PM sticking to his guns over early school leavers

John Key. Photo / Mark Mitchell

A scheme offering early school leavers free education in places such as polytechnics or trade academies will begin from the end of the year - and the Prime Minister intends to stick to his policy of refusing a benefit for any who do not take up the chance.

Yesterday John Key said the Youth Guarantee scheme would be rolled out from the end of the year. It will offer 16 and 17-year-olds who decide to leave school free education in places such as trade academies, polytechnics or wananga.

National's election-year policy was for early school leavers who were not working and refused to continue in another form of education or training to be refused a benefit.

When asked if the "no benefit" condition still applied given the jobs shortage in the economic downturn, Mr Key said "well, I'm not backing down from it".

"Our view has always been that a 16 or 17-year-old going on the dole is a waste of government resources and their time. We need those youngsters to be engaging in education."

Mr Key also voiced hope that the end of the recession was near after Reserve Bank governor Allan Bollard said on Tuesday that the country was poised to move out of recession.

However, he said a massive task remained for the Government.

Mr Key's comments followed a speech he gave on the economy at a business breakfast in Wellington yesterday.

Mr Key said new ideas and initiatives were being worked on but the purpose of the speech was to explain the Government's thinking on improving the country's economic performance over the longer term.

He said New Zealand's economy was in "the third division" of OECD countries, with Greece, Korea and the Czech Republic.

"Skilled people will move to countries where they can earn more. Businesses will locate where conditions are favourable to them. Investors will put their money where it can get a good return."

New Zealand's economic performance had been "disappointing" for a number of years. The economy had "flattered to deceive" with growth coming from people working longer rather than high productivity, and increases in domestic consumption rather than a strong export industry.

He set out a prescription for rectifying longer term, systemic problems in the economy, listing six "policy drivers" to boost productivity. They included regulatory reform, investment in infrastructure, better public services, education and skills, innovation and business assistance, and a "world-class tax system".

Labour's finance spokesman David Cunliffe was quick to criticise the speech for failing to present any new ideas.

However, it found some favour with Business NZ.

The business group's chairman Phil O'Reilly said the six-pronged outline gave business a greater understanding of the Government's areas of focus.