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Business Hawke's Bay

Low incomes in Hawke's Bay are because the region amplifies New Zealand's "productivity paradox", says Productivity Commission economist Patrick Nolan.

On paper New Zealand looks like it should be more productive than it is because of plentiful resources, a skilled workforce and good business environment, he said.

"If you look at our resources and our policy settings we should do a lot better than we do," he said.

"It is very easy to set up a business here and we have a very skilled labour force - we do quite well in terms of when people come out of school, yet we have relatively low incomes.

"The OECD has estimated our GDP per person at about $30,000. The OECD average is about $37,000.

"Based on our policy settings we should be about 20 per cent above the average - we should be on about $43,000 per person. So we are about 20 per cent below the OECD average for incomes when we should be 20 per cent above. This is a real puzzle."


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