The Government’s notion that a 27 per cent rise in the minimum wage will seamlessly translate to productivity gains is wishful thinking and shows a government out of touch with business realities, National’s Economic Development spokesperson Paul Goldsmith says.
“When asked today in the House how increasing the minimum wage 27 per cent in three years would increase our international competitiveness, Finance Minister Grant Robertson burbled that it would lead to more productive businesses and workers.
“That is fantasy.
“A more productive business may be able to generate higher earnings so that it can afford to pay a 27 per cent increase in wages, but the reverse doesn’t automatically hold true.
“If our Finance Minister doesn’t understand that, it’s no wonder business confidence is so low.
“Scrambling for an answer, the Minister suggested a lift in wages would lead to more spending in the economy. That might be the case, but it doesn’t improve our productivity or our international competitiveness.
“Finally, when asked what he would say to an exporter whose products require a lot of labour and who doesn’t believe he or she can remain in business while increasing wages by 27 per cent, he said that was a hypothetical situation.
‘Well, it isn’t hypothetical, Mr Robertson, this is reality. Most businesses run on tight margins, and for many, labour is a major cost. A massive increase in labour costs, when not matched by productivity gains, will mean that some will go out of business.
“If governments could really legislate for massively higher wages, we’d all be earning $200,000 a year.”
Today’s roading announcement in Gisborne shows what damage Phil Twyford is doing to the transport sector, National’s Transport spokesperson Jami-Lee Ross says.
“As the Transport Minister taxes people more while sucking billions from the regions to fund Auckland trams, the Government scrambles to use special funds for what should be business as usual.
“The Government cut $5 billion from regional highway projects and is hiking taxes to fund trams in the Auckland CBD. Now it’s dipping into the Provincial Growth Fund (PGF) for $153 million of spending in the Gisborne region, most of which will go into roading.
“This is a shambolic approach to the management of taxpayers’ money. It is a giddy money-go-round.”
National’s Economic and Regional Development spokesperson Paul Goldsmith says while he supports regional investment, he’d expect the spending announced today to be part of normal transport funding.
“Instead the Government has shown that the PGF is an all-purpose funding vehicle with murky decision-making.
“The Government has been coy about how Shane Jones is running what amounts to a coalition slush fund. Funding decisions should be open and rigorous. Instead, the process is so opaque that it is hard to assess the quality of decision-making.”
The Prime Minister must act now to assert her leadership against the Regional Economic Development Minister, who is running amok and openly defying her, National’s Economic Development spokesman Paul Goldsmith says.
“This morning, Shane Jones doubled down on his criticism of Air New Zealand CEO Christopher Luxon, whom the Prime Minister has appointed to chair her Business Advisory Council.
“Yesterday Mr Jones refused to resile from his earlier attacks on Mr Luxon and today he went further, dismissing him as a celebrity and bizarrely finishing his interview with Radio New Zealand by saying he should not ‘covet the ass of his neighbour’.
“There’s no other explanation than to conclude that Mr Jones has given the middle finger to the Prime Minister, whose Business Council – yet another working group – is a desperate attempt to be seen to be doing something.
“The Government’s attempted charm offensive with a deeply concerned business community is now in tatters with one of the senior economic ministers at war with business leaders.
“Today he added banks to the long list of businesses to be subjected to his ill-considered clobbering tactics. He started with supermarkets, then Fonterra, then Air New Zealand and the Warehouse and now the banks.
“Nobody, it seems, can do a decent job other than Mr Jones himself.
“It’s well past time for the Prime Minister to assert her leadership and discipline Mr Jones. The fact that the Government is now at war with itself is only contributing to the uncertainty that lies behind low levels of business confidence.”
Revelations that the Provincial Growth Fund will fund all-weather tracks for the horse-racing industry, an uncosted plan already approved by Cabinet, show there are no limits for Shane Jones’ slush fund, National's economic development spokesman Paul Goldsmith says.
“Make no mistake, National supports the racing industry and recognises its economic contribution. That’s not the issue here - funding decisions should be open and rigorous. Instead, the process is opaque and murky so it's hard to disentangle the arguments.
“Mr Jones has revealed that $30 million of contingency funding in the PGF has been earmarked for pet projects including several all-weather tracks for horse racing, a Northland sports hub and Dunedin digital plan. He referred to the plans as ‘a coalition dividend’ that came out of the coalition negotiations.
“He says the projects will be subjected to rigorous scrutiny but papers released to National under the OIA from the PGF’s Independent Advisory Panel make a nonsense of that, showing ‘manifesto commitments’ won’t get a thorough assessment.
“On the sports hub in Kaitaia, for example, the panel says, ‘the application for the PGF to fund the Te Hiku Sports Hubs has been agreed as part of a manifesto commitment and does not require formal advice from the panel to the Minister’.
“This is the latest sign that the criteria for the PGF is ‘as loose and as billowing as the deep blue sea'. It’s an all-purpose political slush fund and you can fit anything into it.
“In this case, they're not even making an argument, they're just saying we're going to do it. Mr Jones has indicated he will use the fund in a brazenly political way and with a Northland skew.
“The price of Labour’s deal with NZ First keeps mounting – with the $3 billion Provincial Growth slush fund and $900 million for diplomats and aid. As spending pressures build elsewhere, such as in education and health, all this loose spending is looking increasingly unjustifiable.”
Shane Jones continues to spend hundreds of millions of taxpayer dollars with no plan or oversight, while the Government repeatedly breaks promises claiming it doesn’t have enough money, National’s Regional Economic Development spokesperson Paul Goldsmith says.
“When the Government is closing down maternity centres like Lumsden’s, cancelling new funding for cochlear implants for children, breaking its promise of universal cheap GP visits and more funding for mental health initiatives because it claims it doesn’t have enough money, the extra $240 million for planting pine trees is extraordinary.
“The fact is the Government has now found around $485 million for NZ First’s pet project, while at the same time telling teachers it can’t afford the pay rises they want.
“Labour is putting its promises to its political partners ahead of everyday New Zealanders and NZ First is milking that for all its worth.
“Meanwhile, Mr Jones’ Provincial Growth Fund continues to cause real concern.
“From broken promises that there’d be no private gain, to terms described by grant recipients as exceedingly generous to Mr Jones doling out cash to people he knows, the fund has been beset by concerning revelation after revelation.
“The Government is flinging good money after bad at projects we have no detail on, no oversight of and no confidence in and it shows no sign of abating or improving.
“And it makes no economic sense. Mr Jones admits the trees will be planted in regions where there is currently little economic rationale for such a strategy and where commercial foresters haven’t seen the need to expand. None of it makes sense.
“When the teachers unions, maternity carers and advocates for the deaf are sitting across the table from ministers pleading poverty they should keep in mind the fact NZ First has more negotiating power than all of them put together.”
David Parker’s dismissal of plunging business confidence levels as ‘the vibe of a self-selected subset of CEOs’ is just the latest example of a concerning level of arrogance from this Government, National’s Economic Development spokesperson Paul Goldsmith says.
“The latest ANZ Own Activity Index, which measures firms’ perceptions of their own prospects and which has dropped to the lowest level since May 2009, should be sending a clear message to the Government that it is driving down business confidence.
“The Treasury’s latest Monthly Economic Indicators report has also highlighted weakening business confidence as one of the key risks to their growth forecasts. Yet Mr Parker continues to arrogantly dismiss all these real concerns.
“First he called the views of business leaders ‘junk’ then he derided them as a ‘survey of the emotions of CEOs’. Now they’re just ‘the vibe of a self-selected subset’.
“The level of arrogance is astounding. Is the Economic Development Minister saying that Kiwi CEO’s are being too emotional when they worry about the costs being added to their businesses? Or about bad industrial law changes and entire industries being unsettled without consultation as happened to oil and gas exploration?
“When facing a business confidence crisis the Government should be prepared to listen and act, but instead it is getting more arrogant by the day.
“Every day that it fails to act, business confidence plummets further, growth slows and opportunities for New Zealanders are lost.”
National is calling on the Ardern-Peters Government to show leadership to ensure the Million Babies concert at Eden Park can proceed on Waitangi Day, National’s Economic Development spokesman Paul Goldsmith says.
The concert, proposed by Sir Ray Avery, would raise funds for the LifePod Trust and organisers believe only Eden Park has the size and catering facilities to make it a success.
“We support this event and urge the Government to do the same. It shouldn’t be so hard to organise an event that would benefit so many children in our city.
“Polling by UMR Research shows 87 per cent of local residents and 91 per cent of Aucklanders want the concert to proceed, but objections by a small minority of locals mean the matter will now be argued in the Environment Court, with no decision until October at the earliest.
“I understand that October will be too late to confirm the local and international acts for the show. Concerns are also being expressed, including by Sir Ray, about the cost of the Environment Court process.
“Jacinda Ardern and Winston Peters need to show leadership and step in and allow this concert to proceed.”
Shane Jones needs to explain what conflicts were declared before the Government gave $6 million to a trust led by a former NZ First MP, and why his slush fund is leading to private gain, National’s Regional Economic Development spokesperson Paul Goldsmith says.
“There has been a total lack of transparency about how Provincial Growth Fund projects are chosen, how that funding is spent and who is benefitting.
“But the Ngati Hine Forestry Trust has done what Regional Economic Development Minister Shane Jones has refused to do and revealed some of that detail – and the results are concerning.
“The Trust’s latest newsletter confirms there is personal financial gain, that the terms are exceedingly generous, and that there are serious conflicts of interest.
“According to the newsletter, the Trust has received $6 million to fund the planting of pine trees and ‘the financial returns to the beneficial owners to be received from this Forestry Right upon harvest will be substantial’.
“The Trust also states that while the details of the deal are confidential, ‘beneficial owners can be assured that from the Trustees’ perspective this is an exceptionally good deal for beneficial owners and is far superior to previous arrangements’.
“And finally, one of the trustees who successfully lobbied Mr Jones for the funding is former NZ First MP Pita Paraone who was eleventh on the party’s list in last year’s election.
“This is incredibly concerning. One of the principles of the fund is there should be no private gain resulting from its investments when in this case there clearly is. It also raises questions about the value taxpayers are getting when the terms are so generous and there are serious concerns around what, if any, of the real conflicts of interest were declared.
“This highlights why all the information surrounding the decision-making process of the Fund, including the business cases and disclosures, need to be made public.
“It now appears that who you know is more important than having a proper business case. If any Minister in the previous Government had made deals in this way then heads would have rolled.
“Just because there seems to be a lower standard expected of Ministers in this Government is not an acceptable excuse for deals like this and Mr Jones needs to provide answers.”
EDITOR’S NOTE: Please find a link to the Ngati Hine Forestry Trust newsletter here.
Analysis of Budget documents reveals that Shane Jones’ much vaunted billion dollar Provincial Growth Fund doesn’t have anywhere near $1 billion to spend this year, National’s Regional Economic Development spokesperson Paul Goldsmith says.
“Mr Jones has been talking up his provincial slush fund of $1 billion a year for the next three years since it was announced. But analysis of Budget documents confirmed by MBIE shows that $332 million, or a third, of this year’s $1 billion will be spent in the 2019/20 year or later.
“Mr Jones is including $245 million for the One Billion Trees programme in this year’s Provincial Growth Fund that, in fact, will be spent over ten years.
“When asked to clarify the amount of money in the fund in the Economic Development Select Committee, Mr Jones said, ‘for the record, there is $1 billion in this fund, and it will be spent over the next year’.
“This is patently untrue. Budget documents show that Grant Robertson has only given him around $550 million to spend in the 2018/2019 financial year, on top of the $123 million already spent in the 2017/18 year.
“It is highly unlikely he’ll spend the $550 million that he does have if he requires quality projects to secure the funding.
“Shane Jones uses the House for his own grandstanding, but what’s worse is he continues to exaggerate and be deliberately tricky and gets away with not being accountable for his slush fund.
“The Minister must come clean on the fact that this billion dollar fund is nothing of the sort.”
Taxpayers and accountants will be surprised to learn that Revenue Minister thinks ‘everything is fine’ with Inland Revenue’s computer systems, National’s Revenue spokesperson Paul Goldsmith says.
“Reports today from the Chartered Accountants of Australia and New Zealand (CAANZ) that Inland Revenue (IRD) appears to be ‘in a state of crisis’ with accountants experiencing delays and issues logging on to the myIR tax system for the past two weeks.
“This is all the more concerning with businesses due to file tax returns by next Saturday.
“The Minister’s casual dismissal of concerns is particularly galling, given the extra pressure his Government has imposed on IRD’s systems by insisting that they also process the Best Start tax credit payments.
“CAANZ have raised the issue with IRD but have yet to receive an explanation as to why the problem is occurring, how widespread the issue is and what steps are being taken to fix it.
“IRD collects $70 billion worth of taxpayers’ dollars each year and we must have reassurance the system is working without glitches that prevent New Zealanders from fulfilling their tax obligations.
“The Minister needs to assure New Zealanders that IRD is not in a state of crisis and is able to cope without causing significant disruption for taxpayers.”