Prime Minister John Key has lashed out at claims by Reserve Bank Governor Alan Bollard that the Government’s goal of closing the wage gap with Australia is unrealistic.
The Government has set itself a target to close the gap, running at about 30 percent, by 2025.
Dr Bollard said he didn’t think it was possible because of the accessibility of Australia’s minerals – they could be mined without anyone becoming upset.
Speaking at his post-cabinet press conference, Mr Key said he is not going to “write New Zealand off”, but admitted Dr Bollard’s comments about Australia’s mineral wealth couldn’t be denied.
“Only a fool would say otherwise.
“Does that mean though, that New Zealand can’t close the gap… I would say no.”
Mr Key said there were a lot of difference factors at play. New Zealand’s advantage was its abundance of water.
Australia had the same resources it has today thirty years ago, and wage rates were equal, he said.
“It’s a substantial challenge, but I don’t think we should be as fatalistic as to say we can’t do it.”
“There's plenty of capacity for us to use water more effectively. Irrigation presents huge opportunities, there's I think a million hectares of land that could be irrigated properly and that would have quite a substantial impact on our GDP."
Mr Key had earlier described the comments made by Dr Bollard as negative and wrong.
"It's a fairly negative view about New Zealand's future and I don't agree with it," he said.
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