New Zealand holds jobs summit to save, create jobs

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(Xinhua)
Updated: 2009-02-27 10:10

WELLINGTON -- New Zealand Prime Minister John Key opened the first ever job summit in Auckland on Friday, saying unemployment would grow in the coming year as the world recession bites.

More than 200 leaders of New Zealand's business sector, trade unions and community organizations attended the job summit to discuss ideas to protect and create jobs as the economy was hit by the international financial crisis and ongoing recession.

Key said in his opening speech that the government was looking for practical, achievable steps that could be taken to save and create as many jobs as possible.

Key told participants they already knew how difficult economic conditions were and he was not going to spend much time talking about it.

"Our job today is not to promise the impossible," he said. "But we can all play a part in lessening the blow."

He called for action, saying the summit was not a "convention of forecasters".

Reserve Bank Governor Alan Bollard told the summit he was prepared to cut interest rates further if it was necessary and gave a warning to banks that they had to play their part in tackling the economic downturn.

"We are facing the biggest destruction of global wealth the world has ever seen," Bollard said.

He estimated that around the world the amount of wealth destroyed included 2 trillion NZ dollars (US$1.1 trillion) in credit, 30 trillion NZ dollars in equity markets, 4 trillion NZ dollars in housing and 3 trillion NZ dollars in lost output.

Ideas already floated included troubled firms going to work four-days a week and having the government subsidize the fifth day while workers do training or community work.

Those in the building industry have asked for subsidies for wood frame homes arguing it will boost both the construction and forestry sectors.

Those at the summit have been presented with a grim picture of the state of the economy and the government books, as well as the future outlook.

All the indications from New Zealand's major trading partners were gloomy with rising unemployment and massive uncertainty about the health of the world's financial and wider economic sectors.

The government was projecting that it has to borrow 40 billion NZ dollars over the next three years, creating a massive increase in debt.

In a related development, business confidence in New Zealand has continued in the doldrums at the start of 2009 with one in three firms now expecting to shed staff.

The National Bank's first monthly survey of the year shows pessimists outnumber optimists, with a net 41 percent of businesses expecting the economy to worsen over the coming year, a drop of six percentage points.