It is commonly believed that NZ is a low wage economy compared with Australia. Lets assume that’s true, even when adjustments are made for the cost of living. How do we close the gap? The last government said we needed economic “transformation”; this government says its all about “productivity”. But neither of these terms mean much to ordinary voting folk unless some of the benefits flow through into wages.
The size of the pie matters of course, when thinking about how it is shared. So thanks should go to the nice people at Grant Thornton who have compared (pdf) the market performance of groups of companies in NZ and Australia. The sample is biased by being bourse-bound (listed firms) but is still interesting.
Here are the rates of return on assets over the 5 years to September:
Notice that for industries supplying many of the essentials of life in NZ, the rates of return are much higher in NZ than Australia: food, building products, telecommunications, construction materials, airfreight & logistics. Further digging required.