Search the site by keyword

Productivity matters for wellbeing and requires a long-term commitment

Tane Mahuta Kauri
3 July 2023

The New Zealand Productivity Commission Te Kōmihana Whai Hua o Aotearoa (the Commission) has released its latest Productivity by the numbers report today. 

The report shows little change in the trend for Aotearoa New Zealand’s economic productivity. New Zealand’s economy has gone from being one of the most productive to one of the least productive in the OECD. Working more hours and putting more people into work has been the main way that production and income have grown over the last decades. 

Productivity Commission Chair, Dr Ganesh Nana notes, “the numbers show that the productivity record of Aotearoa New Zealand leaves a lot to be desired. 

“New Zealand has a relatively defensible record in producing more goods and services. But this has come from delivering more goods and services through more New Zealanders working more hours. 

“This is not a recipe for sustained improvements in material living standards, let alone those non-material aspects of family time, leisure hours, and feeding the mind as well as the body,” says Dr Nana. 

In line with the Commission’s vision – productivity growth for maximum wellbeing, the report sends a strong message that productivity matters for wellbeing. Higher productivity enables investment in public goods and services that benefit everyone – schools, hospitals, and infrastructure. The gains from lifting productivity matters for individual and overall wellbeing, by increasing the nation’s incomes and our ability to produce and afford goods and services that underpin a happy and healthy life.  

Productivity requires a long-term commitment. Innovation and technological change, which require appropriate investment efforts are critical to productivity growth. Aotearoa New Zealand’s current productivity is built on decades of investment – in skills, knowledge, ICT, infrastructure, institutions, relationships, and the environment. The Government’s efforts need to be focused, aligned, well connected to businesses, iwi, Māori, researchers, and workers, and well evaluated, to enable learning and adaption. 

Dr Nana says, “improving productivity requires investments to maintain, enhance, and improve the capabilities and qualities of the range of productive factors, institutional arrangements, and resources on our watch.  

“As for any investment, this needs to be sustained and exercised over a longer term – across years, decades, and generations. 

“Investment efforts over the longer term are not only where further material rewards lie, they are also where enjoyment of better living standards and wellbeing across other dimensions can emanate from successfully lifting our productivity numbers. 

“The choices we make today influence the productivity and standard of living, waiora, and wairua tomorrow, and for future generations,” says Dr Nana.