I’m no expert on, well, anything it seems, but my guess is that the very best thing a NZ government could for productivity would be to set the conditions that encourages capital inflow into NZ. Those things might be to somehow commit to not expropriating such investment such as by enshrining property rights, perhaps opening the doors to immigration to exploit what looks to me benefits from economies of scale, and to leave the production of private goods to the private sector. Paul Walker has pointed out the weak relationship between flavours of capitalism and performance, but at the margin privately-owned firms do more with any given bundle of resources – so get government out of there.

Unfortunately, virtually nobody in this great country thinks these ideas have any merit whatsoever, which is why I confidently predict NZ will not be be able to close the gap with Australia or anyone else: we will continue to have half the real income of Americans. Why isn’t that gaping chasm front and center?