New Zealand has improved its rank on the Global Competitiveness Index and extended the lead over Australia, in the World Economic Forum’s annual survey.
The country is now ranked 17th on the Global Competitiveness Index, up one place from last year when it broke into the top 20 for the first time. This is New Zealand’s highest position to date, and represents an overall improvement of eight places since 2012.
In contrast, Australia’s highly restrictive labour markets continued to drag on the country’s competitiveness ranking, which slipped one place to 22 – well short of the 15th position it occupied in 2009.
A change of government here would reduce labour market flexibility, making it more risky and expensive to employ people.
The damage a Labour/Green/New Zealand First/ Internet mana government would inflict on the country can be seen by the damage the Australian Labor government did there.
Dr Oliver Hartwich, Executive Director of the New Zealand Initiative – which helped compile the survey data – said the continued improvement reflected the strength of the country’s institutions and regulatory settings, particularly in the education, health and labour sectors.
“The investments that this country has made over time into things like the rule of law, property rights and flexible labour markets are paying dividends now, and the results can be seen in our high rate of GDP growth,” he said.
Hartwich said the report emphasised the need to continue investing in the factors that contributed most to business competitiveness, and not to take the complacent attitude to economic reform seen in Australia over the past few years.
“This country has huge economic opportunities sitting right on our doorstep with the emergence of Asian economies such as China, Indonesia and Malaysia onto the world stage,” he said.
“If we want to grasp these opportunities and improve the lives of everyday New Zealanders, we need to not only double down on the areas where we are strong, but also focus on where we are weakest, such as the quality of our business networks and infrastructure investment.”
Hartwich said a number of other factors could also boost the country’s competitiveness, such as unpicking the restrictions of foreign direct investment, freeing up capital for investment by tackling the housing affordability crisis, and reducing bureaucratic red tape.
The annual Global Competitiveness Report is compiled from 111 indicators, categorised into 12 pillars of competitiveness in four main sub-indices: basic requirements, efficiency enhancers, and innovation and sophistication factors.
The next most competitive countries were Switzerland, Singapore, United States, Finland, Germany, Japan, Hong Kong, Netherlands, United Kingdom, and Sweden.
The full report is here.
Competiveness matters for the health of existing businesses and the jobs which depend on them and for attracting new ones.