Counterproductive solutions

According to the Dominion-Post, there has been a big rise in Kiwis leaving for Australia. But the right's analysis of the problem and proposed solution leaves a lot to be desired:

National's finance spokesman, John Key, said the number of New Zealanders voting with their feet and moving to Australia was alarming.

"The Government continues to be in a state of denial about the increasing competitiveness of the Australian economy," he said.

"Quite clearly the massive tax reductions that (Australian Treasurer) Peter Costello has been signalling in Australia are continuing to attract more and more skilled Kiwis."

His view was echoed by Business New Zealand chief executive Phil O'Reilly, who said the latest figures showed how important it was for New Zealand to become more competitive to attract skilled new migrants.

And how would they make us "more competitive"? Cuts to wages and employment conditions, of course! Yeah, that will encourage people to stick around...

If we want to catch up to Australia, then we need to abandon the right's view of a low-wage, low skill economy in favour of a high wage, high skill model. This won't be achieved by National's preferred policies of wage cuts and kicking people off the sickness benefit and DPB; that will simply encourage employers to continue the bad old habit of hiring another warm body rather than investing in training or plant to improve productivity. But then, the right's policies in these areas have never been about catching up to Australia or improving the economic performance of the country; they're simply about putting the interests of employers and business owners first, and enabling them to capture a larger slice of the economic pie - just as they did in the 90's.