Budget to show faster drop in unemployment rate, Key says

Prime Minister John Key

Prime Minister John Key has hit back at the opposition Labour Party's pledge to cut unemployment, saying Thursday's budget will show a faster drop in the jobless rate than previously estimated.

The Treasury will forecast unemployment at 4.5 percent by 2017, lower than the 5.2 percent rate projected in the December half-year economic and fiscal update, and down from a current rate of 6 percent.

"The target actually in the budget is 4.5 percent, I can tell you that for a fact, for 2017, that's what it's tracking at," Key said at his weekly post-Cabinet press conference.

Labour leader David Cunliffe today pledged to reduce the jobless rate to 4 percent by the end of his first-term, which would be in 2017, if elected, saying the Opposition would create 20,000 more jobs than what the National-led administration is projecting.

Cunliffe said Labour would drive jobs growth through a combination of policies including more government buying of Kiwi-made products, stimulating production of higher-value wood products to boost forestry jobs, and create jobs in the construction sector via its 'KiwiBuild' plan to build 100,000 affordable homes over 10 years.

Key rubbished Cunliffe's announcement, saying a prospective Labour-Green government opposed sectors such as oil and gas and the expansion of agriculture, and that meant "there's no way they're going to get unemployment going down.

"It's not about what target you have or what figure you have, it's what policies you have to back that up," he said.

Government figures last week showed faster than expected jobs growth in the first three months of the year and a greater level of participation, indicating the flood of inbound migrants were finding work without driving up wages. Because the size of the workforce was growing, the unemployment rate stayed at 6 percent.

(BusinessDesk)

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