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    Essential Information on an Essential Issue

    Letter No.8

    9 January, 1995

    How can we turn our 70-million-strong possum pest into a job creation strategy

    Treasury has released its six-monthly update on the government's finances which revises many of the economic projections released on budget night. The most startling is the revision of the government surplus to $2.3 billion (up from a forecast of $1.2 billion). Treasury predicts unemployment to fall more rapidly to 7.6% by June 1995, and to 6.5% by 1996-97. Taking into account population growth, migration and the participation rate in work, the labour force is expected to grow by 30,000 people a year. Treasury says that as unemployment falls, wages will rise as skill shortages increase. It forecasts average hourly earnings to rise 2% in the present financial year, and 3% for each of the three years after this.

    The Tourism Board reports a record 1.29 million tourists coming to NZ with an increase of 14.3% on visitor numbers in the last year. An average of 3,534 tourists visit each day, and they also add $10 million daily to the NZ economy. The Board predicts an extra 100 thousand visitors this year ... fuelling an increase in hospitality and adventure jobs and the construction of new hotels.

    Jobs in organic agriculture look good for 1995 with Watties Frozen Foods continuing its push to export organically grown products. The latest target : Organic spuds, with six growers in the Manawatu and Canterbury signing up to produce the organic spuds at a premium above conventional potato prices. Watties technical organics specialist, Alec McErlich, says that exporting organically grown products was relatively new, but world demand was growing and the premium prices were making it a worthwhile switch for farmers.

    Unemployed nurses in NZ are readily finding jobs in short-staffed Singapore hospitals. More than 100 nursing graduates have found work in the hospitals, which will take as many nurses as the NZ Nurses Society can supply.
    Source- New Zealand Herald 4/1/95 Nurses bid farewell to NZ unemployment by Rochelle Lockley

    The increase in the statutory adult minimum wage will mean a rise from $245 a week to $250, or from $6.125 to $6.25 an hour. It is the first increase since Sept 1990.

    A major survey on prostitution in New Zealand by Massey University researchers Dr Chris Ryan and Rachel Kinder estimates that there are probably 1500 sex workers in Auckland and 400 in Wellington. Prostitution in Auckland is turning over up to $40 million a year, including $12 million from tourists. The average sex worker is earning $500 per week.
    Source- New Zealand Herald 17/12/94 Sex acts earns tens of millions by Andrew Laxon

    The Australian Government also plans to have all young people under 20 yrs in some form of work, training, or education. Policies designed to achieve this, however, are considered to be causing increasing financial hardship and conflict within families, according to Peter McDonald, a consultant to the Australian Urban and Regional Development Review. Job Search and study allowances, apprenticeships, and even some full-time award wages all provide support for young people at a level insufficient to guarantee their independence from their families. This is forcing more and more young people to continue living at home. McDonald reports that the protracted dependence of young people on their parents creates financial and emotional strain on the whole family. Prediction : This will continue to be a source of irresolvable conflict in low to middle income families.

    Fewer employees are participating in employer-subsidised superannuation schemes, despite the government urgings that we should all save more for our own retirements. Employers in NZ spent 3.5% less on fund-matching schemes this year than last, according to Statistics NZ. Some reasons : many workers don't expect to be with their employer long enough to join a super scheme; many workers aren't earning enough to afford this form of long-term savings; super commitments often have strings attached that many workers are not comfortable with.

    Statistics NZ says new building authorisations in November were up 305% on last year. But Treasury predicts that the Auckland home building boom may soon run out of steam due to higher interest rates and the building industry hitting "capacity problems".

    Unemployment is inefficient for the economy as a whole because of the loss of the productive potential of the unemployed. The Australian Social Justice Research Foundation has done the figures for Australia. It reports that unemployment is costing their economy more than $25 billion a year in lost production, and adds another $20 billion to the budget deficit in benefit payments to the jobless and reduced tax revenue.

    A Manukau Polytech student who could not pay his rent has won a legal fight for a special benefit from Income Support. The victory will be shortlived. Income Support is already moving to add amendments to the Social Security Act- due through Parliament early this year - to stop thousands of students taking advantage of this legal decision.
    Source - The Press, 30/12/95, Appeal ruling will allow students access to special nasistance benefits, The Dominion 31/12/94 Plan to alter benefit lawe for students, New Zealand Herald 29/12/94 Benefit decision sounds alarms by Alison Smith

    One of the most urgent requirements in the development of a community sector within the economy will be the drawing up of a legislative framework for community enterprises that gives due recognition to the concept of "community benefit". Community and co-operative enterprises have been finding it hard to hold on to their values in practice and survive within economic systems which have no place for non-commercial factors. John Pearce, leading UK consultant on community enterprises, has called for such a legislative change in Britain and his arguments are equally pertinent here. He says " Legislation that recognises the concept of trading for community benefit rather than individual gain and the principle of non-distribution of profit as personal wealth would form the foundation of a truly new sector in our economy ... "

    We need to develop a social auditing methodology that will permit the measurement of social as well as financial performance, says Pearce. He says this will become a key tool in monitoring the effectiveness of community enterprises. If a community enterprise is to gain some benefit from any special legislation then society has to be certain that both sides of the bargain are indeed being met. Pearce :" Without a social audit methodology, it is too easy for the "realists" to dismiss social objectives as a lame excuse for commercial inefficiency, and it is impossible for the "idealists" to demonstrate with confidence the achievements and values of their sector. A harmonious balance between social and commercial performance will permit wise investment decisions to obtain benefit to humanity and the planet."

    A Social Welfare report prepared by Coopers and Lybrand Director Suzanne Snively estimates the annual cost of family violence at $1.2 billion and "is probably substantially higher". The costs included health bills, legal and housing costs to individuals, and also costs incurred by government departments in health, justice, welfare and the police. The report bases its estimates on family violence affecting one in seven women each year and one in seven children.
    Source- New Zealand Herald 22/12/94 Family violence costing $1.2b a year: report

    We hear a lot about interest rates and inflation, We don't hear so much about the connection between interest rates and debt. Larry Brown, speaking at a Fiscal Issues Conference in Canada makes a very clear connection. "Of the immediate causes of our debt growth, the biggest must have been interest rates, kept too high for too long in pursuit of the goal of zero inflation. This benefited no-one except the banks, and caused a huge increase in both debt and unemployment rates which in tern affected the debt." Brown also has some suggestions on what do we do about high debt levels :"First, take a national valium to calm the debate down and approach the problem logically", he says. "What caused the problem will tell us some things about how to resolve it - lower interest rates, fairer taxes and economic leadership to stimulate the economy, and with increased investment in education, research and development, and jobs."
    Source - PSI Focus

    More community groups are seeking more creative solutions to local employment problems... rather than just running the established government schemes and training programmes. Their initiatives are moving beyond the traditional concepts of self-help and self-reliance, towards creating a greater sense of empowerment amongst the disadvantaged.

    The new buzz-word for this shift of perspective beyond self-help to empowerment is people-centred development. This is defined by the Commonwealth Association for Local Action and Economic Development (COMMACT) in their vision statement which reads : "People-centred development is a continuing process designed to transform existing power relationships by empowering people, their organisations and their communities at local, regional, national and international levels. Such transfer of power to people and communities will enable them to control the decisions and actions which affect their lives. As a consequence, the decision-making powers and processes of existing institutions will be changed. By fostering self-reliance and socio-economic independence, people-centred development aims to increase individual, collective and community self-worth, dignity and security. "

    COMMACT has an active membership here in NZ which contributes to the bi-ennial commonwealth conferences on local employment initiatives. Contact Phyllis Huitema, Hamilton Enterprise Agency, P.O. Box 19-209, Hamilton, 07-838-6517.

    "1994 has been the year of the food crisis. More NZ'ers went hungry in 1994 than at any other time in the last 50 years... The Welfare State needed modification, but the extent to which it has been turned on its head leaves many NZ'ers uncomfortable ..."
    -- Bill Saunders, of the Auckland City Mission and Foodbank Action Group.

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