Govt Admits It Is Comfortable With Unemployment Numbers

The Government admitted today for the first time that unemployment at present levels is a deliberate part of its economic policy, Labour leader Phil Goff said.

“In a revealing interview today on television, Finance Minister Bill English said the current number of 159,000 unemployed New Zealanders was ‘part of the Government’s rebalancing story’,” Phil Goff said.

“Mr English said that this number of people being unemployed was not ’brutal at all’.

“That is an extraordinary admission. While the recession is responsible for some of the rise in unemployment, Mr English has made it clear that government policies have also contributed to rising unemployment and will continue to do so.

“Mr English has come closer than any minister so far to admitting that for this government the present high rate of unemployment – at 6.8 per cent – is a choice.

“I would like to know if Prime Minister John Key shares his finance minister’s economic prescription for New Zealand.

“Bill English also said he did not expect the Government’s ‘tax switch’ on October 1 to help matters. He said he expected most people to use their tax cuts to pay off debt, not to boost local demand.

“That is not good news for retailers or the hospitality industry or other small business owner who supply them, and who create jobs. Many are struggling to stay afloat and keep staff on as it is.

“They will be hit by a double whammy. GST increasing to 15 per cent on October 1 will also put a brake on their businesses.

“New Zealanders were told to expect a recovery by now. They are looking for clues from John Key and his government about where it will come from. But that is not happening – the economic plan is simply not there.

“Talk about rebalancing the economy towards the export sector is one thing. It is another to make low and middle income New Zealanders pay for it as National is doing.

“ ’Rebalancing’ apparently means giving one third of the October 1 tax cuts to the top 5 per cent of earners, by definition those who are the most well off.

“It will be those in the middle and particularly those at the bottom of the income scale who will feel the pain. They will struggle to make ends meet.

“There are other, much fairer ways to grow New Zealand’s economy, which Labour is working on. That includes a plan for upskilling New Zealanders, and investing in R&D to grow jobs in areas like ‘clean tech’, which is the fastest growing area in the world economy.

“National’s weak position on savings was also exposed again today. The chief executive of the consistently well-performing NZ Superannuation Fund reiterated on Q&A his disappointment at National’s decision last year to cease contributions to the Super Fund.

“Adrian Orr said governments can borrow money at the lowest interest rate possible and so it made sense to borrow at low rates to save, particularly during a recession when there is no shortage of global companies whose value has dropped and whose shares can be bought at bargain level prices.

“These savings would also allow investment in growing New Zealand’s economy and keeping it in New Zealand’s hands,” Phil Goff said.

“National has an awful track record including cutting Kiwisaver. It’s policies are costing New Zealand dearly ,” Phil Goff said.”

ENDS

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