Smelter bailout not the best regional strategy, says Little

17:00, Aug 18 2014

The Government's $30 million Tiwai Pt smelter rescue package was no substitute for an effective regional development policy, Labour's Andrew Little said in Invercargill yesterday.

When asked whether southern voters should not see that bailout as substantive support for the region, the party's labour spokesman said it had been given with no guarantee of job retention and within days the aluminium smelter had announced a restructuring plan resulting in job losses.

"Providing $30m to the smelter at a time when its owner is busily trying to sell it and without a jobs guarantee isn't a regional development strategy," Little said.

Both the Government and the region had to think about what was going to happen next if the smelter didn't have a long-term life but, for its part, the Government had been bad at both investing in regions and ensuring investment was attracted into them.

Labour's contestable $200m regional development fund would ensure regions such as Southland could put in bids for projects of $10m to $20m, he said.

Employment growth was strong in Auckland and Christchurch but not elsewhere and, without the investment to sustain work, regions such as Southland would bleed the next generation of earners to other parts of New Zealand or overseas.


Labour has pledged small businesses with fewer than 20 staff would get more government procurement contracts. When asked whether this would not disadvantage other businesses, including those just marginally bigger than that, Little said: "I don't think it's going to be as arbitrary as that."

If there were two equally competent, capable suppliers, one larger and one smaller, "it's more likely we'd say ‘let's find an arrangement that benefits both'."

There was no evidence increasing the minimum wage to $15 an hour would cost jobs.

The minimum wage rose more than 70 per cent during the nine years when Labour was last in Government, during which time youth unemployment and overall employment went down, he said.

When asked what Labour's proposed commission of inquiry into wages and collective bargaining would disclose that we didn't know already, Little gave the example of approaching the Inland Revenue Department and the former Labour Department (now the Ministry of Business, Innovation and Employment) for information on the number of independent contractors' wage and salary workers, only to find that neither could provide it.

Little said it was already clear that collective bargaining had fallen off, the way people were employed had changed, and that if the average wage had kept pace with productivity improvements during the past 20 years, it would be $7 to $8 higher than it was.

The commission would provide a stocktake of what was happening in the workforce, good and bad, with the objective that people ultimately got to share the gains of economic improvement, providing flexibility without exploitation.

"In the past year we've had economic growth of more than 3 per cent but nearly half the workforce, 46 per cent, didn't even get a pay rise," Little said.

The Southland Times