A guest comment by CTU Economist Peter Conway

clip_image001.jpgThe National Party wants to limit the debate about decent incomes to tax – and only tax. Remember the last National Government attacked wages and conditions as well as benefits. A familiar tactic which we see across the Tasman now – promise tax cuts while also planning to attack pay and conditions.

What is the CTU saying about incomes? We have said consistently that New Zealand now has embedded low wages. The 30 percent income gap with Australia is primarily about wage levels – not taxes. We want a lift in the minimum wage to $15 an hour (about two-thirds of the average wage) and strengthening of collective bargaining on an industry and multi-employer basis. We are not opposing tax cuts.

Clearly tax cuts are coming. The timing, design, magnitude and so forth will continue to be debated and we are not arguing against them. We are simply saying that in our list of priorities, tax cuts are some way down the list. They come after decent wages, maintaining and improving our public services, meeting the new challenges around issues such as climate change, and also investing in the skills and infrastructure required to modernise our economy in order to lift incomes on a sustainable basis.

It is not in the interests of workers to allow all income issues to be reduced to a debate about tax. Will the National Party for instance support the CTU call for a minimum wage of $15 an hour? Will they (and others) support tax policies that will make housing more affordable in the long run – such as a more comprehensive capital gains tax on investment housing? Will they support pay equity? What about a call for higher pay on an industry basis to address skill shortages?

For all these reasons I hope that as the debate continues about the tax cuts which are inevitably coming, the focus remains on overall wellbeing and all the of the wage, benefit, public services and investment issues we need to consider – and not a presumption that only one issue (tax) matters when we look at ways to lift incomes.

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9 Responses to “A guest comment by CTU Economist Peter Conway”


  1. 1 Idetrorce 15 December, 2007 at 11:49 pm

    very interesting, but I don’t agree with you
    Idetrorce

  2. 2 finsec 17 December, 2007 at 1:25 pm

    Thanks for your comment – and the debate continues!
    Editor

  3. 3 Alex 12 June, 2008 at 3:59 am

    Tax cuts are always welcome.

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