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Economic Challenges and Opportunities: Insights from the Paymark Strategic Forum

On June 22, 2011, Roger Kerr addressed the Paymark Strategic Forum, focusing on the international economic backdrop marked by challenges such as the global financial crisis, old OECD troubles, and emerging economies' rise. He examined Australia’s influence on New Zealand, the impact of the Christchurch earthquakes, and stagnant per capita real GDP growth since 2004. Key issues discussed included the rebalancing of the economy, the need for lifting productivity growth, and implications for the payments industry, emphasizing policy changes towards a competitive business environment to ensure sustainable growth.

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Economic Challenges and Opportunities: Insights from the Paymark Strategic Forum

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  1. Paymark Strategic Forum Roger Kerr 22 June 2011

  2. International backdrop • ‘Old’ OECD in deep trouble • GFC • Debt crises • Offset by rise of emerging economies • Australia

  3. Effects on New Zealand • Recession and GFC • Christchurch earthquakes • High terms of trade • Exchange rate headwinds but favourable vis-à-vis Australia • Longer-term perspective

  4. Per capita real GDP ...has shown no growth since the start of 2004…If average growth over the past six years had been the same as that of the preceding 15 years, per capita incomes would be 11% higher now.

  5. Tradable and non-tradable output ...with tradable value-add falling 10% since 2004, taking it back to 2002 levels, while non-tradable value-add, especially government, continued to grow.

  6. Key challenges • Rebalancing of the economy • Lifting productivity growth

  7. Implications for payments industry • 4% pa growth to 2025 → economy 70% larger 2% pa growth to 2025 → economy 30% larger • Risks: shocks, bad policy, out-migration • Management talent and skills

  8. Policy implications • Institutions and policies matter • Smaller government: spending, regulation, ownership • Free, competitive business environment • Policies to promote efficiency in all sectors

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