28 Feb 2023

NZ's economic resilience a leading concern - Productivity Commission

12:58 pm on 28 February 2023
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The Productivity Commission chair Ganesh Nana Photo:

Improving New Zealand's economic resilience has come into sharp focus in the face of ongoing supply chain disruptions.

The Productivity Commission Te Kōmihana Whai Hua o Aotearoa, has released an issues paper on its inquiry into improving the resilience of the country's economy, outlining its current thinking and highlighting policy challenges.

Economic resilience was a leading concern following the recent destruction of Cyclone Gabrielle, the paper said.

Commission chair Ganesh Nana said there had also been a "change in the global landscape" that affected resilience.

"[There has been a change] both in terms of the trading environment and whether it be market access to our export markets or whether it be access or availability of products coming towards New Zealand," he said.

The country had taken many of those supply chains for granted for some time, Nana said.

"There has been a lot of change in that environment and you superimpose on top of that the geopolitical environment which is becoming a lot more insecure and dare I say unfriendly to global trade."

The Covid-19 pandemic had also been an eye-opener for economic resilience.

"There were underlying the considerations that have been here for a while, but Covid has taken the wrapper off what we've taken for granted and made us think about whether resilience is a nice to have or whether resilience is something that we should perhaps put a bit more attention to, and think about how we can be more proactive in certain areas," Nana said.

The issues paper outlined the commission's thinking on supply chains and economic resilience in New Zealand and overseas, and highlighted policy challenges the inquiry should focus on.

"One of the challenges is around the distributional nature of resilience and when we look at it from an industry and sector perspective, recognising that many of our regions around the country are reliant on one or two industries or sectors," Nana said.

The commission worked with economists Brian Easton and David Skilling in developing the issues paper, with findings from their research published alongside the paper.

Public submissions on improving economic resilience are open until 17 April, with a final report to the government due February next year.

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