Shearer calls for investment in education

Labour party leader David Shearer has indicated any future Labour Government would keep a capital gains tax, but ditch a policy meaning the first $5000 of income is tax-free.

And Mr Shearer hinted he would have a more hardline welfare policy, where everyone should be contributing to the workforce if they could.

The Opposition leader used his breakfast speech in Wellington this morning to say the New Zealand economy was too dependent on property market bubbles and farming.

To become a highly skilled export-focused economy, New Zealand has to invest in education _ in particular the quality of teachers and early childhood education, to turn the 83,000 young people not in education or training into a highly skilled workforce.

He said Labour policy was under review and no final decision had been made but described a capital gains tax as "pro-growth''.

"It helps switch investment from sectors such as housing, to the productive sector where we desperately need more capital. Over time I can also see the revenue it raises being used to offset the tax you have to pay in other areas. So I can see a role for (a Capital Gains Tax) in transforming our economy.

"On the other hand, I would want to ask whether a tax-free zone that gives everyone the same sized tax cut is going to be as much of a priority. I believe we can look after everyone better, not by cutting taxes, but by earning more as a country and making sure that everyone gets a real chance to earn their share.''

The focus of his speech was education, including a promise to invest more in teachers and early childhood education.

"Ultimately we can't afford to have bad teachers in our classrooms. As a parent, I want to put badly run schools on notice. I expect excellence from every school.

"Experts agree a dollar spent on a child before five will save $11 spent on crime and welfare later.

"The fact is there are 83,000 young people not in training or work. I want to fix that and the place to start is in education. That's where the opportunities are being missed.

"Everything else is bottom-of-the-cliff stuff.''

Labour's priority would still be to take care of the needy.

"They deserve a share of the pie. And if people fall on hard times, we will help. But equally importantly, number two: everyone who can help to make that pie needs to be involved, and fairly rewarded for doing it.''

- Derek Cheng of the New Zealand Herald

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