Hardline ideas will not make the cut, says Key

Don Brash, former National Party leader. Photo / Doug Sherring

Former National Party leader Don Brash is well aware the Government will not sign up to any politically unpalatable recommendations the economic hardliner puts up to close the income gap between Australia and New Zealand, says Prime Minister John Key.

Opposition parties and trade unions have strongly objected to the appointment of Dr Brash as the chairman of a new taskforce charged with finding ways to close the wage gap with Australia by 2025.

Act leader Rodney Hide confirmed the appointment yesterday. The taskforce was one of the conditions in the support agreement Act signed with National.

He estimated it would cost $477,000 over three years but was needed to ensure there was action on the goal National and Act had both campaigned on of closing the 30 per cent income gap.

Trade unions and Opposition parties objected to the appointment, saying it was inevitable Dr 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 Dr 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.

He conceded Dr Brash could put forward some ideas already rejected by the Government - but said Dr Brash was aware the Government would not sign up to unpalatable proposals.

"I don't want to curtail Dr Brash's thinking but obviously in the end there's no point coming up with policies unless they're implementable and I think he has a fair sense of what's off the table and what might be on it."

National has ruled out selling state assets in this term of government and Mr Key has promised to campaign openly if there is any change to that stance in future elections.

Mr Key said he expected the remaining four members of the taskforce, who are yet to be appointed, to come from a broad spectrum of the political scale.

Yesterday Dr Brash refused to discuss any specific proposals he believed the taskforce would consider.

"Clearly the present track isn't going to do the trick . It's a big gap which has emerged over 30 or 40 years and frankly, if we want to cure that we have to make some changes."

Labour leader Phil Goff said the appointment was a "Trojan horse" set up by the National Government to achieve privatisation. "[Dr Brash] has been very frank about his support for privatisation and a right-wing ideology to govern the direction this country moves in."

EPMU national secretary Andrew Little said he would reserve full judgment until he saw the final composition of the taskforce.

However, he said the beginning sent a "very strong signal that the recommendations being sought by the National-Act Government are the same prescriptions we saw in the 1990s".

Dr Brash was not the only former National member of Parliament appointed to a Government post yesterday. Former Cabinet minister and farmer John Luxton was appointed to the board of Landcare Research.