Cost Of Living: Quick Fixes vs Real Productivity

Economist Dr Oliver Hartwich, executive director of the New Zealand Initiative, unpacks why New Zealanders feel worse off than three years ago and whether any government deserves credit or blame for it. He traces the squeeze to COVID-era money printing, the Reserve Bank's subsequent engineered recession, and global shocks like the Iran war disrupting fuel and supply chains, arguing these were largely outside any government's control.

Hartwich warns there is no quick fix to cost-of-living pressures, insisting real prosperity only comes through long-term productivity gains, such as education reforms, that take years or decades to flow through to wages and employment. He cautions against election-driven populist interventions like nationalising or restructuring supermarkets, arguing these ignore structural causes, risk damaging investor confidence in property rights, and may create more problems than they solve.

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