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Hardworking Kiwis need better public services, not more neglect

“The current Government’s priorities for next year’s Budget say nothing about improving public services, yet deteriorating public services hurt working people as much as a pay cut,” says CTU Economist, Bill Rosenberg.

He was reacting to today’s announcement of the Government’s intentions for next year’s budget and its Half Year Economic and Fiscal Update.

“We are seeing increasing numbers of crisis situations in health and housing. Poverty, particularly among children, remains untouched. The value of Working for Families has fallen by $700 million since 2010. With increasing surpluses there is no longer any excuse for neglecting these situations.

“Instead the talk is about stripping revenue from an already shrinking government.

“There is much that needs doing. We should be restoring funding to Health to keep up with population growth, our aging population and decent pay for those caring for them. Big increases in investment and maintenance of state housing and new houses for first home buyers are needed. The Working for Families scheme needs to be restored to its 2010 levels. The recommendations of the Children’s Commissioner’s expert group on child poverty should be actioned,” says Rosenberg.

Rosenberg also points out that underneath the hood, the economy is not nearly as rosy as the headline GDP growth figures the Government boasts about.

“The growth in production per New Zealander is forecast to fall from 2018 onwards, and its average annual growth from 2016 at 1.3 percent is half of the 2.6 percent it was growing during the 2000s.

“Per hour worked it looks even worse. Treasury is forecasting production per hour worked, or labour productivity, to fall by a huge 1.2 percent next year – a result of policies that have created record high net immigration and which make people work longer hours rather than increase the value of what they do.

“This is not good for future wage growth. Indeed, Treasury forecasts are for the share of wages in New Zealand’s income to fall over the next 5 years,” Rosenberg says. “We need fresh policies that focus on encouraging the growth of higher value industries with well-paid jobs, better employment laws that put working people in a fairer position when negotiating for improved pay and working conditions, and real income support and retraining opportunities for people whose jobs are wiped out by technology, offshoring, climate change or badly managed businesses.”