KEY POINTS:
Prime Minister Helen Clark says cross-party talks on new measures to fight inflation are unlikely - undercutting her Economic Development Minister, Trevor Mallard, who on Friday agreed to the need for talks.
The debate over alternative measures to control inflation was reignited on Thursday by another rise in the official cash rate (OCR) and local whiteware company Fisher & Paykel announcing it would relocate 350 manufacturing jobs to Thailand.
It blamed the move on New Zealand's difficult manufacturing environment, which was not being helped by high interest rates and the boost they were giving the already soaring dollar.
United Future, New Zealand First, the Greens have all indicated an interest in cross-party talks. National has also said it would consider them.
But Helen Clark said such talks were unlikely after the Government last year discussed the idea of a fixed-rate mortgage levy with National, only to then be publicly slammed by the party's deputy leader Bill English. That "was not an edifying experience", Helen Clark told the Sunday Star-Times.
On Friday, Mr Mallard said the adoption of any alternative inflation-fighting tools to supplement the OCR would need broad political support and cross-party talks were one way of achieving that.
Mr English said yesterday Labour needed to make up its mind whether it wanted cross-party talks or not.
"The Labour Government is at odds with itself over the issue."
Mr English said National was also willing to take part in wider talks on the issue of policies aimed at boosting the export sector. "We would need to see some indication that Labour is willing to change its policies to make these industries more competitive and stop treating them as a cash machine for Labour to spend their money."
On Friday Mr Mallard said the Government was developing incentives for exporters, which would be included in its expected billion-dollar Budget business tax-cut package.
He said National had repeatedly attacked the planned tax breaks for exporters and had also attacked potential alternative measures to control inflation, such as a levy on fixed rate mortgages.
A spokesman for Helen Clark later played down the difference.
She said the Prime Minister was not ruling anything out, but there were big difficulties in holding cross-party talks with the Opposition as its job was to oppose the Government.
Often that meant it was more interested in "throwing rocks" than coming up with constructive solutions.
However, she said Finance Minister Michael Cullen was free to engage in talks if he chose.
- NZPA
