New Zealand's government is being accused of giving up on its aim to close the wage gap with Australia.
Finance minister Bill English told a meeting of the Australian New Zealand leadership forum that lower pay rates were actually an advantage New Zealand had over its neighbour.
"We have a workforce that is better educated, just as productive and 30% cheaper," he said.
However, his comments have met with criticism today from political opponents and workers' unions.
The Labour spokesman for labour issues Darien Fenton said the remarks are in stark contrast to National's 2008 election pledge to achieve income parity with Australia.
"This is a massive no confidence vote in New Zealand's workforce when the only good thing the government can say about them is they work harder and are paid less," he said.
Spokesman for the National Distribution Union Robert Reid said the comments suggested the government had given up on improving the incomes of Kiwi workers.
"These comments are perhaps not surprising, given the government has refused to face up the reality of why the Australian wage gap opened up in the first place," he said.
"As Treasury has acknowledged, the wage gap opened up in the 1990s when firms were offered the low road, including the deregulation of the labour market.
"Poor investment in plant and machinery was coupled with cut-price wages thanks to the Employment Contracts Act.
"Our wage levels were roughly comparable to Australia in the 1980s, but then dropped to 60% of their level by 2002."
Catching Australia was a key issue for the government when it successfully campaigned in 2008, and it set up a 2025 Taskforce, led by former Reserve Bank Governor and National Party Leader Don Brash, to recommend ways to achieve this.
The government has since shied away from this aspiration, and has dis-regarded some of the working group's recommendations as not politically palatable.
Last year 36,800 New Zealanders moved to Austrlaia, where unemployment rates remain below those of New Zealand and demand for labour is high.