Australia growing faster, Govt admits

Finance Minister Bill English. Photo / Mark Mitchell

Finance Minister Bill English has admitted Australia's economic growth is outstripping New Zealand's and says that in the long term the Government is determined to turn that around.

Mr English and Prime Minister John Key have been under pressure in Parliament over National's commitment to close the wage gap with Australia, with Labour saying it is widening and accusing the Government of failing to do anything about it.

Mr English today said Australia had a higher growth rate because its economy had not been in recession, and because of the huge demand for its minerals.

"Australia's mineral boom is likely to mean it will perform better than New Zealand in the near term, but it is the long-term trend we are determined to turn around," he said.

"The only way we can permanently lift New Zealand's economic growth is through considered and consistent reform and change year after year."

He said New Zealand's economic growth in the three years to 2008 had been unbalanced and sluggish, and while Australia's economy grew by 11.5 per cent in the four years to March this year, New Zealand's grew by just 2 per cent.

Australia's minerals were in such high demand they made up 70 per cent of its exports, while New Zealand's leading export industry, the dairy sector, made up 20 per cent of exports and prices had not increased by as much as those for minerals.

Labour's finance spokesman, David Cunliffe, has been leading the attack over the wage gap.

He said today Mr English's claim that National inherited a bad economic situation ignored Labour's achievements, such as the world's lowest unemployment rate, the longest post-war economic expansion and halving gross government debt while pre-funding superannuation.

"Every time Bill English repeats his mantra it sounds thinner and more ridiculous," Mr Cunliffe said.

- NZPA