Hon Steven Joyce
Minister for Economic Development

19 March 2014

Labour wants to go back to the 70s with NZ Economy

The Labour Party's desire to turn the clock back to the 1970s is once again highlighted with their grab-bag of ideas for the forestry industry, says Economic Development Minister Steven Joyce.

"Subsidised loans, expensive tax concessions, preferential treatment, and make-work schemes for young people are all a flashback to a time when governments decided which industries succeeded based solely on political whim rather than competitiveness,” Mr Joyce says.

“This is classic 70s ‘government knows best’ interventionism and we all know how badly that ended. What next, supplementary minimum prices for wood?

“Why should the forestry industry receive preferential treatment over the high tech manufacturing industry, ICT, the services industries, the construction industry or the farming industry? Or is it Labour's plan to provide subsidies for everyone so we can subsidise our way to success?

“About the only thing they have got right is suggesting a focus on innovation. However it's like they have been asleep since 2008 and now woken up 'Rip van Winkle' like to say we should do some innovation.

“While Labour has been asleep this Government has massively lifted its investment in innovation and helped grow private sector R & D across the economy by 23 per cent in just two years. Total government funding since 2010 for forestry-related science, research and product development alone amounts to over $160 million.

“The only sensible way to run a modern successful economy is to provide a strong macroeconomic base, supported by polices that lift the competitiveness of all firms. Our comprehensive Business Growth Agenda, which Labour has still not bothered itself to read, systematically improves access to markets, innovation, natural resources, capital, skills, and infrastructure.

“The results of our policies so far are reflected in strong growth, lowering unemployment, a much improved trade balance, stronger productivity growth, and real wages rising faster than the cost of living. Turning the clock back to the 70s is an amazingly out-of-touch response to some of the strongest economic data New Zealand has produced in many years.

“New Zealanders know they are just starting to see the positive results of five years of sensible modern economic policies and hard work by New Zealand companies. Turning the clock back 40 years would send New Zealand back to the bad old days of sluggish performance, high current account deficits, low productivity, and high inflation that the Labour Party knows so well.”

ENDS

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