Key announces employment "do-fest" summit

Wednesday 14th January 2009

Prime Minister John Key announced a summit meeting on employment next month to discuss ways to counter rising unemployment amid the economic slump.

"I don't want this to be a talk-fest, I want it to be a do-fest," Key told journalists at a media conference in Auckland. Unions and business groups will be invited to attend the summit in Auckland, he said.

The announcement comes after figures showed companies are the gloomiest about their own activity since 1970, with one in three planning to lay off workers. Unemployment is currently 4.2% and the Treasury predicts the rate will rise to 6% this year. Some economists and employer groups predict the jobless rate could reach 8% or even 10%.

Key said his government is planning "a rolling maul of initiatives where we are looking to provide confidence and support to the New Zealand business community." He has called senior ministers to a meeting at the Beehive in Wellington tomorrow to discuss the economy.

He also defended the government's first 100 days programme, saying: "We've got one of the most stimulatory economic positions of any government taken."

Standard & Poor's yesterday cut the outlook on New Zealand's AA+ foreign currency debt rating to 'negative,' citing the nation's ballooning current account deficit and the prospect of ongoing budget deficits.

New Zealand's dollar has tumbled to 55.62 US cents today from 59.59 cents on January 8. Signs of a prolonged slump have prompted economists to forecast a larger cut to the official cash rate on January 29, with Westpac banking Corp. predicting a 100 basis points cut to 4% and a rate as low as 2.5% by mid-year.

By Jonathan Underhill

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