By 3news.co.nz with NZPA
Prime Minister John Key is defending comments by Finance Minister Bill English that New Zealand's wage gap with Australia could be an advantage, but says the Government is still aiming at reducing the gap.
Speaking at a leadership forum at the weekend, Mr English said the fact New Zealand wages were 30 percent behind Australia's meant there was an advantage in luring jobs and capital.
At today’s post-cabinet press conference Mr Key says the Government’s aim is still to close the wage gap.
“The Government remains committed to closing the wage gab with Australia. The significant amount of Australia’s higher wages come from there ability to harness minerals and it is important we do everything to close that gap.”
But Mr Key says the lower wages have helped attract business to New Zealand.
“There are some companies coming to New Zealand because at the moment we represent value with high quality people.
“In the case of someone like Canon who has set up there call centre in Auckland, which is quite a high quality call centre, it was one of the reasons why they came over.
Mr English defended the comments in a TVNZ interview yesterday.
"Well, it's a way of competing, isn't it? I mean, if we want to grow this economy, we need the capital - more capital per worker - and we're competing for people as well," he said.
"... we need to get on with competing with Australia. So if you take an area like tourism, we are competing with Australia. We're trying to get Australians here instead of spending their tourist dollar in Australia."
Mr Key defended Mr English earlier today saying the comments had been taken out of context.
"He's simply making a point that at the moment we are seeing investment because of those wages," Mr Key said.
"It's not a new strategy, he's not arguing that's the right thing to do. He's just saying that leads to some investment at the moment, just like the very low exchange rate with Australia leads to some greater exports at the moment.
"But our aim over time is to eliminate those advantages because that means our economy's growing faster."
Labour leader Phil Goff said yesterday Mr English's speech showed the Government had no plan to address the worsening economic outlook.
"With the rising cost of living and more people worried about their job security, middle and low income earners are worse off," he said.
"There is growing pessimism about the economic outlook and recent surveys show business confidence dropping.
"The best Bill English can do is trumpet that New Zealand wages are 30 percent below Australia's giving us an 'advantage'. This from a Government which campaigned at the last election on closing the gap with Australia."
NZPA / 3 News
source: newshub archive
