According to statistics, per capita income in Australia is about a third higher than in NZ, compared to the early 1970s when the figures were about the same. Needless to say this has been a cause of political debate between the two main parties, not to mention the exodus of New Zealanders heading to Australia, about 35,000 a year. A significant part of this difference on paper is, of course, due to the movement of the $A /$NZ exchange rate in that time - in the 1970s the rate was close to 1 for 1, now it is more like 1.27 to 1.
The Governor of the Reserve Bank says that Australia's good fortune is due in large part to its mineral wealth which lies easily accessible in areas where no-one will complain if it is strip-mined. This is certainly the case. One major resource which Australia is short of, however, and New Zealand is not, is water. Add to that a hostile climate (and a lot of hostile fauna!) except in the coastal areas where the big cities are located, the overall low population density and a high bureaucratic cost structure (caused in no small part by the unnecessary existance of the States) and there are downsides to Australia too.
Basically, you don't get your cake and eat it too.
This doesn't mean, however, that New Zealand can't improve its productivity - it needs to. The Government needs to dismember Telecom as a matter of priority (see previous post) as well as remove much petty bureaucracy of central government, and lower GST back to 10% to match Australia, not increase it. The objective is not to work harder, but smarter.