Ministers to discuss recession busters

JOHN SELKIRK/Dominion Post

PLAN OF ATTACK: Prime Minister John Key has announced an employment summit would be held on February 27 aimed at finding ways to protect jobs and set a strategy for boosting business confidence.

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Senior government ministers meet this afternoon for a briefing on the economy and to discuss initiatives to minimise the damage being caused by the international recession.

Against a background of bad news, Prime Minister John Key yesterday announced an employment summit would be held on February 27 aimed at finding ways to protect jobs and set a strategy for boosting business confidence.

Those issues will be dealt with in detail today when Mr Key and five of his economic ministers meet in the Beehive.

They will be briefed by senior Treasury officials on the impact the global recession is having on exports and employment.

An economic survey released on Tuesday showed business sector employment intentions at their weakest since 1991, with employers warning of impending job losses.

And yesterday business consultancy firm Dun & Bradstreet said New Zealand's outlook was "pessimistic" because of high consumer debt, falling house prices, diminishing exports and lower tourist numbers.

It said demand from Asia – critical to New Zealand's economic performance – was expected to decrease sharply this year.

The Treasury's last economic update, issued on December 18, predicted big increases in debt as the Government racked up unavoidable deficits.

Gross debt is set to almost double to 33 percent of GDP by 2012-2013 as unemployment rises to 6.4 percent.

When officials brief ministers today they will have taken account of international developments since late last year – which have mostly been bad.

The employment summit is an important factor in the Government's planning for what Mr Key said would be a "particularly challenging" year.

It will be chaired by a private sector representative and include business and union leaders.

Mr Key has rejected Labour Party complaints that the Government is not doing enough and has sat on its hands through the summer parliamentary recess.

Ministers say the April 1 tax cuts will boost the economy by increasing spending power, there will better control of government spending and more productive use of public money.

Today's meeting in the Beehive, scheduled to last until 3pm, will involve Mr Key, Finance Minister Bill English, Economic Development Minister Gerry Brownlee, Justice, State-owned Enterprises and Commerce Minister Simon Power, Health and State Services Minister Tony Ryall and Transport and Communications Minister Steven Joyce.

The chief executives of the Treasury, the Department of Prime Minister and Cabinet and the State Services Commission will also attend.

- NZPA