Dr Brash's medicine hard to swallow 

Source: NZPA

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The government and Labour are not rushing to fill Dr Don Brash's prescription for closing the wage gap with Australia.

The former National Party leader's taskforce report on closing the 35% income gap with Australia by 2025 recommends a $14 billion cut to government spending, the equivalent of New Zealand's entire health system.

The plan would see massive tax cuts with the subsequent boost to incomes, but also the axing of popular programmes like interest-free student loans and early childhood education.

The wealth gap between Australia and New Zealand is so large Brash is effectively saying the New Zealand economy is sick.

"$64,000 a year is our estimate of what the gap is for a family of four," says Brash.

He says the main cause of this economic illness is government inaction.

"The primary cause of that gap emerging is that successive governments have shied away from the tough decisions."

Brash's prescription is bitter-sweet.

Incomes would be boosted by slashing the top personal and business tax rates to between 20% and 25%. But that would require $9 billion to be slashed from government spending over the next three years.

"We're saying that a little tinkering at the edges ain't going to do it," says Brash.

Under this plan there would be an end to free doctor's visits for the middle class, interest free student loans and subsidies for KiwiSaver.

His taskforce also recommends increasing the age at which you get the pension, selling most state assets and reducing the minimum wage back to the level it was 10 years ago.

But on the street ideas like raising the pension age are being roundly rejected.

"I don't really go along with what he was saying. I think it will hurt people on lower incomes," says one man.

A woman says the pension age should be left at 65, because it's going to affect her.

And therein lies the problem, according to the man who initiated the taskforce, Act Party leader Rodney Hide.

"I think what we've had in New Zealand is years and years of short-term political decision making where people look at each Budget and say, 'What's in it for me?' says Hide.

He might well accuse Finance Minister Bill English of the same thing.

"The report is too radical for the government to pick it up and push it through. Some of the things that are recommended in there would break promises we made during the election and we're not going to do that," says English.

Labour leader Phil Goff says the taskforce is a sham.

"I think it's a sham and a waste of time. The government says that it rejects the recommendations, but why did they set it up under Don Brash when his prescription was utterly predictable?" says Goff.

The doctor's medicine is proving difficult for either side to swallow.