Labour to focus on economy

Helen Clark receives a kiss from CTU economist Peter Conway yesterday. Picture / Mark Mitchell

Labour's focus will shift from major social policy initiatives to boosting economic growth and productivity in its third term of government, Prime Minister Helen Clark says.

Addressing the party's union backers at the Council of Trade Unions annual conference, Helen Clark briefly outlined her vision for the new Government.

She said Labour had already implemented or announced most of the social policy changes it signalled when it came to power in 1999.

The party was now fine tuning those policies and moving to a greater focus on boosting economic growth.

Helen Clark said she wanted to build a "broad national consensus" on ways to improve the economy.

In her first speech since forming a Government she said that common ground could be found on the challenges that lay ahead and how to tackle them.

In recent weeks she and Finance Minister Michael Cullen had spoken to "innovative thinkers and leaders" of organisations outside the Government on the path ahead.

"I believe a lot of common ground can be found on what the challenges are and how they can be met. We want to continue and extend that process of engagement to build a broader consensus about the job that needs to be done."

Helen Clark's speech appears to signal a renewal of a commitment made early in Labour's first term to engage with business and other sectors of the community on improving economic performance.

In the first term Labour created a Growth and Innovation Framework which targeted certain sectors such as biotechnology and information and communications technology for special treatment to help them along.

Labour's economic aim then was to return New Zealand's per capita income ranking to the top half of the OECD, and it has still not achieved that.

The framework was part of a wider drive to talk to the business sector, but there had been less momentum in the last term and legislation such as changes to employment law had not helped Labour's relationship with business.

Helen Clark also used her speech to point out the threat posed by the "mega economies" of China and India which were each producing four million graduates a year - twice New Zealand's population.

Fifty years ago Asian nations had living standards that bore no resemblance to New Zealand's. Those countries now outranked this country in gross domestic product per capita.

The Western world was increasingly competing with China and India, not for low-wage, low-skill jobs but work based on high technology and skills.

She did not believe New Zealand would succeed by building a wall around the economy.

Helen Clark said having a fresh mandate for a third term in office also meant Labour would refresh its own ideas and team.

She said Labour's support from centrist partners New Zealand First and United Future, would not mean a "reactionary" Government.