National leader John Key is defending attacks about a newspaper report which quotes him as saying "we would love to see wages drop" by saying he was referring to wages in Australia.
The Bay Report quoted Mr Key as saying "we would love to see wages drop" last December after he was asked a question about wage differences between New Zealand and Australia.
The quote has been seized on by his opponents - Labour and the EPMU (Engineering, Printing and Manufacturing Union) - as revealing the "real face of the National Party's wage agenda" because it contradicted Mr Key's support of wage increases in other media.
Yesterday, Mr Key said he did not recall the comment, but the question leading up to the quote made it clear it was a reference to Australian wages.
The comment was in response to a question about the wage gap by Kerikeri Business Association president Carolyne Brooks-Quan. Mr Key is reported as carrying on to say "the way we want to see wages increase is because productivity is greater so people can afford more".
Yesterday, Mr Key said the first quote would have been a "light-hearted" reference to wages in Australia dropping as one way to close the gap between the two countries and make New Zealand wages look comparatively more attractive.
"I would never have advocated for [wages to drop] so either the comment was incorrectly reported, or it was in relation to Australian wages.
"It's not a change of position, it's not a flip-flop, I've never in my life advocated for wages to fall."
However, Minister of Finance Michael Cullen said the statement contradicted what he said on Radio New Zealand last week, when Mr Key said the first thing he would do in office was "we will raise the wages". "Which is it, Mr Key? Should we believe what you told a business audience in the Far North or what you have been telling national media for months?"
The EPMU also said the Kerikeri quote showed "the real face of the National Party's wage agenda".
National secretary Andrew Little said Mr Key was "lying" about wages to the public.
"We have feared that National's agenda would be to drive down wages as they did when they were last in power and this comment from John Key suggests nothing has changed.
"Every time the issue of wages has been raised, the National Party has tried to turn it into a discussion about tax cuts. Now we know why."
It is the latest in a series of issues on which Labour claims Mr Key has delivered conflicting messages, ranging from his stance on sending troops to Iraq to the merits of affordable housing in the new Hobsonville development.