Hon Dr Michael Cullen
Minister of Finance

21 February 2008 Media Statement

Key’s denial on wages lacks credibility

John Key’s claim that when he said he wanted wages to drop in New Zealand he meant to say he wanted wages to drop in Australia defies belief, Finance Minister Michael Cullen said.

Despite regulary telling national media that he would raise wages in office, John Key told a Northland business audience that he “…would love to see wages drop.”

“Observors would have to suspend a great deal of judgement and intelligence to see credibility in Mr Key’s non-denial denial,” Dr Cullen said.

“The truth is that Mr Key was making a case that wage growth should occur only after productivity growth. Linking wage rises to productivity gains is fair politics, but saying you want wages to drop to control inflation is not a view supported by the Labour-led government.

“If Mr Key was talking about Australian wages, what did he mean when he said:

“We really want to drive that out.”

“Mr Key was saying that wage rises given to low-income workers are dangerous and inflationary. This is not a surprise given his opposition to the Labour-led government’s increases to the minimum wage and moves to boost the incomes of families with children.

“If Mr Key wants to have a debate on these issues we would welcome that. But we need Mr Key to start telling us what he actually believes instead of what he thinks we want to hear.”

Under the last National Government average real weekly earnings increased by a total of $1.31 a week in 1990 dollars over that 9-year period. Under 8 years of a Labour-led Government, the rate of increase has been 30 times that level.

ENDS

Key_on_wages.pdf

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