OECD’s policy broadside exposes NZ Parliamentarians’ frequent timidity
Thursday, 7 May 2026
OPINION: Diplomats are usually at pains to avoid commenting on the domestic policies of foreign governments.
But the Paris-based Organisation for Economic Cooperation and Development has no such inhibitions.
Although its day job is collecting statistics and economic forecasting, it has appeared to use its biennial reports into the New Zealand economy as a bit of a policy playground.
Over the years, its more radical advice — radical in New Zealand if not in Paris — has included urging the Government to comprehensively tax gains on property and shares, a suggestion the late Sir Michael Cullen dismissed at the time as “economic suicide”.
Read more:
Nicola Willis agrees NZ superannuation settings must change after OECD warning
Grant Robertson rejects OECD warning NZ Super age must rise from 65
In 2024, it suggested the Government might be better off breaking up some big businesses — specifically including Foodstuffs and Woolworths — to improve competition and increase lagging productivity.
But it has perhaps outdone itself in a report it issued on Thursday, in the breadth and depth of its policy reckons.
Advice included raising the age of eligibility and partly means-testing NZ Super, following many countries in implementing something akin to a capacity market to encourage more investment in firming generation, and requiring the big power firms to cut their dividends.
“Wholesale power prices — once among the lowest in the OECD — are now high by international standards, especially compared with other renewables-rich countries like the Nordics,” director Luiz de Mello said.
Other advice included raising minimum and default KiwiSaver contributions, a new government-backed venture capital fund to make $5 million to $50m investments in growth businesses, and limiting the gentailer dividend pay-outs to 60% of the earnings.
There were calls for mandatory gender pay gap reporting, minimum quotas for women on boards, treating LNG as only a short-term option with a small scale import facility, the launch of an NZX-lite, and a “windfall tax” of 50% on capital gains from land rezoning.
Much of the report read more like an election manifesto from a new political party than an economic bulletin.
Nevertheless, Finance Minister Nicola Willis made very polite noises about the OECD’s takes at an event hosted by Treasury.
There was a degree of cherry-picking in her commentary.
She focused heavily, for example, on the opportunity the OECD saw for better applying technology in healthcare, while glossing over its more detailed prescriptions for electricity reforms and its suggestion the country treat EV uptake as a “strategic national priority”.
But, to be fair, she was pretty game talking about the big issues, going as far as to agree with the OECD that some sort of change to superannuation settings was needed.
Across the road from the Treasury, in Parliament, there often seems less appetite for frank conversations about big topics.
Tackled on that point, Willis defended National’s track record.
“On my side of the House, we have in very good faith endeavoured to understand what is driving New Zealand’s longer term productivity and cost-of-living challenges and that has involved detailed, complicated policy work,” she said.
She chose to reflect, reasonably enough, on the challenges involved in communicating the case for an LNG importation facility.
“You’re going to go back quite a few steps to understand why firming capacity matters, how it affects investment incentives and renewables, what that means for the future price of electricity.
“But on the other side of the House, I am of the view that what they specialise in is describing the problem and … not actually getting at what are the underlying drivers of ‘why this is a problem’.
“We had a classic example yesterday, when [Labour finance spokesperson] Barbara Edmonds put out a press release saying unemployment is bad. Not a single solution in that press release.”
In reality, the blame for the often flaky quality of a lot of policy discourse in Parliament could perhaps be laid at the door of both major parties.
Debate on the electricity market in the House often can’t progress for more than a couple of minutes without ministers repeating the dubious claim that most ills are the result of the former government banning new offshore oil and gas exploration permits.
Meanwhile, serious discussion of tax reform is effectively a taboo subject for Labour, after it settled, behind closed doors, on its own minimalistic agenda.
Such are its sensitivities that after its revenue spokesperson Deborah Russell made some cautious remarks on the merits of proposals put forward by left-wing lobby Tax Justice Aotearoa, party leader Chris Hipkins appeared to choose to publicly criticise her for the order in which they appeared in a news report.
National’s invariably banal politicking on alternative tax policies (the “ute tax” label being a case in point) clearly doesn’t encourage frank discourse.
But Hipkins’ complicity completes the vicious cycle.
If we need to rely on unelected policy wonks from Paris to pop over every couple of years to shake things up a bit, that may be far better than little conversation at all.
The Treasury bangs its own drums on topics directly related to the country’s fiscal trajectory.
But in the absence of anything else quite as free-spirited, the OECD’s biennial reports are likely to continue to be a “can’t miss” event in the political calendar.