Economy falls in world ranking

Business NZ chief executive Phil O'Reilly said the Resource Management Act was holding the country back. File picture / Mark Mitchell

New Zealand's world competitiveness rating has fallen in the latest survey and the National Party says it is "a big warning sign" for the future.

While New Zealand fell from 16th to 22nd place, Australia moved up from ninth to sixth place in Swiss business school IMD's ratings for 61 national and regional economies.

National finance spokesman John Key said: "What's disturbing about this is that we are slipping behind relative to dozens of other countries while our biggest competitor for skills and capital -- Australia -- charges further ahead."

"This is more proof of why the Labour Government is turning out to be a slow-burning disaster for this country's economy, and therefore our future."

Mr Key said the ratings were based on 312 criteria and the section on New Zealand listed challenges facing the country as improving broadband, encouraging skilled migrants, ensuring secure and affordable energy and water, improving workplace productivity and reducing compliance costs.

Mr Key said he agreed all those issues were serious challenges.

"This is a big warning sign and shows we will never get into the top half of the OECD (Organisation for Economic Co-operation and Development) list of rich nations and that we are slipping behind even nations outside the rich club."

Mr Key said the latest tax cuts in Australia would further boost that country's competitiveness, and make it an even bigger magnet for talented Kiwis. Business NZ said the drop in the country's competitiveness rating should be a concern for all New Zealanders.

Chief Executive Phil O'Reilly said the results showed New Zealand doing well in some areas, including action to improve skills, but falling behind in other important areas. "If we want economic transformation, these finding are instructive," he said.

"In the 'economic performance' category, the drop in international trade and direct international investment has pushed us down from 15th place last year to 30th place in 2006."

He said there were also problems in the "infrastructure" category.

The report noted positive rankings in public spending on education, relatively low broadband costs, and pollution control, Mr O'Reilly said. "But for environmental laws and compliance, we score 61st out of 61. This is a loud wake-up call for the Resource Management Act."

However, Immigration Minister David Cunliffe - today launching a campaign to bring Kiwis home from Australia - said: "There's never been a better time to talk about the unique benefits of New Zealand.

"Our economy is among the world's best performers in recent years, unemployment is the lowest in the developed world and we have a reputation for world class business innovation.''

- NZPA