$500M for jobs in N.L.P. alternative

Press, 25 July 1989, Page 6

$500M for jobs in N.L.P. alternative

By

PETER LUKE

in Wellington A half-billion-dollar jobcreation boost is a highcost item in the New Labour Party’s alternative budget, announced last evening in Sydenham. The budget’s overall strategy is to shift spending into employment creation and essential social services and away from “unproductive uses” such as defence and policing.

The biggest single item would be a $5OO million spending programme on environmental problems, housing and schools, which would aim to get young people back to work.

The party believes the scheme would create 20,000 jobs directly and another 40,000 indirectly. It could be applied nationwide and would use local, not imported, materials.

The scheme’s cost would be offset by savings of $355 million from unemployment benefits and present training costs, and also generate an extra $lOO million in income tax.

New Labour believes the overall impact of its budget would be a decline in joblessness in 1989-90 to about 118,000, compared with its estimate of 200,000 under present Government policies.

Other New Labour spending initiatives would include: • An extra $l5O million on pre-school education, as the first stage of an upgrading of the whole education system. • A new training system to replace Access, costing the $4BB million now spent on Access plus

another $250 million. • $BO million more on preventive health care. • Indexing both health and education spending for inflation.

• Doubling the family benefit, at a cost of $2BO million.

• Indexing national superannuation quarterly against movements in average earnings, at a cost of $5O million in 1989-90.

• Boosting overseas aid by $4O million, with an emphasis on PacificIsland nations.

• Splitting the Treasury into departments of finance, budget, and development, at a one-off cost of $lO million.

• Boosting Statistics Department funding $lO million to improve financial information. New Labour believes it could save an unspecified long-term amount from the Justice Department by improving education and employment. In the short term, it would save $l2O million

by capping defence spending at its 1987-88 level and by abandoning the Anzac frigate project.

New Labour would also try to save $lO million in administration by setting up a Workplace Ministry to replace the “mishmash” of controls in this area.

New Labour is pledged to spending an extra $7O million on tertiary education to allow it to scrap any tertiary loan scheme and fee increase implemented by the present Government.

Underlying New Labour’s budget is the belief that the excesses of the free market can only be prevented by the Government.

New Labour’s leader, Mr Jim Anderton, said yesterday his party would repeal the provision in the Reserve Bank Bill requiring the bank to concern itself only with reducing inflation. Instead the bank would maintain interest levels to ensure exporters could trade profitably by abandoning “its current policy of aggressively bidding up short-term interest rates in order to raise the value of the exchange rate.” The bank would also be required to actively trade foreign currency to reduce exchange-rate volatility.

New Labour’s alternative budget reinforces earlier opposition to asset sales. It estimates returns from such corporations as the BNZ, Telecom, New Zealand Post, Coalcorp and Electricorp would be worth at least $4OO million in 1989-90, although Government interest payments would rise by $l5O million.