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    Essential Information on an Essential Issue

    Letter No.7

    20 December, 1994

    Feedback on the Employment Taskforce Report

    More job losses are predicted in manufacturing after the announcement of further tariff cuts on imported goods. Most hit will be the carpets, apparel, footwear and motor vehicle industries. The new policies continue a tariff-cutting process that began under Rogernomics in the 1980's, and are reported to be the biggest percentage reduction in tariffs New Zealand has ever had.

  • Overall guide to the tarrif cuts : (a) Goods with tariffs over 20% will be set at 15% by the year 2000. (b) Goods with tariffs of 15-20% will fall to 10% (c) Goods with tariffs under 15% will fall to 5% (with exception of Motor vehicle parts which will drop to 10%) (d) Goods with 5% tariffs will no longer have a tariff.

    Examples: Now July 1996 July 2000
    Imported Cars 30% 25% 15%
    Clothes 35% 30% 15%
    Shoes 39% 30% 15%
    Tyres 20-30% 15-25% 10-15%

  • The footwear and clothing industries in New Zealand still employ more than 28 thousand people. Murray Rae, of the Apparel and Textiles Federation says that while consumers might get a `mini bonanza" from cheaper omports, NZ clothing manufacturers wanted a fair deal and tighter customs protection against the dumping of goods on the NZ market. He also warns that the low tariff environment could discourage further investment. Nigel McKinley of the Footwear Manufacturers Federation says it will face the challenge of making more quality shoes, but urges government to take more steps to reduce the cost of doing business by cutting tax levels, collection and compliance costs.

  • The government's new tariff policies should match the 5% rates which will prevail in Australia by the year 2000. Bob Edlin writes in the Independent that more than 90% of NZ imports now come into the country duty-free and without import quotas. The rest are subject to tariffs, the great bulk of them at 15% or less. NZ tariffs are at a level similar to those in European Community Countries, the United States, Australia and Japan. Edlin says they are significantly lower than tariffs imposed by South-east Asian countries.
    Source - The Dominion 17/12/94, Manufacturer fears job losses if tariffs are cut by Cathy Bell, The Independent 16/12/94 Tariff cuts on the cards for '96 by Bob Edlin, The Dominion 16/12/94 Tariff cuts for shoes, cars, Daily News 17/12/94, Free trade reality hits home as Gatt gets closer, , The Dominion 17/12/94 Vehicle assemblers keen to export, but say tariff a challenge, Daily News, 17/12/94 Tariff cuts a challenge to industry, , New Zealand Herald 17/12/94, Tariffs set to tumble, , New Zealand Herald 17/12/94 Tariff cuts sacrifice many jobs by Andrew Stone

    Social Welfare and Employment measures announced in the last fortnight --

    The student allowance, the sickness benefit, the job search allowance and the training benefit are all abolished for 16 and 17 yr olds, from Jan 96.

    Family Support to be increased to low-income families with 16 and 17 yr olds from $42 per week to $55 per week, from Jan 96.

    An extra 3000 places on subsidised job training and work experience programmes.

    The dole will be stopped for anyone who refuses to attend two training courses.

    An individualised assistance programme called Youth Action will be introduced for school leavers who register with the Employment service and cannot find work after 12 weeks.

    A new category of special needs grant has been introduced to help beneficiaries with the costs of moving into work. The non-refundable grant will give up to $250 for initial work travel and childcare costs, work clothes or equipment, relocation costs, or to tide over the gap between benefit and wages payments.

    The unemployed can stay longer in short-term work without being penalised by stand-down periods for the dole. Beneficiaries can now work for six months (changed from 3 months) before the two-week stand-down provision applies.

    Maximum annual food grants for single people will rise by $50 to $200, for married couples without children by $100 to $300, and for families with three or more dependents by $250 to $550.

    From April 95, an increased funding package to budget advice agencies of $938,000.

  • There are more than 8 thousand 16 and 17 yr olds receiving the benefits and allowances that will be abolished for their age group in a year's time. No person now under 18 yrs will be effected by the measures, but for new applicants from 1996, only two benefits will be available to them - the invalids benefit (paid mainly to intellectually handicapped), and the independent youth benefit (now $112/wk) which is presently paid to 3014 young people who live away from home because of family breakdown.

  • Young people on the independent youth benefit will be the subject of six pilot programmes aimed at getting them "into work training or further education and help them to deal with emotional, family or other problems." The programmes will be run in Kaitaia, Henderson, Palmerston North. Wanganui, Dunedin and Invercargill.

    Labour's Judy Keall of Horowhenua, is credited as being a driving force for the Bill that allows the unemployed to work in short-term jobs longer before the two-week stand-down penalty applies in getting back on the dole. A man in her electorate had his benefit cut for two weeks after ending a Taskforce Green job. Labour's social welfare spokesman, Clive Mathewson, questions whether any stand-down provisions are necessary, even after six months. Mathewson : " We don't need any cutoff point at all. It would make it easier for people to move in an out of the economy. At present there is a clear disincentive for people on the unemployment benefit to take temporary work..."
    Source - New Zealand Herald 7/12/94 Two-week dole loss curtailed, NZPA
    The Social Welfare Reform Bill, introduced earlier this month, contains many provisions that will effect the payment of special benefits, advance payment of benefits and special needs grants. Up until now, these forms of assistance have been discretionary ... Income Support has been able to take into account the individual circumstances of the applicants situation, and decide whether the grants are warranted. The Bill proposes to remove these discretionary powers and govern them by a number of regulations.

    Ivan Sowry, of the Aotearoa network of Unemployed and Beneficiaries says that this is a similar approach to that taken by Government to Accident Compensation where it removed discretion under the 1992 Act, and made payments subject to regulation. This regulatory approach was wholly condemned in the report of the ACC Review Committee as unfair and unworkable. The government has since backtracked and says it will return ACC to a discretionary approach. Sowry : " The Social Welfare reform measures will prove to be just as great a disaster for beneficiaries as it has been for accident victims..."

    Wyatt Creech is developing plans to reduce the compliance costs imposed on businesses, for example, by government taxation, income support and information-gathering regulations, health and safety requirements, resource management and building consents. Reducing the costs of compliance was one of the recommendations of the Employment Taskforce report which said government red-tape was a handicap to business development and economic growth. Creech has released a document setting out plans for reductions from 16 government departments.
    Source - The Dominion 16/12/94 Plans try to cut costs of compliance by Catriona MacLennan
    People registered with NZ Employment in November show a rise in unemployed of 1506 to 174,057. This figure was 14.9% lower than for the same time last year.

    One hundred long-term unemployed young people are undertaking the Army's latest Operation Krypton course, a trebling of the numbers on these courses since they began in May last year. Operation Krypton is getting good results with more than two-thirds of trainees getting jobs or going on to further training. The next Army course begins on Jan 31, and the Airforce course on Feb 22.
    Source - The Dominion 24/11/94 Military Courses for Jobless grow by Anamika Vasil
    There's been in-fighting at the OECD as to who will be their next secretary-general. Amidst member vetoes of various candidates for the job, Frenchman Jean-Claude Paye (who ended his second five-year term in the job in September) has been asked to continue for 18 months. The OECD has an annual budget of $382 million and a staff of two thousand which provides economic analysis and research for the member states. One of Paye's unfinished jobs is to complete a big study on unemployment which will go to a Ministerial conference in May 1996. The study will provide policy guidance on a country-by-country basis for the OECD membership.
    Source - The Dominion 14/122/94 World leadership struggle may have strangled OECD by Colin Narbrough
    A group of Wellington activists from the peace, environment, unemployed and beneficiaries, education and health movements are organising a seminar on skills for activism. The Activism in Aotearoa workshops will cover areas such as campaigning, using the media, research, effective meetings and conflict resolution, and movement building. Dates : January 20-24. Venue : Brookfield Camp, near Wellington. Contact : P.O.Box 11-578, Wellington or phone 04-382-8146.

    Shona Butterworth, the principal of the Open Polytech and also an Employment Task Force member, says that introducing `broad-based' qualifications will avoid skills shortages such as those being faced in the construction industry. She told of the Dominion that urgent government action was necessary to stop a fragmentation of training into narrow vocational areas. She says that the existing strategy of Industry Training Organisations, each responsible for funding their own training needs, was too narrow in its focus. Her example : The carpentry and joinery industries were funding training specific to their own areas without recognising skills common to both. This prevents people switching from carpentry to joinery or bricklaying because separate qualifications were needed for each. Her recommendation : There should be a generic `construction' qualification allowing people to learn transferable skills.
    Source - The Press, 24/12/94 Funds boost for apprenticeships `too little too late', NZPA
    Paid parental leave is the campaign of "12 Weeks", a coalition which recently provided Parliament with a 12 thousand signature petition calling for paid parental leave legislation. "12 Weeks" cites that there are 100 countries currently providing some form of paid parental leave. Currently NZ law provides for parental leave, but not on a paid basis. The coalition's goals include 12 weeks paid parental leave after the birth or adoption of a child, and that payment be set at 100% of the average male wage. The scheme, estimated to cost $120 million annually could be paid either through general taxation, through social insurance or an employer levy.

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