Call centres and cigarettes not the future we want

National’s promise to close the wage gap with Australia has come to nothing, with Kiwis now  rolling cigarettes for our Tasman neighbour, Labour’s Finance spokesperson David Parker says.

“Labour does not want New Zealand to become Australia’s Mexico, yet with lower value jobs such as making cigarettes that is exactly what is happening.

“Bill English has been misdirecting his energy on praising the advantages of low wages to attract Australian jobs rather than coming up with real ideas to grow the economy.

“There are record numbers of Kiwis leaving for Australia. They are not going so they can work in call centres or cigarette-making factories,” David Parker said.

“National made closing the wage gap a key election pledge in 2008. It now wants to attract investment to New Zealand on the basis of cheap wages.

“The structural problems in the New Zealand economy require structural solutions. However the government is fixated on reducing the government deficit, which it helped create in the first place with unaffordable tax cuts weighted to those in the top income bracket.

“Fixing the government deficit is necessary - and would have been achieved by Labour - but National’s almost singular focus on it leaves our other problems unsolved.

“Under the current government’s settings, the deficit or gap between the value of our exports and the cost of our imports and interest bill is set to grow. New Zealand will continue to get poorer.

“Every year New Zealand goes backwards through that current account deficit, which is funded through more overseas debt and the sale of New Zealand assets to foreigners,” David Parker said.

He said Labour’s policies, which National has rejected, would help our exporters and lead to the higher value jobs we need. They include:

• Universal work based savings to deepen our capital markets and reduce our interest rates – like in Australia
• Broadening the objectives of the Reserve Bank to explicitly recognise the interest of our exporters  - like in Australia
• Changing the membership of the Reserve Bank board so that more board members have export interests to the fore would also help – like in Australia
• Pro-growth tax reform via a capital gains tax to reduce the tax bias which currently favours speculative investment in property to the detriment of the export sector  - like in Australia
• A research and development tax credit to stimulate investment in the productive rather than speculative economy – like in Australia.