Closing gap with Aus biggest challenge since WWII, says Brash

Don Brash. Photo / Herald on Sunday.

Former National Party leader Don Brash, put in charge of a taskforce to look at ways of closing the economic gap with Australia, says the task is "arguably the biggest challenge New Zealand has faced since the Second World War".

In a speech delivered at AUT University in Auckland today, Brash said that if one thing was certain, it was that "we will not catch Australia on our current track".

"All the signs are that if we simply continue as we have done in recent years the gap between living standards in New Zealand and those in Australia will continue to get wider.

"Small policy changes here and there won't cut the mustard. Substantial changes will be needed in government spending, in the regulatory framework, in investment, and in tax structures."

Opposition parties and trade unions strongly objected to the appointment of Brash as the chairman of the taskforce.

Setting it up was one of the conditions in the support agreement Act signed with National.

Opponents said it was inevitable Brash would recommend increased privatisation and a harsh economic prescription.

Prime Minister John Key defended both the need for the taskforce and the appointment of Brash, saying the wage gap between the two countries had been "a serious, long-term systemic problem for New Zealand" and external advice was needed.

In today's speech, Brash turned to the common sporting rivalry theme to make his point about what was needed to close the wage gap with Australia.

"Some of the choices required to reach Australian living standards by 2025 won't be easy, and will require political courage of the highest order," he said.

"But if we flunk those decisions, we have to accept that our grandchildren will grow up cheering for the Wallabies."


NZ HERALD STAFF