About the 2025 Taskforce
In 1974, New Zealanders' incomes were roughly equal to those of Australians . Since then, the wage gap has opened up to the point that Australians now earn on average 30.5% more than New Zealanders.
As part of the Confidence and Supply agreement between the National and ACT parties reached immediately after the 2008 election, the Government committed to closing the income gap with Australia by 2025 and to establishing an advisory group both to report annually on progress towards achieving that goal and to make recommendations about how best to achieve it. As a result, the 2025 Taskforce was set up by Government in July 2009.
The challenge is huge : New Zealand's per-capita gross domestic product must grow 1.8 percent per annum faster than Australia's for 16 years to achieve that goal. The ready reckoner graphically shows how large the challenge is, and how it will get much larger if we don't make progress fast.
Closing the gap is vitally important. It will not only increase our material well being, but also allow us to have better educational institutions and better health facilities. It will enable us to increase investment in public amenities, including among other things, infrastructure and public spaces. It means a more vibrant, interesting country to live in, and wider opportunities for New Zealanders and their families.
The benchmark against Australia is important for a number of reasons. First, it gives us a clear target to aim for. We can measure the income gap with Australia over time and the Taskforce can report on progress towards this goal. Second, there are very few barriers to New Zealanders leaving to live in Australia. A growing income gap between our two countries increases the incentives on talented New Zealanders to make the jump across the Tasman. If the income gap narrows, it increases the likelihood of New Zealanders choosing to stay in New Zealand, those living abroad to return, and potential migrants choosing New Zealand over Australia.
The Taskforce, chaired by Dr Don Brash, has been appointed for an initial term of three years. Other Taskforce members are Dr Bryce Wilkinson, Judith Sloan, Jeremy Moon, and David Caygill. All members have been appointed until 30 June 2012.
