Commerce Commission needs more firepower to boost competition and wages - economist
Cameron Bagrie says he doesn't see any political party attempting to address the cost of living and low wages by creating more competition.
An economist argues that the Commerce Commission needs more power to address competition and wage issues in New Zealand. Unemployment has reached an 11-year high, with 171,000 people currently out of work, according to the latest data. Labour is viewed as the most trusted party to manage the economy, according to the latest Ipsos Issues Monitor.
However, Cameron Bagrie, a leading economist at Bagrie Economics, does not see any political parties addressing the cost of living and low wages by increasing competition. Bagrie believes the economy took a hit in the second quarter due to higher fuel prices, and the numbers were not impressive. He suggests that competition policy is necessary to tackle both the cost of living and wage crises.
Bagrie argues that wages are lower in New Zealand compared to overseas counterparts, but competition across sectors and industries can drive down costs and promote innovation and productivity growth. He believes the Commerce Commission needs to be more aggressive in promoting competition, by being independent, having a charter, and a specific target of achieving inflation between 1 to 3 percent.
Bagrie acknowledges that the economy is transitioning towards business investment, productivity growth, and natural resources, but he emphasizes that this transition takes time to deliver. He stresses the importance of getting infrastructure, education, research and development, and the banking system right to ensure long-term economic growth.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
