For Immediate Release
FOUR DAY WEEK NOT ENOUGH

The proposed four day working week is a prudent step but not enough for an export led economic recovery according to the head of the Productive Economy Council, Selwyn Pellett.

"A four day week may ease the tax burden of supporting an increasingly high number of unemployed but it won't change our declining position within the OECD or help our exports become more competitive. We need more bold initiatives to get our best and brightest motivated to be more productive and create long term jobs in the process," he says. "An export led recovery is New Zealand's best chance for an early turn around and reducing the number of working days on its own is not going to get us there. Trade barriers will soon be the norm around the world and if our exports don't represent demonstrable value to end users then our products won't be on foreign shelves and an export lead recovery won’t be realised.

The PEC has announced three key issues that if addressed would immediately lead to sustainable job creation.

1. Introduce a Capital Expansion Fund for business with fixed interest rates for up to ten years. This Fund will provide qualifying businesses, access to money at housing rates to stimulate the counter cyclical investment the market conditions require." This fund could be administered in the same robust manor as current technology for business grants (TBG) says Pellett. We have significant Government infrastructure in place already so let’s leverage it.

2. Reduce the volatility of the exchange rate by looking at other monetary policy options beyond simply tying it to consumer inflation. The PEC believes that Singapore holds the best example for New Zealand in this regard and particularly favours the variability of contributions to their Central Provident Fund to dampen or stimulate the economy. Inflation can be dealt with by increasing savings via an expanded but compulsory Kiwi Saver says Pellett. We see this as the most attractive option as it deals with M2 issues of too much money in the economy and creates a significant private savings and investment environment that will flow on to capital markets.

3. Place a positive tax bias on business investment or remove the current tax bias towards housing investment. PEC is concerned that although we have no inflationary pressure at the moment low interest rates and low housing prices could ignite another round of housing inflation which could take the NZD back to 80 cents to the USD and again kill the productive sector. As we have seen with the Fisher and Paykel Appliances example no export business can plan for the volatility of the NZD that we have experienced in the past year.
“The PEC will be releasing data next week that will show New Zealand has become one of the most exposed export economies in the world," says Pellett.

Ends

The Productive Economy Council
The Productive Economy Council represents a growing community of people that wish to see New Zealand return to the upper end of the OECD in terms of GDP per capita It was founded by four of the former Trustees of the Hi Growth Project including: current President of the Hi Tech Association Wayne Norrie; former executive of the Hi Growth Project, Garth Biggs; Former Chairman of the Hi Tech Association and entrepreneur Selwyn Pellett; and APEC Business Advisory Council, Co-chair Technology & Information Working Group, John Blackham.

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