Labour is eyeing a raft of new economic policies including tax breaks and incentives for exporters, extra spending on infrastructure in depressed areas of the country and ways to lower the barriers to capital raising for small businesses.
In a speech to unionists this morning finance spokesman David Parker said Labour was looking at ''pulling levers big and small'' to help boost economic growth and jobs, especially in manufacturing.
The speech comes just a day after Economic Development Minister Steven Joyce set a new target of boosting exports' share of the economy from 30 per cent to 40 per cent over the next 13 years.
Parker said the policy challenge for Labour was how to get more people into good middle income jobs.
He said the ideas were not policy, and he was only ''floating'' them at this stage, but they would come on top of Labour's other macro-economic policies which include a capital gains tax, research and development tax credits, a long term move to a higher state pension age, and changes to monetary policy.
Parker leaves next week for a two-and-a-half week trip to the United States and Europe where he will meet economists and academic experts on monetary policy and exchange rates.
He said Labour was looking at further moves on monetary policy, but was not backing away from its 2011 policy in the area. Any new measures would go ''at least as far'' as its 2011 policy.
Labour rejected National's ''hands-off, leave-it-to-the-market strategy''.
''I want an economy which delivers social well-being and maintains New Zealand's control of our own destiny. Redistribution through the income tax system is important but is not enough to deliver fairness, nor lift our productivity to change our economic destiny.''
A productivity breakthrough was needed and that required a stronger manufacturing sector.
''Pouring more coffees, servicing more tourists or selling more raw commodities doesn't add enough to our productivity.''
Governments had been ''banging on about added value and exporting more for decades'' but the country's share of world trade had fallen.
''We should use government procurement to assist the development of New Zealand's economy. And Labour will,'' he said.
The Reserve Bank Act was written when the main economic threat was inflation, but the more pressing challenge now was the high dollar's impact on exporters.
''You don't have to be soft on price stability to recognise that we have a problem with our overseas debt, with underperformance in export growth and with instability in our monetary conditions.''
The country also needed to focus on ways to compete in specialised niches.
''A capital gains tax is fundamentally important to direct investment capital into productive exports on the basis of profitability - instead of away from it because of a tax bias.''
But the country also needed to grapple with how to provide capital to the regions.
''Beyond the dominant pastoral farming sector, I'm not sure that innovative businesses in our heartland have enough access to capital at an affordable price for development.''
At the last election Labour suggested some investment in innovative export companies ought to be tax deductible.
''Should we also give consideration to accelerated depreciation, to encourage more capital investment in plant that improves productivity and creates jobs? Maybe our heartland could benefit from regional lending initiatives,'' he said.
''Should we also consider special incentives for our most depressed areas?''
He said regulation of capital raising should also be cut.
''Existing compliance costs effectively make this uneconomic for all but larger companies. How can that be right in a country of small businesses?''
- © Fairfax NZ News
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