Prime Minister John Key says it is all very well Labour setting a new target of 4 per cent unemployment but policies were more important than targets, and Labour's policies would increase unemployment.

"I can have a dream of becoming an All Black, too," Mr Key said at his post-Cabinet press conference. "But the probability of Steve Hansen naming me in the squad coming up in the next few months is next to zero."

The Budget-week banter followed a pledge by Labour leader David Cunliffe to cut the rate of unemployment from its present 6 per cent (147,000 people) to 4 per cent within a term.

On today's numbers that would mean another 20,000 in jobs.


Mr Key revealed that Treasury's Budget forecasts to be unveiled on Thursday would be close to Labour's target anyway - with the unemployment rate forecast to be 4.5 per cent by June 2017 - just 0.5 short of Labour's target.

The forecast in the Half Yearly Economic and Fiscal Update in December was 5.2 per cent.

Mr Key also said National was on track to meet its target of 170,000 net new jobs between 2011-2015 - a target which attracted plenty of derision when it was announced in Bill English's 2011 Budget.

"We are going to fulfil our target of creating 170,000 jobs we talked about some years ago," Mr Key said.

The economy was going well but under Labour unemployment would be going up because with its Green partners, it was anti-growth, anti-development, anti-oil and gas exploration, and anti-farming.

Labour would also slow down the economy by increasing taxes.

"There is no way they are going to get unemployment down. Unemployment will be going up.

"The reality is it's not about what target you have or what figure you have. It's what policies you have to back that up." He announced that Inland Revenue would get another $132 million over five years to chase up tax returns, $84 million of which was for write-offs, and it was forecast to generate another $297.5 million gross in revenue.


Mr Cunliffe called a press conference at Parliament yesterday to announce the unemployment target and to reaffirm the party would run surpluses unless faced with a domestic disaster or another global downturn.

He said that when Labour was last in government, it had got unemployment as low as 3.5 per cent and achieved average unemployment of 3.9 per cent for five years.

"We did it then and we'll do it again because Labour is the party of jobs."

He acknowledged that the Government's books would be back in surplus on Thursday and that getting them in order was important.

"But we also know that New Zealanders want more from their government than tidy book-keeping."

"The Budget is more about numbers - it's about people."


The Government would try to tell the country that the surplus meant their economic management had been a success, Mr Cunliffe said.

"They will ask us to ignore the stagnant wages of most working families. They will ask us to turn a blind eye to the soaring costs of living at the supermarket, in our power bills and in our mortgages and rents."