Hon Dr Michael Cullen
Minister of Finance
21 February 2008 Media Statement
Key’s denial on wages lacks credibility
John Key’s claim that when he said he wanted wages to drop in New Zealand he meant to say he wanted wages to drop in
Australia defies belief, Finance Minister Michael Cullen said.
Despite regulary telling national media that he would raise wages in office, John Key told a Northland business audience
that he “…would love to see wages drop.”
“Observors would have to suspend a great deal of judgement and intelligence to see credibility in Mr Key’s non-denial
denial,” Dr Cullen said.
“The truth is that Mr Key was making a case that wage growth should occur only after productivity growth. Linking wage
rises to productivity gains is fair politics, but saying you want wages to drop to control inflation is not a view
supported by the Labour-led government.
“If Mr Key was talking about Australian wages, what did he mean when he said:
“We really want to drive that out.”
“Mr Key was saying that wage rises given to low-income workers are dangerous and inflationary. This is not a surprise
given his opposition to the Labour-led government’s increases to the minimum wage and moves to boost the incomes of
families with children.
“If Mr Key wants to have a debate on these issues we would welcome that. But we need Mr Key to start telling us what he
actually believes instead of what he thinks we want to hear.”
Under the last National Government average real weekly earnings increased by a total of $1.31 a week in 1990 dollars
over that 9-year period. Under 8 years of a Labour-led Government, the rate of increase has been 30 times that level.
ENDS