HYEFU Dismal on Jobs
CTU Media Release
18 December 2012
HYEFU Dismal on Jobs
The Council of Trade Unions says that the half- yearly economic and fiscal update (HYEFU) is dismal on the jobs front.
Council of Trade Unions (CTU) Secretary Peter Conway said that the forecast is for unemployment to average just under 6 percent for the next 5 years.
“That is not a recovery”, says Peter Conway.
Economic management by the Government should not just be about achieving a surplus in 2015. The increase in petrol excise tax announced today just ahead of the HYEFU release is clearly designed to reach that surplus target and is further evidence that this is the sole focus of the Government.
“But a crucial measure of economic management is the availability of jobs. In New Zealand we have 175,000 people who are unemployed and 113,000 workers seeking additional hours. This needs to be the Government’s top priority for 2013”.
The forecast means that we will still have around 150,000 people out of work every year until 2018. And these forecasts have tended to understate unemployment levels rather than the reverse. We also note that although all countries have seen unemployment rise since the global financial crisis, New Zealand has gone from a top performer within the OECD in most of the last decade in relation to unemployment levels to be ranked 15th now. This is a sign that the New Zealand Government has simply not made jobs a priority. The tax changes in 2009 and 2010 which benefitted those on high incomes have also had a negative effect on tax revenue which could have been used to assist low income families and promote job opportunities.
Peter Conway said “high levels of unemployment are also predicted by Treasury to impact negatively on wage growth with nominal wage increases averaging only 2.5 percent over the forecast period.”
“The signs are not good in the HYEFU”, says Peter Conway. “The growth forecast from May this year has been scaled back. Transport costs for households and firms rise. The current account deficit spirals up. The reluctance to adopt policies that would stimulate job creation and lift economic performance means the Government will continue to focus on reducing Government expenditure as a percentage of GDP. The Government is also relying on up to $7 billion from asset sales in its budget projections”.
The HYEFU shows that the outlook for households for the next couple of years is negative.
The New Year resolutions for John Key and Bill English have to be ‘must do better on the jobs front’.