Unions say it will take more than building new roads to lower the 17.3% youth unemployment rate – suggesting those in trades academies may end up chasing work in Australia.
But Prime Minister Christopher Luxon believes infrastructure projects will bring jobs and help address youth unemployment, which is at a three-decade high.
In this year’s Budget, the Government revealed it will spend more on trades academies and increase the number of funded trades academy places from 10,000 to 20,000 over the next four years, funded by the cancellation of the fees-free policy.
At a recent visit to a trade academy site, Luxon said: "We've got a massive investment in infrastructure with $7 billion of capital projects underway that are job rich."
"Last week you saw Treasury forecasting 220,000 new jobs in our economy over the next four years. We need young Kiwis with the skills to fill those jobs."
He also suggested some Kiwis were disappointed with Australia.
"I was on a site just last Friday actually and they were doing a recladding job, and two of those five builders had come back from Newcastle because they'd gone to Australia [and] discovered that actually housing is a lot more expensive."
'There aren't the jobs' - union
However, New Zealand Council of Trade Unions president Sandra Grey argued Australia’s pull is still strong.
"There has been a huge flight from New Zealand because there aren’t the jobs.
"The pay is much better in Australia, and of course we’ve just widened that gap because we had a very tiny minimum wage increase, and they’ve had a really big, significant change to the minimum wage," she said.
From July 1, Australia’s minimum wage will rise to AU$26.44 (NZ$31.96) per hour, up from AU$24.95 (NZ$30.16). New Zealand’s minimum wage increased on April 1 to $23.95, up from $23.50.
Grey also put doubt on how much the new infrastructure projects would help the youth unemployment rate – and raised concern over planned public service cuts.
"The thing is they are putting some money into infrastructure projects at the same time as they're doing massive cuts to public services from Kaitaia down to Invercargill with around 9000 jobs going from the public sector."\
"We've got to do more than just invest in a couple of roads."
'On the cusp of a recovery' - economist
New Zealand Institute of Economic Research principal economist Shamubeel Eaqub said the youth unemployment rate is "absolutely" high right now – but a recovery could be on the way.
"When you look forward for the next two, three, four years, we should get a recovery. We are on the cusp of recovery and once one of those global risks fade, New Zealand will get better."
He said people on building sites or in cafes, should benefit.
"So, when an economy recovers, the things that really take off are things like retail, hospitality and construction. They're super cyclical. So, they feel the downturns the most and they feel the recovery the most."
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