, reports and books which you might find useful background reading for this task.
