No magic bullet to lift economy

The Government's main role is to keep looking out over the next five years or so and put in place policies that will help the economy become more competitive and productive – through good times and through bad. Again, the European crisis offers some important lessons.

Here in New Zealand we have also lost competitiveness over time, particularly as a result of poor policy decisions in the 2000s. In other words, it has got harder than it would otherwise have been for our exporters to compete in overseas markets. And it has got harder than it would otherwise have been for New Zealand manufacturers to compete with imported goods made offshore.

As a result, the industries and sectors that compete internationally actually went into recession in late 2004 and shrank in size by almost 10% in five years.

That decline in competitiveness began to turn around during the past three years.

The Government's view has always been there is no magic bullet – no one 'big bang' reform that would turn the economy on its head.

What is required is a series of good policy decisions and reforms over an extended time, in 100 different areas, to enhance the competitiveness of New Zealand firms. So we have a busy economic reform agenda, following through things we started last term and on new things we announced during the election.

For example:

We're rolling out ultra-fast broadband and the Rural Broadband Initiative, to lift New Zealand's connectivity.

We're introducing a six-month limit for granting consent to medium-sized projects under the RMA, to reduce costs, uncertainties and delays.

We're negotiating free trade agreements with nine countries in the Trans-Pacific Partnership, including the United States, and separately with a number of other countries including India, Russia and Korea.

I have tasked Bill English and Steven Joyce – the two most senior economic ministers – with driving this economic action plan. I have told them I want to see this action plan regularly updated.

The first update will be in the middle of this year.