Labour releases economic plan

ONE NEWS: Michael Cullen has announced more details of the Labour Party's economic plan including a 20 year plan for infrastructure development.

Speaking to a Maritime Union conference in Porirua, Cullen outlined some of Labour's plans to cope with the recession in New Zealand and the ongoing international financial crisis.

"If there is anything we must surely learn out of the current international financial crisis it is we can't afford to continue to be a country borrowing at the rate we're borrowing for the last 20 years or more.

"The agenda for the decade or more will be driven by two concepts - sustainability and productivity."

He says that Labour will issue long-term infrastructure bonds with a tax-free inflation-indexed element to create an electrified railway network for Auckland, including the North Shore and beyond.

Cullen has also committed Labour to increasing the minimum wage during the next term of government so it at least keeps pace with movements in the average wage or the consumer price index - whichever is greater.

That would see the minimum wage rise at a far slower pace than the past three years, where it has moved from below $10 and hour to $12 an hour.

But Cullen says calls for the minimum wage to rise to $15 an hour, although understandable, cannot be committed to in the current economic climate.

The party will also consult with the guardians of KiwiSaver and the Super fund to get them to invest in New Zealand companies, rather than overseas shares.

In a press conference afterwards, Cullen also announced further changes to provisional tax - that is the tax businesses pay three times a year on their expected profits.

Currently, there is an interest charged by the IRD at 14% for under-paid provisional tax. Under the proposed changes the charge will drop to 6% in order to help cash flow for small businesses at a time when they need it most.

ONE News political reporter Guyon Espiner points out that the effects of Labour's economic proposals will have minor economic impact.

"It won't cost [the government] a lot of money ... they'll forgo a bit of interest," he says.

Politically, Espiner says the party have a plan and appear to be doing something towards the ongoing financial crisis.

"Labour is stealing the march from National in terms of economy," he says.

The government says it will release a new economic stimulus package by Christmas this year.

The first major televised election debate is being held tonight, with the economic crisis the topic of the moment. Helen Clark and John Key will go head to head on the ONE News YouTube debate tonight from 7pm on TV ONE and live streamed here on onenews.co.nz.

Following the debate at 10:30pm, there will be an hour long special edition of Tonight, including with debate reaction from Therese Arseneau, Michelle Boag and Matt McCarten.