New Zealand's unemployment rate rose to 5.6 percent in the June 2026 quarter, the highest level in 11 years, as economist Cameron Bagrie urged greater powers for the Commerce Commission to drive competition and support higher wages.
Stats NZ data showed 171,000 people unemployed in the June quarter, up 7,000 from March. The underutilisation rate climbed to 13.8 percent.
Bagrie linked the figures to recent economic weakness. He said higher fuel prices contributed to the contraction.
The economist argued that competition policy remains too light touch. He called for the Commerce Commission to receive an independence charter and expanded tools.
“Competition policy in New Zealand is too light touch.” — Cameron Bagrie, Bagrie Economics (RNZ, 6 August 2026)
A three-part prescription
Bagrie proposed giving the regulator a target to keep inflation between 1 and 3 percent with full operational independence.
He said wages are low in New Zealand compared to overseas counterparts and that more competition would drive down costs while lifting innovation and productivity growth.
The Commission's own May 2026 State of Competition report found declining business dynamism and weak competitive pressure in utilities and financial services.
The OECD Employment Outlook 2026 found that real wages in New Zealand recorded the weakest growth among OECD countries over the five years to early 2026, sitting 6.4 percent below Q1 2021 levels. New Zealand and Australia were the only OECD members whose real wages remained near the trough of the cost-of-living crisis.
The gap in Commission powers
OECD analysis from 2024 recommended mandatory merger notification and powers to halt integration during investigations. These tools remain absent under current New Zealand settings.
Unlike regulators in the United Kingdom, Mexico, Iceland and Germany, the Commerce Commission lacks authority to impose structural or behavioural remedies following market investigations.
Bagrie described the economy shifting away from reliance on immigration, tourism and housing activity toward business investment and productivity.
No major political party has placed ambitious competition reform at the centre of its platform for addressing cost of living pressures.
Expanded remedial powers for the Commission could affect sectors such as groceries and personal banking already subject to prior market studies.
Any legislative changes would involve MBIE and Treasury input on compliance costs and productivity effects. The Minister of Commerce and Consumer Affairs and the Commerce Commission did not respond to requests for comment before publication.
