The government has set the goal of returning GDP per person to the top half of the OECD, a spot last occupied in the mid-1960s. In the past four decades, per-capita incomes have fallen from well above to about 12 per cent below the OECD average1 (Figure 1). Low labour productivity is the main explanation of this income shortfall, as employment rates and hours worked are relatively high when compared with other countries (Figure 2). The key economic challenge is therefore to boost productivity growth by enough to begin climbing the OECD ladder. But the country faces other challenges as well. While the performance of the labour market has been impressive, employment rates are still 5-10 percentage points shy of the OECD’s star performers. Lifting employment rates to their levels would go a third of the way to achieving the government’s goal...