Labour Party leader Andrew Little is targeting small business owners as a key plank in dragging down New Zealand's unemployment rate to the lowest in the developed world in his first major speech as the leader of the Opposition.

New Zealand's biggest long-term risk is economic security, and the best way to address that is providing a standard of living that accompanies well-paid employment, Little said in a speech to a business audience in Auckland.

To achieve that, he said he will make small businesses a priority, and has tasked his team with developing a plan to make the sector a major part of the Labour Party's long-term economic plan, and would work with business to draw on best practice from the nation's most successful firms, reduce time spent on regulatory compliance, provide training opportunities for new business owners, open up avenues for new investment capital by finding how major investment funds such as New Zealand Superannuation can invest in local start-ups, and use the tax system to support research and development.

"Labour's vision is that New Zealand will once again have the lowest unemployment in the developed world," Little said. "I know there are huge opportunities for our economy in having a stronger small business sector."

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New Zealand's unemployment rate is at 5.4 per cent, or 134,000, as at Sept. 30, with new job creation outpacing the number of new migrants and returning expats arriving in record numbers. While job numbers have been on the rise, wages have grown at a slower pace with the larger workforce increasing labour supply and tepid inflation sapping the need for workers to bid up wages. The jobless rate is the ninth lowest among OECD countries, led by Norway at 3.4 per cent. December quarter employment data is scheduled for release next week.

Last week, Finance Minister Bill English warned wage growth may continue to be subdued with the slow pace of inflation, particularly in the public sector, while pointing out salaries have still increased faster than consume prices.

Little today said the current administration has given up on "fair wage growth" and that too many jobs, especially new ones, are part-time, low paid or in arrangements without protection.

He promised to dump zero hour contracts, where casual workers aren't allocated any guaranteed hours, saying "we should not tolerate them and we will not tolerate them."

Little cited his time as national secretary of the Engineering, Printing and Manufacturing Union in working with large corporates such as Fonterra Cooperative Group and Air New Zealand to protect jobs and lift productivity by working together with a "shared purpose."

He said gross domestic product may be growing at an annual 3 per cent pace, but it doesn't capture the loss of capability in businesses that have closed down, the strain put on social services, the country's volunteer sector, or the state of the environment.

"GDP simply doesn't tell us everything we need to know," he said.

Other areas that Little said need urgent attention to grow New Zealand's wealth include housing affordability, ensuring Auckland operates an internationally competitive city, and developing the country's manufacturing sector. He said he will cover those topics in the coming months.

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