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NZ becoming 'Australia's Mexico' for jobs - Labour

Published: 4:25PM Wednesday April 18, 2012 Source: ONE News

  • Labour MP David Parker (Source: Getty Images)
    Labour MP David Parker - Source: Getty Images

The Labour Party says New Zealand is at risk of becoming "Australia's Mexico" as companies move hundreds of jobs to this side of the Tasman to avoid high wages.

Imperial Tobacco has announced it will move cigarette manufacturing from Sydney to New Zealand and Woolworths has announced it is transferring 40 contact centre jobs to Auckland this week.

The food production industry has been moving across to New Zealand for some time, with Heinz Australia recently scrapping more than 300 jobs across three states in favour of its large plant in Hastings.

The moves have been attributed to Australia's high wages, a soaring Australian dollar and restrictive employment laws.

Labour's Finance spokesperson David Parker said it shows National's promise to close the wage-gap with Australia has "come to nothing".

"Labour does not want New Zealand to become Australia's Mexico, yet with lower value jobs such as making cigarettes that is exactly what is happening," Parker said.

"[Finance minister] Bill English has been misdirecting his energy on praising the advantages of low wages to attract Australian jobs rather than coming up with real ideas to grow the economy.

"There are record numbers of Kiwis leaving for Australia. They are not going so they can work in call centres or cigarette-making factories."

Parker said the Government is too fixated on reducing the Government deficit to address the wage gap.

"Under the current government's settings, the deficit or gap between the value of our exports and the cost of our imports and interest bill is set to grow. New Zealand will continue to get poorer.

Parker said a number of initiatives could reduce the gap, including universal work-based savings, reforming the Reserve Bank, a capital gains tax and a research and development tax credit.

English said last year New Zealand's wage gap with Australia could be a positive, as it could attract more trans-Tasman business in the next few years.

He said Australian companies should be looking at bringing activities to New Zealand because "we're so much more competitive than most of the Australian economy".

He said Government policies were "laying the platform for stronger growth in the future."

The wage gap between New Zealand and Australia is about 30%.