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Phil Goff Economic Policy Speech To CTU Conference

Labour Leader Phil Goff Economic Policy Speech To CTU Conference

Growing our economy for all New Zealanders


President Helen Kelly and Secretary Peter Conway, Parliamentary colleagues, delegates.

After three years things haven’t got better for most New Zealanders.

The cost of living has risen faster than at any time in the past 21 years.

And wages haven’t kept up.

Unemployment has persisted at high levels and among young people, the rate is at the highest level since the Great Depression.

The gap between the rich and the rest grows wider than ever and New Zealand is falling further behind Australia.

Under National, we have seen huge and unaffordable tax cuts going to those who earn the most, while the bulk of low and middle income New Zealanders have gone backwards.

And we have seen workers’ rights, government services and opportunities for jobs and training retreat just as fast.

So today I want to talk to you about what the next Labour Government will do as a priority.

Because families are finding it tough to make ends meet, because prices are rising faster than wages, we need first to put more money into people’s pockets. Shortly I’ll explain how we will do that.


And second we need a plan to grow the New Zealand economy so that it creates jobs and opportunities.

Our economy should be growing


At a time when we’ve had great export prices, and when our biggest markets, Australia and China, are booming. Instead it’s been drifting and the problems getting worse.

With wages a third higher and unemployment a third lower in Australia people are jetting away from New Zealand faster than they’ve been leaving at any time in the last thirty years.

The Aussies have been getting a skilled workforce from New Zealand at our expense.

3100 people left New Zealand for Australia permanently in June - more than in any June month for thirty years.

And the month before that, in May, 3300 Kiwis left for Australia permanently - more than in any May for over thirty years.

They’re leaving because the jobs aren’t here.

Because their incomes aren’t increasing fast enough.

Because there are not enough opportunities for young New Zealanders.

155,000 people are unemployed.

And the people who are damaged the most are our young.

Youth unemployment is up to 27 per cent.

Nearly half of our unemployed are young.

There are 35,800 teenagers under 19 who are not in education, training or jobs.

This cannot go on.

Debt has run out of control. The Government is overspending this year by $16.7 billion.

And with instability and uncertainty in global markets, the government is planning to borrow another $52 billion in coming years.

We need to change course.

We need a vision for where New Zealand is going.


Labour has that vision, a bold plan and the readiness to make the tough decisions:

Labour’s plan which we recently released puts more money in to the hands of the overwhelming majority of families – It helps middle and low earners who need it most.

It pays off the debt and strengthens New Zealand, at a time when the National government is planning to make us more vulnerable to global turmoil by selling our public assets.

National has opted for measures that tinker with our problems and are short-term

New Zealand cannot recover from its economic troubles unless we take a very different approach.

Firstly Labour will not sell our assets. The power companies, Air New Zealand and Kiwibank belong to New Zealanders. They are not National’s to sell. They will remain New Zealand and community owned so that our kids can benefit from the hundreds of millions of dollars in revenue they return to our coffers every year.

Labour’s economic plan will create a fairer New Zealand, where everyone carries their fair share and gets a fair go.

Labour will introduce a capital gains tax, which will mean that people who earn their income by speculating will pay tax on income that currently goes untaxed.

We won’t put the tax on the family home and it won’t be retrospective.

Virtually every developed country has a capital gains tax.

It’s not only fair, it’s better for the economy. People who make profits buying and selling assets should pay the tax like people who earn their income from wages or interest on their money in the bank.

And we should encourage people to invest in the productive sector where real jobs are created rather than the speculative sector which only creates inflation.

Income from the CGT will help pay off our debt.

It means we can also afford to bring in a $5000 tax free zone - that is, the first hundred dollars a week you earn will be free of income tax.

That’s worth about ten dollars a week, whether you are a wage and salary earner, or you’re on a fixed income such as superannuitants.

That’s $520 more in your pocket a year, $1000 extra for a couple.

It’s fair, because everyone gets the same.

Families who didn’t get the big tax cuts are being crushed.
A tax free zone helps every earner, not just a few.

The squeeze on family incomes is caused because basic necessities have been rising fastest.

Power, petrol prices, and food like milk and vegetables.

One way Labour can help is by taking taking the GST off fresh fruit and vegetables.

They’re a basic food item. Everyone needs fruit and veges in their diet, and research by our medical schools shows that when the price comes down, people buy more of them.

And we’ll look at the price of milk and whether monopoly structures keep the price too high.

Labour is going to start the job of increasing incomes for working people by increasing the minimum wage to $15 an hour.

That’s another $66 a week in the pay packet for a low income worker and will encourage wages above the minimum level to rise as well.

It will directly help 400,000 people earn a living wage. It means for people who got very little in income tax cuts, and what they got was swallowed up by rising prices.

We also need to lift New Zealanders’ incomes across the board. To do that we also need to invest in a high tech, high skill, high value economy.

* Labour will bring back tax credits for investment in research and development to help our exporters develop the innovative products they need to compete and win.

* And we will invest strongly in training, in apprenticeships, in skills. We need to get New Zealanders who are out of work, including the 58,000 young people, into jobs. Into good jobs.
In Canterbury rebuilding from the earthquakes will be hampered as the industry acknowledges by lack of skills and failing aprrenticeships numbers. That means bottle knecks that will push up prices.

The National Government in the last year cut $145 million from the Budget in industry skill training. And the number of skill training places has dropped by 31,000.

Australia put three billion dollars aside in this year’s budget - about four billion New Zealand - to invest in skills and training initiatives over six years.

That’s why we’re falling behind.

Labour wants every young person earning or learning.

And that will be our commitment.

* We will also act quickly to make meaningful changes to beef up mining safety.

We know enough now not to have to wait till 2013 for the Royal Commission into the Pike River mining disaster to do what needs to be done.

The need to strengthen the capacity for independent government inspectors to monitor safety in our mines was obvious, but by itself it’s not enough.

Labour will also reinstate check inspectors.

Check inspectors are senior miners responsible for the safety of workers, with the decision-making ability – along with others – to order the immediate withdrawal of miners in dangerous conditions. National scrapped them in 1992. It’s now time to bring them back Labour will.

Labour is also committed to strengthening the mining industry’s regulations.

The model we will follow is Queensland’s.

Their regulations are comprehensive and include the requirement for an underground mine to have a principal hazard management plan.

They also cover provisions for emergencies, rescue and communication, electrical equipment and installations, explosives, power tools, gas monitoring, mine design, mining operations and ventilation.

Labour will work in consultation with the miners’ union, the miners and the industry to take from Queensland what we need to ensure a safer environment here.

We will also reverse National’s punitive industrial legislation. National’s 90-day fire-at-will law is a direct attack on workers at a time when unemployment is already high.

National’s moves to make it easier for bosses to fire workers will now mean every Kiwi heading into new employment runs the risk of losing their livelihood without any reason being given.

It gives bad employers impunity to dismiss employees without good cause.

Last week, a woman wrote to tell me her story:

She is a highly-qualified health professional with two decades of experience. A few days after starting a new job two months ago she was struck down with debilitating joint problems and hospitalised twice.

She was due to get the green light to return to work this week but last week got a letter from her employer who is terminating her employment using the 90 day clause.

She is now out of work and angry and distraught at being treated so unfairly.

National thinks that’s fair. I don’t.

And that’s why this draconian, ideological law will be one of the first things we overturn when we form a new government after November 26.

* Another thing we see as important to raising wages for all Kiwis is to strengthen collective bargaining. We need a new approach to tackling the persistent low wages in New Zealand.

That won’t involve reinstatement of national awards or compulsory unionism.

But we will be looking at ways to make it easier for workers to participate in and benefit from being involved in collective bargaining.

* And we have clear views on pay and employment equity, which we will announce on Women’s Suffrage Day on September 19.
To conclude, there is a lot at stake on November 26.

This year’s election is a referendum

It’s about whether we strengthen our laws on fairness and safety in a workplace or weaken them.

It’s about whether people who currently avoid paying tax will have to pay their fair share, so that middle and low income New Zealanders can get tax relief.

It’s about whether we keep our assets and own our future or National sells it off.

It’s about whether we have a vision and a plan to grow a smart economy, which is high tech, high skill and high wage.

Labour has a plan for a stronger economy and a fairer deal for all, and with the support of your members we’ll have a Labour-led Government, after November 26 to create a better New Zealand.

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