Finance Minister Steven Joyce has welcomed the OECD’s latest review of the New Zealand economy as outlined in a report released today.
“The 2017 OECD Survey of New Zealand notes New Zealand’s strong economic growth off the back of a booming tourism market, strong net inward migration, solid construction activity and supportive monetary policy,” Mr Joyce says.
The report is also positive about New Zealand’s sound fiscal position with low public debt and a balanced budget.
“The report highlights that New Zealand outperforms most OECD economies in regards to our standard of living, health status, the quality of our education system and our overall environmental quality.
It shows that New Zealand’s labour market is performing strongly with high levels of employment and relatively strong real wage growth since the Global Financial Crisis. New Zealand also has one of the lowest gender pay gaps in the whole of the OECD.”
The OECD makes recommendations under three key themes, making growth more sustainable and greener, improving productivity, and adapting to the changing labour market.
“The report is consistent with the government’s economic policy direction, with our strong focus through the Business Growth Agenda on increasing our international connections, encouraging more international investment, improving environmental outcomes, lifting the level of business research and development, and training young people in the skills needed for the modern world, especially in fields like engineering and ICT.”
“One of the OECD’s recommendations is adding debt-to-income limits to the Reserve Bank’s macro-prudential toolkit with attention to satisfying a cost benefit analysis,” Mr Joyce says. “Last week the Reserve Bank released its consultation document on that proposal, and I am looking forward seeing the responses to it.”
The OECD also recommend bringing forward the age of eligibility for Superannuation increase, lengthening the transition period, and indexing the pension age to life expectancy.
“The Government is confident its existing plans for adjusting superannuation policy strike the right balance between ensuring sustainability of the scheme and providing time for current generations of working New Zealanders to respond to any change.”
Mr Joyce said the OECD report will be helpful in assisting New Zealand policymakers to respond to current and emerging economic issues.
“It is always good to have our thinking tested by international agencies like the OECD. While we don’t always agree with the OECD’s proposed policy response, it is encouraging to see that government agencies and the OECD broadly aligned on the future opportunities and challenges facing the New Zealand economy.”