NZCTU asks what is the point of the 2025 taskforce

Peter Conway, CTU Secretary, says that it was a fair bet that this group would simply recycle the policies of the 1984-99 period in their recommendations to close the income gap with Australia by 2025. “But GDP per capita figures show” said Peter Conway, “that New Zealand slipped even further and dramatically behind Australia in the 1984-92 period and the gap has not closed since”.

Why have such a taskforce when it will only make radical suggestions which the Prime Minister rules out? Perhaps it is to open up policy space for the tax cuts and reductions in government spending the government intends anyway? “We will have to wait and see the full report, but early indications suggest that the policy proposals are that we should catch up with Australian income levels by doing something very different from Australian policies”. 

In fact it is higher wages not lower taxes that attracts Kiwis to Australia.

“Our submission”, said Peter Conway, “calls for a lift in capital per worker, a recognition that the more regulated Australian labour market has been better at distributing income fairly, ongoing investment in lifelong learning and initiatives for high performance work practices”. The aim of closing the income gap with Australia is a good one. But we seriously question whether this taskforce adds any value in that quest.

The CTU submission to the 2025 Task Force can be seen at http://www.2025taskforce.govt.nz/pdfs/tfs-nzctu-18sep09.pdf

 

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Media Release Dairy Workers Union–Tuesday 1 December, 2009

2025 Taskforce proposals will kill national economic security

The 2025 Taskforce proposal to sell off Fonterra–NZ’s largest single wealth creator–is economic suicide, says the Dairy Workers Union. “Selling off Fonterra will kill national economic security,” said Dairy Workers Union National Secretary James Ritchie. “Far too much of our wealth disappears offshore already in the form of profit taking, human resources and intellectual capital. Now it appears we should sell off our dairy industry to finance capital. That will certainly create wealth for international investors but will make ordinary New Zealanders a whole lot poorer.”

The Taskforce recommended that “the Government should strongly encourage the transformation of Fonterra into a conventional company structure with fully – traded outside capital, using any appropriate instruments at its disposal.”

“What would selling Fonterra to overseas investors achieve? Additional processing adds value to our dairy products. Why would an overseas owner want to carry out further processing here when they likely have their own factories at home to do the same? We would end up exporting solely raw materials.”

“Today the exports flow out and the money flows back in to NZ communities. This proposal has the exports AND the money flowing out of NZ,” said Mr Ritchie. “This is the tired old New Right prescription to make a few people extraordinarily rich at the expense of an increasing number of low paid workers, who will be stripped of social security protections.”

The Dairy Workers Union advocates lifting our incomes through a high skills, high workplace productivity and high wages path underpinned by strong social and environmental standards.

“The 2025 taskforce advocates a return to the failed policies of the 80’s and 90’s and undermines New Zealand’s economic sovereignty,” concluded Mr Ritchie. “The Government should ignore all recommendations and ask people who live in the 21st century with an eye to the future to make a new set of recommendations.”

ENDS

For further comment: James Ritchie: (021) 554-994.