PREFU shows more tax cuts not the answer, wage growth still needed

The Engineering, Printing and Manufacturing Union says the bleak pre-election economic and fiscal update shows the answer to lifting incomes is through higher wages, not through hollowing out the government’s accounts with further tax cuts.

The PREFU shows the Government is expected to run a deficit for the next five years, at a time when major New Zealand companies are predicting profits in the hundreds of millions.

EPMU national secretary Andrew Little says the need to raise incomes in New Zealand hasn’t gone away and the PREFU means that anyone serious about raising incomes should forget tax cuts and look at how to raise wages.

“Today’s statement only confirms tax cuts are not the answer to raising New Zealanders’ incomes.

“A big chunk of the surplus is already in workers’ pockets thanks to programmes including Working For Families, Kiwisaver and the October 1 tax cuts but people are still struggling because the real issue is the need for higher wages.

“The government needs to keep up its current redistributive programmes as well as its programme of spending in health, education and infrastructure, all of which help to lift productivity, but across the economy as a whole we can’t get away from the need to lift wages.

“Kiwi workers still need to be getting their fair share from their employer to start with and when in any one year half the population isn’t getting a pay rise its fair to say that’s not happening.

“Major companies like Telecom, Fairfax and ANZ-National are making net profits of hundreds of millions of dollars a year and smaller businesses are also reaping the rewards of 9 years of economic growth.

“At a time when the government is predicting five years of fiscal deficits it’s just crazy to hollow out our public services for tax cuts when the real issue is the low wages paid by our employers.”

The EPMU represents 50,000 working New Zealanders across eleven industries.

This year the average pay rise for EPMU members has been 4%, or $35 a week.

ENDS

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