Finance Minister Bill English has hit back at a report showing New Zealand's economic competitiveness slipping for the second year in a row.
The Labour Party says the Government's decision to scrap research and development tax credits for firms is partly to blame.
The World Economic Forum ranks New Zealand the 25th most competitive out of 142 countries, sliding from 20th two years ago.
The report ranges from the education system to transport infrastructure and firms' investment in research and development.
Mr English says he is bemused by the findings from the Geneva-based think-tank. He believes competitiveness is getting better, although there is still room for improvement.
But Labour finance spokesperson David Cunliffe says the Government is relying too heavily on booming agricultural prices.
Mr Cunliffe says restoring tax credits for research and development would boost competitiveness in other areas of the economy.
The report again ranked Switzerland as the most competitive country, followed by Singapore and Sweden.
New Zealand scores well for health, education, political stability, crime and corruption, but inadequate infrastructure, access to finance and inefficient government bureaucracy are cited as the most problematic factors for doing business.
The United States fell from fourth to fifth place, while Australia slipped four places to 20th.
