Prime Minister John Key has put New Zealand in the third division of world economies, ranking it alongside basket cases such as Greece.
Speaking to a business audience in Wellington on Wednesday, Mr Key said New Zealand must address its poor productivity growth, which he described as the fundamental problem facing the economy.
He outlined six policy areas the Government will focus on to pull New Zealand back up the economic league tables. They are regulatory reform, infrastructure investment, better public services, education and skills, innovation and a world-class tax system.
Mr Key says the tradable sector of the economy, which includes agriculture, tourism, forestry and manufacturing, has effectively been in recession for five years.
"Our productivity is already low by comparison with other developed countries and in recent years has been growing much slower than most other countries," he told the business audience.
Mr Key used the speech to pull together the policy threads of the Government's long-term economic plan, but did not announce any new initiatives.
Labour Party leader Phil Goff says the speech shows the Government does not have a comprehensive plan for the economy, and has no fresh ideas to tackle rising unemployment.
Mr Goff says unemployment is currently rising by several thousand a week, and the speech contained no fresh ideas to tackle the economy's problems.