KEY POINTS:
Prime Minister Helen Clark says if the economic downturn bites hard, the large number of short-term work permits issued to foreign workers plugging gaps in the workforce will not be renewed.
"I am confident we have quite a lot of slack there," she told the Herald as she prepared for the final week of the campaign and a bid to lead a fourth-term Government.
Between July last year and June this year, 181,697 work permits were issued in areas of worker shortage.
If it looked as though New Zealanders were taking up that work, then the work permits - ranging up to three years - would not be renewed. Immigration had been told to keep a close eye on changes.
"We have told Immigration that if there is the slightest sign of uptake they are to get much tighter on permits," Helen Clark said after campaigning in Mangere, Auckland, yesterday. Immigration Service and the Ministry of Social Development would work together on it.
Helen Clark said Labour's response to the global downturn was "malleable" and would be used only in areas which were badly affected.
"The way I have framed all this is 'here's what we will do if we have to, to stop unemployment going up'."
She also said there was no chance that the recognised seasonal employer scheme that employed many Pacific workers in orchards and vineyards would be stopped because there was no hope of New Zealand being able to supply the required workforce.
Helen Clark and National leader John Key will go head-to-head tonight on TV3 for only the second time in the four-week campaign. Mr Key, campaigning in the Hutt Valley yesterday, announced a $500 million capital spend on school buildings.
Helen Clark stopped big spending promises at the end of the first week because of the global downturn.
Yesterday she was relatively upbeat, saying New Zealand was in an interesting position. "The world economy is obviously very volatile. But here we are. We had a technical recession in the first half of the year; who knows, we may have been in recession in the September quarter but we have still got unemployment under 4 per cent and in the year to June we issued 181,000 work permits."
Clark announced two more measures yesterday to add to its suite of possibilities that could be activated if it regains power after Saturday's election.
One would be to enhance the existing financial assistance rate (between 50 per cent and 70 per cent) for funding new local roading that could be used for roading for public transport; additional walking or cycling facilities; street lighting upgrades; footpath renewals; and local road maintenance.
The second measure would allow more than 40 per cent of the broadband roll-out fund to be spent in the first year, if suitable applications for the fund were made.
Labour has already promised it would deliver a mini-Budget next month. Updated forecasts from Treasury on the economic outlook will decide which measures it would need.
Helen Clark and Mr Key engaged in manoeuvrings with support parties and potential support parties at the weekend. Helen Clark gave unconditional support for entrenching the Maori seats in law - a bottom line for the Maori Party.
That was a shift from her position last week when she said Labour would support entrenchment of the Maori option - the process every five years to determine the number of Maori seats.
Mr Key met Act leader Rodney Hide and confirmed that he would be a minister in a National-led Government whether or not National needed Act's support. The same goes for United Future leader Peter Dunne.
Helen Clark was chirpier yesterday than she was at the end of last week - the worst on the campaign trail, with the failed mission of president Mike Williams to nail Mr Key to the unlawful H-fee transactions.
"Mike's phone is permanently off-air," she said.
Labour had saved a lot of its spend for advertising this week and she stayed on message: "Strong proven leadership, with a plan that you can trust and, by implication, the other side has none of the above.
"I think you'll find that they just keep smiling around shopping malls and try not to make mistakes."
STIMULUS PACKAGE NEW ANNOUNCEMENTS
* Improve existing financial assistance rate for funding local roading for regions with big economic downturn.
* Consider applications towards broadband rollout beyond the $340 million (40 per cent) allocated for year one of the investment programme.
