Bulletin Board

CTU Paper: Short Term Stimulus for Long Term Gain

31 October 2008

Filed under: Union News


CTU Discussion Paper on the Economy

The CTU is releasing today a discussion paper called Short Term Stimulus for Long Term Gain. Numerous organisations have been suggesting steps that can be taken to respond to the real economy effects of the global financial crisis. This paper is for union affiliates to consider but is also being released for wider comment.

The Prime Minister on 19th October said that:

“…given the privilege of re-election, Labour will finalise a December economic  statement. That statement, within our first forty days, will contain an economic stimulus package. That statement will be discussed with our social partners – the Council of Trade Unions and Business New Zealand. Indeed we welcome dialogue with the social partners and other stakeholders in the lead up to, and following, the election. At the core of that package will be plans to bring forward investment in infrastructure and other projects which are job rich.”

The National Party has also said that they would fast track some infrastructure projects and have said they will shortly outline their proposals to assist workers made redundant. 

This paper makes a number of suggestions:

-          accelerate infrastructure projects but focus on positive spillovers across the wider labour market and into the service sector

-          develop an integrated infrastructure package that includes skills investment and productivity or at least explore the possibility of an ‘investment in people’ fund

-          industry approach to focus more clearly on job rich initiatives

-          expand active labour market measures and provide customised support for redundant workers

-          income support measures (e.g. any worker made redundant should keep the in work tax credit as well as any enhanced family tax credits due to lower income)

-          expand programmes on multifactor productivity and use networks more effectively for diffusion of best practice

-          more rigorous ‘Buy NZ Made’ in government purchasing

-          qualified support for variation of provisional tax

-          support for higher depreciation on new investment in technology

-          expand what works – such as ‘Better by Design’ and export credit guarantee scheme

-          don’t attack public sector jobs and involve unions in any reprioritising of public expenditure

-          if there is a wholesale deposit guarantee apply a condition that banks participate in a review of lending practices

-          balanced approach to trade including maintaining strong stance on anti-dumping measures

-          concerns and conditions around a single country NZ weighting for NZSF

-          a long term view of support (with Australia) of our Pacific neighbours

-          establish consultation structures for ongoing discussion with social partners for and beyond the December package, including on financial market regulation

It is recognised that the midst of an election campaign is not the ideal time to get feedback on these issues. We will also be considering papers being put out by other organisations. However, we welcome any comments you may have.

regards

Peter Conway
Economist
New Zealand Council of Trade Unions - Te Kauae Kaimahi
P O Box 6645
Wellington
+64 4 8023816
mobile 0274 939 748

peterc@nzctu.org.nz
www.union.org.nz

[To request a copy of the discussion paper please email dara@nzwg.org.nz]