One reason why we are so keen to have policies introduced in New Zealand that encourage growth, and productivity growth in particular, is our concern at New Zealand's relatively low wage rates. we have to get our rates much higher if we are going to keep our indigenous talent here, and attract the best people from around the world. Only a greatly improved productivity growth performance will allow us to have greatly improved wage levels. Unfortunately, the policies of the last few years have seen a poor productivity performance in New Zealand relative to others in the OECD. Our OECD per capita wealth ranking is almost identical to our productivity growth ranking - surprise surprise.
The second half of Brian Fallow's opinion piece this morning should send a shiver of fear through policy makers in Wellington and cause a renewed focus on productivity growth.
And in that respect there is a large time bomb ticking very loudly.
New Zealand is not the only country staring down the barrel of declining growth in the labour force when the baby boomers start retiring and have to be replaced from the significantly thinner ranks of Generation Y.
A scary presentation by Bernard Salt from KPMG in Australia at the Australia New Zealand Leadership Forum two weeks ago showed that early in the next decade growth in the labour force is about to lurch lower in both Australia and the United States.
Both countries are a whole lot richer than we are and better placed to compete for immigrants (including Kiwis) in an era of labour mobility.
That may be particularly true for those drawn from the footloose Generation Y for whom instant gratification takes too long. If the baby boom generation had invented the teenager, Salt said, generation Y had extended adolescence until the late 20s.
