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We want New Zealand to be Prosperous, and for that Prosperity to be Sustainable and Inclusive

The Treasury recognises that economic performance is more than economic growth. While we want the higher incomes and jobs that economic growth brings, we want that economic growth to bring prosperity that is sustainable and inclusive. It is important that New Zealand's economy supports higher living standards for this and future generations, and that all New Zealanders can play their role in the economy and society.

Prosperity

We want economic growth to bring New Zealand greater prosperity.

While New Zealand has significantly improved its economic performance since the early 1990s, income per person still lags behind the better performing advanced economies. Labour productivity (output per hour worked) is an overriding key driver of New Zealand’s lower incomes.

GDP per capita in OECD countries
Percent of the OECD average
GDP per capita in OECD countries Percent of the OECD average   .

There is a range of explanations for New Zealand's poor productivity performance. However, one of the key factors is New Zealand's small size and distance from international markets. Our geographical challenges do not mean New Zealanders should lower their aspirations. Instead, it means a greater focus on how New Zealand plays its role in a globalising and changing world.

The Treasury thinks that we have to work harder at connecting internationally. International connections are the key to lifting New Zealand's productivity and economic growth and narrowing the gap. A productive economy attracts international flows of goods and services, people, capital and ideas. International connections boost productivity by bringing scale, competition, investment and ideas.

Key indicators of prosperity:

  • Higher incomes per person (measured by gross domestic product [GDP] per capita).
  • Increased labour productivity per person.
  • Greater levels of international connectedness measured through flow of people, capital, skills and knowledge.
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