Introduction

New Zealand’s economy currently depends significantly on the success of a handful of sectors. The economy is arguably too dependent on commoditised primary sector exports and low-value services. In the future New Zealand’s economy is likely to require a different approach. Three reasons in particular suggest the need for a reassessment:

  • The current approach is unlikely to be sustainable. New Zealand’s economy may soon reach the limits of its potential under its current direction.

  • The current approach can be unfair. There appear to be few incentives to share economic gains and encourage broad economic participation, potentially leaving some New Zealanders worse off.

  • The current approach may not be fit-for-purpose. The New Zealand economy is likely to face new, complex challenges in future, and policy frameworks will need to respond to these challenges.

Economic policy cannot be divorced from wider social values. There is a growing belief that aspects of current economy policy risk promoting higher inequality and this is forecast to worsen in the coming decades. This can deny opportunities for meaningful economic and social participation, erode common values and discourage shared investment in New Zealand’s economic and social future. An economic development policy that looks beyond growth for its own sake can help promote demonstrable social mobility to enable a fairer, more decent society.   

 

Addressing these economic development policy challenges is a crucial part of preparing for the future of work. A resilient, flexible economy must have a resilient, flexible workforce; and vice versa. Workers will benefit under improved economic settings through the creation of new and better employment opportunities, the potential for fairer, more sustainable wages, and the development of higher value skills that are in demand internationally. A key benefit of a step change in economic development will be the social and economic benefits that come from ongoing, meaningful employment.  

This paper looks at these challenges under four headings. It examines how New Zealand can go about growing a more diverse economy that continues to perform in the face of a range of economic challenges. In turn this involves a deliberate strategy to target world-class innovation and commercialisation to unlock the high-growth, high-value potential of New Zealand business in key economic sectors. It would also promote stable and predictable economic policy to set a platform for sustainable, broad-based economic growth over the long term. To ensure sustainability it will need to include a plan for managing climate change and building a low-carbon economy.

This is one of six papers being produced as part of Labour’s Future of Work Commission.  The others cover Technology, Education and Training, the Māori and Pasifika workforces, and Security of Income and Work.

These papers are designed to stimulate discussion and generate ideas for policies to achieve the objectives of the Future of Work Commission:

  • Decent Work

  • Lower Unemployment

  • Higher Wages

  • Greater Economic Security

  • High-Skilled, Resilient Workers

The Future of Work Commission seeks to ensure New Zealanders can confidently face the changing nature of work and have sustainable, fulfilling and well-paid employment in the coming decades.