Key on productivity

John Key has given a speech to a CTU conference on productivity. Some extracts:

Getting the representatives of employers, workers, and Government around the table and constructively working together is something I want to encourage and continue.

Yes, there’s plenty we disagree on.   That will probably always be the case.

I fully expect unions to continue to oppose some Government policy and for business and employers to do the same.  Employers and employees will naturally come to loggerheads on occasion.  And, I reserve the right to criticise the approach and ideas of business, or unions, from time-to-time.

But the sum of our disagreements is no match for the weight of what we can achieve together.

I’m trying to imagine Michael Cullen delivering this speech to the Business Roundtable “rich pricks” 🙂

The question is: how do we go about lifting those wages?

One argument says that the Government should simply raise the level of the minimum wage.

And yes, that’s a small part of the answer.

That’s why, even in the midst of extremely challenging economic conditions, the National-led Government lifted the level of the minimum wage this year.

But, in reality, lifting the minimum wage rate will only take workers so far.

If we are to see New Zealanders paid better across the board, to assure them of enduring  employment opportunities, and if we’re to ensure workers can aspire to wages that keep pace with their increasing  efforts and abilities, then simply raising the minimum wage is not the answer.

In the end, it is productivity that drives wages.

So the answer is to ensure that businesses are more productive, and more profitable, and that employers are therefore able to pay their workers better and improving wages.

Productivity and profit are not bad. You need to grow the cake to share it.

New Zealand is a small open economy and this downturn has serious implications for us.

The effects can already be seen. Falling export volumes. Lower growth rates. Struggling businesses. Climbing unemployment.

Faced with these facts, and the dire predictions in the media, it’s tempting for all of us to throw up our hands in despair.

But it’s my sense that New Zealand is in fact in a much better position to weather the global economic storm than many other countries.

Yes, we are in for a rough period ahead.  I don’t doubt that.  To argue otherwise would be to ignore the obvious links between our fortunes and those of the wider world.

Basically the whole world is going to have reduced standards of living.

Let me finish by saying that in recent times the CTU has shown leadership in New Zealand’s fight for economic growth.

You’ve been prepared to work with the Government, and with employers, to find solutions.

I want to keep building on that relationship.

There is a lot to gain from each of us understanding each other better, from working out what we have in common, and deciding where we can deliver more together.

I absolutely share your vision for a more-productive, higher-wage, higher-skilled economy, producing goods and services valued throughout the world.

And I look forward to working with you to make that vision reality.

Such nice words after the CTU spent $100,000 attacking him in the election!