$15 Min Wage Will Push Up Prices And Cost Us Jobs
Joint Release: ACT Finance Spokesman Sir Roger Douglas, Youth Affairs Spokesman Stephen Whittington
Labour’s policy to raise the minimum wage to $15 will throw more people on the scrap heap and shows how out of touch with reality Labour really is, ACT Finance Spokesman Sir Roger Douglas said today.
“Labour claims to be the Party that cares about those on low-incomes but raising the minimum wage is not the answer - it will only push up prices and cost us jobs,” Sir Roger said.
“Labour would have us believe that the majority of employers are big nameless corporations out to maximise profits while screwing their employees. Yet, small to medium sized business makes up 97 per cent of all enterprises in New Zealand and employ one third of the work force.
“Last year more than 50,000 small businesses shut up shop, the highest number in a decade. Of that figure, 3877 employed between 1 – 19 people. Small businesses are struggling and increasing the minimum wage to $15 would simply see more businesses close their doors.
“Even Mark Peck, former Labour MP turned small café owner, agrees Labour’s policy is out of touch:
“… in an industry with low margins, wage costs are very significant. I don’t think people understand the effect a $15 minimum wage would have on businesses like this. Prices go up…if prices go up, customers, already feeling the economic squeeze, change their spending habits… The result: less profit for owners; less money to employ staff.”
“Increasing the minimum wage to $15 will hurt the people that Labour says they are trying to help. By pushing up prices, people will have to spend more money to buy necessities and will have less to spend elsewhere. This will be made even worse by the fact that there will be even fewer jobs available in the first place,” Sir Roger said.
ACT Youth Affairs Spokesman Stephen Whittington says this increase would be particularly pernicious for young people.
“The Department of Labour have already estimated that scrapping youth wages reduced the number of jobs for those aged 16 and 17 by 4,500-9,000.
“This proposed increase will further marginalise young people, who are most susceptible to unemployment as a result of high minimum wages,” Mr Whittington said.
“Former Labour MP Mark Peck has woken up to reality. It’s time for the Labour Party to do the same,” Sir Roger said.
ACT Position Vindicated
ACT MP Sir Roger Douglas today heralded Department of Labour research that demonstrates the effect of ending youth wages: a significant increase in the number of youth who cannot find jobs.
"When I first introduced the Bill to re-establish youth minimum wages, those in Labour and the Greens cited research undertaken by Dean Hyslop and Steven Stillman, which indicated earlier increases in the minimum wage for youth had not led to unemployment," Sir Roger said.
"We argued vociferously that the rates were so high that they were locking youth out of jobs, and that the earlier figures were not relevant. Today, a further study undertaken by Hyslop and Stillman proves that we were right.
"The study concluded that 'this minimum wage increase accounted for approximately 20–40 percent of the fall in the proportion of 16 and 17 year olds in employment by 2010. Overall, this implies that the introduction of the NE minimum led to a loss of 4,500-9,000 jobs for 16 and 17 year olds (employment of 16 and 17 year olds fell from 61,400 to 39,500 between 2007 and 2010).'
"If Labour and the Greens want any credibility on this issue, they must now reverse their position. The study and methodology they relied on to argue their case has now demonstrated that they were wrong, ACT was right, and youth are suffering.
"However all the reports in the world will not put a single young person back into work. Reinstating the youth minimum wage will. Sadly ACT has been the only Party with the courage to propose this. If National really cares about the thousands of young people struggling to find work it must pledge to do the same," Sir Roger said.
National Playing Chicken With Government Super
New analysis by David Chaston of ‘interest.co.nz’ into the true cost of New Zealand superannuation only highlights the grave mistake National has made in pledging not to raise the retirement age, ACT New Zealand Finance Spokesman Sir Roger Douglas said today.
“We all know that our life expectancy is far greater now than when the retirement age was first set. Mr Chaston’s analysis shows that an average person retiring in 2011, who lives to 85, will claim back in super almost 88 per cent of all the taxes they have ever paid in their lifetime, in real terms,” Sir Roger said.
“If we take into account the cost of all other public services received it is clear that the average superannuitant is taking out far more than they put in. This growing disparity is placing the financial burden squarely on the shoulders of our younger generations. If we don’t act now, it will soon reach tipping point, demographics show a decrease in the number of workers to every superannuitant from 4.5 today to 2.2 by 2036.
“Mr Chaston has reached the same conclusion as the ACT Party and many leading economists – the Government must increase the age of eligibility for Government super. But National continues to play ‘chicken’ with the retirement age and its taxpayers who will get hurt.
“National should admit their mistake and move to increase the age of eligibility gradually. Everyone knows that this change has to happen, it’s time for National to take action,” Sir Roger said.
To view the article by David Chaston please click here
Creating new jobs. That's what it's about.
Our youth need a chance to get on the career ladder
Do you know a young person struggling to find work?
41,400 young people are now out of work, enough to fill Mt Smart Stadium. One in every three young people that wants to work can’t.
There are no jobs for them.
It’s true, there’s been a recession. Unemployment is worse than usual for everybody, but youth unemployment is off the chart.
Why?
It’s common sense that hiring a 17 year old is a bit of a risk. They don’t have experience.
That’s why we used to have a youth minimum wage.
So employers would take a chance on a young person and give them experience.
Then Labour removed the youth minimum wage.
Now young people are forced to compete with older, more experienced workers for the same rate of pay.
Employers choose experience every time.
Economist Eric Crampton from Canterbury University has calculated that 12,000 youth are unemployed for this very reason.
National know this but refuse to do anything about it. As usual, they campaigned against this Labour policy; now they’re keeping it.
ACT wants a future where young people can have the dignity of work. We want a future where young New Zealanders can learn skills and become productive citizens.
The difference is that we’re prepared to apply economic common sense to get there.
Creating new jobs, that’s what it’s about.
National’s Message To Youth: Stay On The Couch
National’s failure to support reintroducing a youth wage is condemning youth to a future of doing nothing, learning nothing and earning nothing says ACT New Zealand Finance Spokesman Sir Roger Douglas.
Canterbury University Economist Eric Crampton estimates that up to 13,100 young people are out of work as a consequence of the youth wage being abolished. It is patently obvious that for these thousands of young people getting off the dole and earning a wage would give them a substantial pay rise, not a pay cut.
“Yet last night Mr Key said that the youth wage was ‘only one factor’ in terms of youth unemployment and all but ruled out reinstating it.
“Instead today he announced policies including tracking youth who are not in work or training, restricting what young beneficiaries can buy and encouraging them to attend budgeting programmes. I am certain if given the choice between these feel good measures and actually having a job, almost all beneficiaries would choose the latter.
“But this is a choice that thousands of unemployed young people are being denied, and will continue to be denied until the youth minimum wage is reinstated.
“Finance Minister Bill English said yesterday that there are no easy political solutions to the global debt crisis. He was right, but should reflect that the same applies to youth unemployment. If National really cares about helping young beneficiaries they should take the most obvious step; allow young people to help themselves first,” Sir Roger said.
ENDS
Goff Wrong: Capital Gains Taxes Do Not Drive House Prices Up or Down
Phil Goff’s claims that a Capital Gains Tax (CGT) would prevent property speculation and fix housing affordability are wrong, ACT New Zealand Housing Spokesman Sir Roger Douglas said today.
“If a CGT were a serious driver of housing affordability, then Australia - who has had a CGT since 1985 - would not have the most unaffordable housing in the English speaking world,” Sir Roger said.
“If we look further afield, the United States and Canada also have nation-wide capital gains taxes, yet both countries have experienced housing bubbles in which house prices soared. Clearly, a Capital Gains Tax is not a significant factor in the demand - and therefore price - of housing.
“If we’re serious about housing affordability we must address the real issue behind the rise in prices: red tape. It is regulations such as the Resource Management Act, the Auckland Metropolitan Urban Limit and the availability of land for residential development that have conspired to make the construction of new housing far too difficult. These regulations drive up costs and slow down development, creating shortages which push prices up.
“If we really want to help low-income New Zealanders into the housing market the last thing we need is yet another tax. We need to get out of the way of construction and let builders and developers get on with the job. Ridding ourselves of red tape is the most cost-effective solution,” Sir Roger said.
Impose More Tax: Lose More Votes
Labour’s dramatic drop in the polls as a result of its new tax announcement is no surprise; New Zealanders realise it’s yet another massive tax grab which will do nothing to help our economy or get us out of debt, ACT New Zealand Finance Spokesman Sir Roger Douglas said today.
“Labour would have us forget that it was their spending binge while in Government that got us into this financial quagmire - but now instead of focusing on ways to reduce Government spending Labour would prefer, as always, to simply tax us more,” Sir Roger said.
“Despite National’s promises they’re not much better, continuing with Labour’s reckless spending policies that see us borrowing $300 million a week.
“Reducing Government spending is the key to a better economy. It would reduce debt, reduce borrowing, and have flow-on effects for our currency, economy, and interest rates, which are currently hurting our exporters and stifling our growth.
“ACT is the only Party committed to controlling Government spending. ACT’s ‘Spending Cap (People’s Veto) Bill’ - to be introduced in the House this year - would cap Government spending, tying all future spending increases to the rate of inflation and population growth. It would force politicians to prioritise spending, ensuring better quality policy and limited waste.
“This is the true ‘game-changer’ for our country - not more taxes. If ACT’s Bill had been in place from 2004, Government spending would be $10 billion lower than it is today.
“Unless politicians are put on a budget taxes will continue to increase; we have seen this under successive governments. No matter how much tax they impose, it will never be enough and it’s time we did something about it,” Sir Roger said.
ENDS
0.8 Percent Growth: Whoopee!
Whoopee, ACT New Zealand Finance Spokesman Sir Roger Douglas said in response to the Government’s announcement that there has been 0.8 percent growth in the March quarter.
“If we are lucky, by this time next year we may be back to where we were in 2008,” Sir Roger said.
“By 2014 we might even gain back what we’ve already lost between 2008 and 2011.
“I won’t hold my breath,” Sir Roger said.
ENDS
Politicians’ Heads In Sand Over Retirement Age
ACT New Zealand Finance Spokesman Sir Roger Douglas today welcomed Retirement Commissioner Diana Crossan’s comments on superannuation and called on the Government to heed her advice and raise the age of eligibility to 67.
“Since its introduction, the life expectancy of superannuitants has increased by 40 per cent while the age of eligibility has only increased by 8.3 per cent – this is clearly unsustainable,” Sir Roger said.
“The United States, United Kingdom, Germany and Australia are already moving - or have moved - to raise their retirement age. But here in New Zealand, Prime Minister John Key shut down the debate by threatening to resign. Most New Zealanders realise that an age increase is inevitable. ACT believes it would be better to phase in an age increase over time rather than implement a drastic increase when we reach crisis point.
“But the retirement age is not the only problem. Not only are we living longer, we are not having as many children - our population is aging. New Zealand super is, in reality, a giant Ponzi scheme requiring ever increasing numbers at the bottom to pay for those at the top. Demographics show a decreasing number of workers to every superannuitant from 4.5 workers today to 2.2 workers by 2036.
“We need to radically rethink New Zealand super so that future generations do not face ever-increasing taxes to fund an unsustainable scheme. The best way to do that is to remove politicians from the equation, allowing individuals to make their own provisions for their retirement. ACT believes raising the age of eligibility is a necessary first step,” Sir Roger said.
ENDS
Lynch Mobs A Menace To Free Speech
It’s a sad day for free speech when people can be hounded from their jobs simply for expressing controversial views, says ACT New Zealand MP Sir Roger Douglas in the wake of the sacking of EMA Chairman Alasdair Thompson.
Mr Thompson has been removed from his position for saying absenteeism in the workplace is greater among women because of their monthly periods.
“Mr Thompson was unable to provide evidence for his view. TV3 presented evidence of a discrepancy between men’s and women’s absenteeism, but offered no explanation,” observes Sir Roger.
“The point is, in a free society with a robust tradition of vigorous and open debate, it should be possible to raise such matters – and be wrong about them – without being destroyed by lynch mobs.
“Valerie Grant, honorary senior lecturer in the University of Auckland’s Department of Psychological Medicine, asked yesterday if we could all calm down and treat sex differences sensibly. It’s a pity the EMA didn’t heed her. Instead, as columnist Karl du Fresne observed, Mr Thompson was ‘howled down so deafeningly that public figures in future will think very carefully before expressing a view on anything, and good people who might otherwise be tempted to enter public life may decide it's just not worth the grief.’
“Mr Thompson’s views were clearly offensive to many, but if that is grounds for dismissing him, we may as well become an Iran. As Salman Rushdie has said, freedom of speech is meaningless if it doesn’t include the right to cause offence.
“Those who screeched for Mr Thompson’s head and who are now congratulating themselves on their latest trophy would do well to remember Voltaire’s ‘I disagree with what you say but defend to the death your right to say it,’” Sir Roger concludes.
ENDS
