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- #21,621
In NZ, borrowing costs for businesses have historically been 1-3% higher than in Australia, the US, Asia or Europe.
When the cost of capital is high:
Over time these choices accumulate leading to smaller businesses paying lower wages and a lower GDP per person.
Govts need to sort out our persistently high (relative) interest rates to make NZ strong and productive. Arguably the biggest structural change we could make for our collective future.
When the cost of capital is high:
- Fewer firms invest in new tech
- Expansion is delayed
- Productivity-boosting projects are shelved
- Replacement of old equipment happens slower
Over time these choices accumulate leading to smaller businesses paying lower wages and a lower GDP per person.
Govts need to sort out our persistently high (relative) interest rates to make NZ strong and productive. Arguably the biggest structural change we could make for our collective future.
