this post was submitted on 29 Nov 2023
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This is quite difficult to pin down.
When looking at productivity over time, the productivity over time stats; the increase in productivity aggregate is approx 1.4 between 1996 and 2022. This didn't make much sense to me until I looked at the definition of the index, the growth of 1.4 is normalized for inflation and wage growth because the labor cost is one of the inputs.
So we as a country have increased output by 140% between 1996 and 2022 over and above cost increase. This could easily be read as the wage growth lagging the productivity growth by around 1.3% per year.
There are a few other things that are going to happen over the next 30 odd years (in my opinion); mainly driven by climate change. A lot of money that currently flows out of the country will stop, oil will generally be supplanted by locally produced electricity (a large % of this money will stay in our economy), climate resilience will force us to prioritize local production.
I really wish that kiwis would prioritize local banking; billions flow out of the country every year that don't need to. Obviously we still need competition, but a few local banks could displace the foreign owned banks.
Basically what I am getting at is that our economy seems to export taxable money; if that money had stayed here tax could have been collected and fed back into our systems to increase what could have been provided; especially social housing and education spending.
This is structural. New Zealand has a really low level of domestic ownership of productive assets, and a corresponding obsession with an unproductive asset i.e real estate which creates our incredibly high levels of household debt (as you point out, mortgages are held by Australian banks).