Treasury predicts high joblessness to last longer

16 December 2009
Media Statement

Treasury predicts high joblessness set to last longer

Treasury predictions that unemployment will remain high for longer than expected provides worrying confirmation that National still has no plan to help Kiwis who have suffered most in the recession, says Labour Finance spokesperson David Cunliffe.

“Treasury is now predicting that 8000 more Kiwis --- a total of 139,000 --- are likely to be still unemployed by 2013,” David Cunliffe said.

“Fears for these Kiwis are reinforced by the fact that fiscal policy will cease being expansionary next year, and will, in fact, begin to contract from 2012. That makes it more likely that under National New Zealand is building a new class of long-term unemployed.”

David Cunliffe said the International Labour Organisation at the United Nations had warned just last week that prematurely withdrawing national economic stimulus packages could delay jobs recovery for years.

“It seems increasingly likely that that is what will happen in New Zealand. Not only has National failed to offer a long-term plan for New Zealand’s recovery, but when its half-hearted stimulus package comes to a premature end, tens of thousands of Kiwis will be left at real risk.

“As the ILO says, the economic upturn globally will remain both fragile and incomplete as long as the jobs crisis continues,” David Cunliffe said.

“In New Zealand we might like to think that warning doesn’t apply to us. In fact, Prime Minister John Key boasted this morning of light at the end of the tunnel, and about how New Zealanders can feel more confidence they will keep their jobs.

“What Treasury is saying directly contradicts Mr Key. National has never had a coherent plan for the future. That lack of plan is becoming more and exposed.

“Kiwis who have lost their jobs, or had their hours of work reduced, or had their pay frozen while the cost of living has gone up, need to feel they are going to be part of the better times ahead.

“But building a strong and sustainable future for New Zealand means appropriate investment in research and development, innovation and skills.

“These are the real drivers of improved productivity, and the real recipe for a recovery that brings all Kiwis along, but National provides no evidence it even begins to understand that.”

ENDS