economic turnaround that could see us catch up with Australia, says the Productive Economy Council.
The policies announced today by Labour could see a New Zealand that generates its own savings pool to invest in its own companies, to create superior profits from the innovation in science and technology, and to earn superior margins for our exports and pay our employees superior salaries, says PEC spokesman Selwyn Pellett.
"The fact that he is looking at savings, banking requirements and monetary policy aligned to stability and growth of the economy is music to exporters' ears. Finally someone seems to understand that standing on the throats of exporters to stifle internal inflation results in a low performing economy," says Pellett.
"If the generalities of this speech are turned into solid coherent policy there will be significant debate at the next election between those who want to increase their wealth through asset inflation and those that want to earn their incomes from designing, building and selling our innovative products to the world. Asset wealth creation benefits a select few at a cost to many. It creates no jobs, increases national debt and has us selling off our farms and companies to foreigners, which means profits are repatriated instead of reinvested. An innovative, export-led economy delivers superior wages, savings and local ownership and reinvestment," he says.
"Phil Goff is 100% right that the attraction of Australia is about higher wages not lower tax," says Pellett.
"What Goff has missed out of this speech is a need for a broad based capital gains tax, an increase in the retirement age, and the return on interest for student loans."
"Goff and Labour have it wrong when targeting those that earn and pay high tax in this country. This group actually pays 70% of the net tax contribution after factoring in the effect of Working for Families and other benefits on the government's revenues. A tax reduction to this group may well be appropriate," says Pellett.
"What isn't appropriate is the massive avoidance of tax we have by a section of society that manages its affairs behind blind trusts and LAQCs. As John Walley from NZMEA has often said, lower, wider and simpler tax policies benefit us all."