CTU MEDIA RELEASE 19 December 2008

PTA removal of full employment and equity a worrying signal

Council of Trade Unions Economist Peter Conway says that the removal of full employment and equitable distribution of income as objectives in the Policy Targets Agreement is a worrying sign, and has called on Finance Minister to explain the move.

The Reserve Bank Governor and the Minister of Finance today released a revised Policy Targets Agreement, a document that sets out how the Reserve Bank will deliver price stability.

"Clearly there will be further job losses in the next 12 months," Peter Conway said. "But this should in no way remove the importance of the goal of full employment."

"The government has stressed its commitment to supporting New Zealanders facing harder times and there is a risk that the removal of a long term commitment to full employment is seen to be at odds with that stance".

"We know also that the tax changes implemented under urgency last week, actually put up taxes on those on low incomes compared with what was to apply from Budget 2008 legislation. Now we have a Policy Targets Agreement that removes any reference to equitable distribution of income. This is an unfortunate development."

Peter Conway said that he realises that the PTA is not a full statement of Government policy.

"However it does send a signal about priorities and that is why we are concerned."

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