CTU releases Alternative Economic Strategy

Council of Trade Unions media release
11 October 2010

The Council of Trade Unions has released an alternative economic strategy.

Peter Conway, CTU Secretary, said that this strategy has been developed over the last 12 months through discussion and debate among union members.

“It responds to the long run economic problems facing New Zealand as well as the impact of the global financial crisis. The economy is failing to meet the needs of people and the environment and it is a time for serious consideration of alternatives. This is a union contribution to that process.”

Bill Rosenberg, CTU Economist said that the Alternative Economic Strategy is based on six principles: Fairness; Participation; Security; Improving Living Standards; Sustainability; and Sovereignty.

It is framed around three pillars: Sustainable economic development; Decent work and a good life, and; Voice: real participation in decisions in the workplace, economy and community.”

Bill Rosenberg said: “The strategy includes over 100 specific policy recommendations across many areas including economic development, education, financial stability, globalisation, the environment, employment, social security, housing, retirement, inequality, worker participation and the media.”

Specific policies include:

- An infrastructure plan including a human infrastructure fund to give longer term certainty for tertiary education and workplace training and buying back Telecom's physical network at a price reflecting its short life and long neglect.

- Stabilise the exchange rate through broader Reserve Bank objectives, international capital controls, an international financial transactions tax and pegging the exchange rate.

- Lift wages through industry bargaining, higher productivity and a boost to the minimum wage.

- A tax-free band and/or tax rebate for people on incomes under $35,000, tax rates of 38 percent on income above $100,000 and 45 percent on income above $150,000  (three times the average wage) and a capital gains or assets tax exempting the primary home.

- A strategic approach to economic development focusing on certain sectors such as ICT and high level processing of agricultural products, and themes such as environmentally beneficial and high productivity. Provide support to firms which are prepared to work within this strategy and principles of decent work.

- “Flexicurity” providing security of employment alongside flexibility for firms including retaining 90% of prior income for up to 12 months unemployment, conditional on commitment to acquiring new skills and job searching, funded through compulsory employer levies and taxation. Active support to acquire new skills and find new jobs including relocation assistance.

- Consider Kiwisaver enhancements after an appropriate inquiry of
         * Compulsory employer contributions of 6% phased in over 4 years
         * Compulsory employee contribution 2%; Government top-up 2%
         * Government contribution for those not in paid work

The full Alternative Economic Strategy document can be downloaded from:
 http://union.org.nz/sites/union/files/NZCTU%20Alternative%20Economic%20Strategy.pdf

A one page summary is also available at http://union.org.nz/sites/union/files/Alternative%20Economic%20Strategy%20-%20one%20pager.pdf

Open letter to New Zealand unionists by Vaughan Gunson

To New Zealand unionists,

Kick up a fuss!

So says the headline of the latest UNITY leaflet produced by Socialist Worker. (Click here to download).

Kicking up a fuss is what the union movement needs to do in opposition to National's anti-worker laws. The rallies in Auckland, Wellington. Christchurch and Dunedin were the first round of a hopefully ongoing union campaign (more info at http://fairness.org.nz/). The Council of Trade Unions (CTU), which brings together most New Zealand unions, is playing a leading role in mobilising opposition to the law changes.

National's attacks on workers' rights are part and parcel with their commitment to neoliberal economic policies. Since the 1980s government efforts to weaken workers' collective power have gone hand-in-hand with privatisation, financial deregulation and changes to the tax system that have favoured the rich. The result: massive income inequality and generational poverty.


ALTERNATIVE ECONOMIC STRATEGY

We desperately need a change of economic direction. And that’s what a new document drafted by the CTU potentially offers. The CTU's ‘Alternative Economic Strategy' is a fundamental rejection of neoliberal policies.

Because the strategy document has come from the leadership of a mass organisation like the CTU it has a chance of gaining traction in the real world, especially - as our UNITY leaflet argues - if it's linked to popular campaigns like defending workers’ rights and Tax Justice.


TAX JUSTICE

The Tax Justice campaign is an initiative of Socialist Worker and the Alliance Party. The campaign focus is a jointly sponsored petition that calls on parliament to:

1. Remove GST from food; and

2. Tax financial speculation.

Click here to download the petition.

The petition's demands cut to the heart of neoliberalism in the wake of the global financial crisis. The demands are also proving popular. Since the Tax Justice campaign was launched on 22 May over 7,000 signatures have been collected (in the middle of winter) by mainly Socialist Worker and Alliance members. 1,900+ people like the campaign's Facebook page. To join go to http://www.facebook.com/pages/No-GST-on-food/119541161411953?ref=ts

We want the campaign to take off in a big way. To do that we need to broaden the people and organisations actively involved. We are very interested in support from unions and unionists. This campaign could link up with the union mobilisations against National's attacks on workers. As we say in our leaflet: "[W]e have an opportunity to come at them from both sides. Combine the campaign for Tax Justice with mass action to defend workers’ rights and you’ve got the ingredients for a popular fightback."

That would certainly be kicking up a fuss, which is what the times demand.


A WORLD IN CRISIS

Most serious economic commentators (from a variety of political perspectives) recognise that the world economy has entered a period of prolonged crisis which it might be impossible to stabilise. The world's resources are fast being depleted, which will send forth massive economic shock-waves. While the urgency of the climate change threat weighs heavily on us all. The extent of the threats facing humanity are analysed in Grant Morgan's compelling essay 'Beware! The end is nigh!': Why global capitalism is tipping towards collapse, and how we can act for a decent future advertised in our leaflet.

The sobering realities of a world in crisis and transition requires us to organise collectively today to help secure a future. Socialist Worker believes popular campaigns targeting neo-liberalism, which are linked to the holistic economic alternative that is the essence of the CTU's strategy, presents us with a way forward.

We welcome feedback on the ideas raised in our UNITY leaflet. Please circulate it and the Tax Justice petition to your union contacts.

If you would like to give support to the Tax Justice campaign get in touch with me now.

In solidarity,

Vaughan Gunson
Socialist Worker national chair
& Tax Justice campaign coordinator
021-0415 082
svpl(at)xtra.co.nz

The land of 15% GST

John Key’s other New Zealand flag

by Vaughan Gunson
Tax Justice campaign coordinator
10 June 2010

On 1st October a long black cloud is going to descend on the lives of grassroots New Zealanders. GST will increase from 12.5% to 15%, making everything more expensive. The new rate puts New Zealand in the top bracket of countries with equivalent taxes on goods and services (see http://en.wikipedia.org/wiki/Value_added_tax).

On the same day, the National government’s other tax changes will come into place, including across-the-board lowering of income tax rates.

For low-to-middle income people the small improvements in take home pay resulting from the tax cuts will be mostly wiped out by the increase in GST on food, electricity, clothing, rates charges, and other items that must be accounted for in weekly budgets. As has been widely reported, it’s the rich and wealthy corporates who get the most out of the tax cuts.