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    Essential Information on an Essential Issue

    Letter No.28

    9 November, 1995

    Views on the October 1995 Government Jobs Package

    The feed-back rolls in over the Government Jobs Package announced last month. As employment activists and community groups get to grips with the `fine print' on the new policy announcements, there are many disgruntled voices over the content of this package. The Jobs Letter has surveyed a cross-section of our community and private-sector subscribers to get their views on the government package. We print their feedback as a special feature in this issue.

    Labour's Social Security spokeswoman Annette King says that the government has deceived beneficiaries in their changes to the abatement system. While the allowable earnings before abatement rates cut in had been lifted from $50 to $80 a week, the government has not introduced the `low abatement' range between $80 and $130 that was recommended by the Employment Taskforce. Instead, beneficiaries earning more than $80 a week would go straight on to a 70% abatement rate.

    King : "National made a big song and dance about changing their current system of abatement. However the fine print of their Focus on Employment document reveals the government has only introduced half the Employment Taskforce recommendations on abatement for people on unemployment, training or sickness benefits..."

    Source - The Dominion 27 October 1995 "Beneficiaries deceived, King claims"

  • Employment Minister Wyatt Creech is unmoved by criticisms of the new two-tiered abatement system that means that unemployed people will receive less of their earnings than other beneficiaries. Creech told the Dominion : " A totally different situation exists for the 135,000 people on unemployment benefits. Encouraging them to work part-time would be stupid. They gain most by moving off the benefit into full-time employment."
    Source - The Dominion 27 October 1995 "Beneficiaries deceived, King claims"
    Patrick Smellie, the NZ correspondent for The Australian, believes that the current 26-week stand-down rules for unemployed beneficiaries who fail the work test are perceived by Social Welfare staff to be so harsh, that many of the bureaucrats have refused to administer them. Writing in the Independent, Smellie quotes Social Welfare Minister Peter Gresham at the Beehive launch of the package saying that "Its perceived harshness was contributing to an ineffective work test. This less harsh graduated sanction is more likely to be applied..."

    Patrick Smellie: "In other words, our own bureaucrats won't administer this policy, so we're ditching it. However, it is something of a mystery as to why this current, dishonoured stand-down policy will continue in force for another 18 months, until April 1997.

    Source - The Independent 27 October 1995 "Bolger's first election salvo: A modest war on unemployment" by Patrick Smellie
    The Alliance leader Jim Anderton is highly critical of the government's announcement that the spouses of certain unemployment beneficiaries as well as certain women receiving DPB and Widow's Benefit will be required to seek work from April 1997. Anderton: " Hidden away in the details of the government's responses to the multi-party Employment Taskforce is this piece of National Government nastiness. This all their own work and was never part of any agreement among the multi-party group."

    Anderton says that the government is effectively holding the wife or husband of an unemployed person responsible for their spouse's unemployment: "Take for example a person who loses their job because the company they work for becomes bankrupt. The Government's response to that is to attempt to force that person's spouse to enter the workforce. The spouses are to be required by the government to pick up the costs of unemployment, when those costs should be born socially."

    Source - fax to the Jobs Letter 19 October 1995 "Anderton Critical of National Government Nastiness"
    A week before the announcement of the jobs package, the government introduced the Youth Income Support Bill, which will raise the age of eligibility for benefits from 16 to 18 years, while it increases family support for 16 and 17-yr old children of low-income families, and amends the criteria for Independent Youth allowances. The changes will come into effect on January 1st 1996.
    Source - The Dominion 16 October 1995 "Labour rejects cut benefits"
    The Lampen Workchoice Day which introduces students to the workplace is appealing for more companies to get involved with this initiative. The organisers are planning for more than 15,000 students to get a taste of working life next April.
    Source - The Dominion 13 October 1995 "Student hopes"
    The Careers Service is going through a major re-structuring which will see it go the first steps of a path towards privatisation. The service will separate into two entities, one of which will have to survive in a competitive market-place for guidance providers. The careers `information' services will be split from the careers `counselling and guidance `service. The information section will be retained by the government which has already embarked on a feasibility study on how to enhance their careers information systems.

    The counselling and guidance resources will become a business unit by the middle of next year, and this whole area will be subject to contestable funding in the future this means other private sector providers of careers guidance will be able to bid for local contracts. Money will be given to schools as part of their operational grants to enable them to buy careers advice and guidance. These schools will have to produce a document of good practice in career education, which will be audited by the Education Review Office.

    Source - fax and research by Ian Ritchie October 1995
    The Labour Party tried to beat the government jobs package to the draw in announcing its own refurbished employment policies just two days before the government announcements. Labour believes that, even with economic growth, we will have the current levels of unemployment until the end of the century. Labour also rejects what it describes as National's "any job will do" philosophy, and will work to ensure that all those who want a job can not only find one, but find one that matches their needs.

    Under Labour, the dole would be time limited to six-months, after which people would be given work, training or access to education. No-one who leaves school would become unemployed, and the dole for people under 20 yrs would be replaced with a training wage. Labour would increase public spending on infrastructure projects like state housing, and set up a venture capital fund to encourage small businesses. It would set up set up community-based employment enterprise schemes to undertake work which is socially beneficial but could be used to employ long-term unemployed. Payment for this work would be at the equivalent of the dole. A Green Jobs Unit would be set up to encourage the creation of energy-efficient and environmentally friendly jobs, including encouraging the use of possum products. All employers would be required to develop training programmes for their workers. The cost of the Labour strategy for full employment: $125 million in the first year, $155 million in the second.

    Source - New Zealand Herald 17 October 1995 "Labour pledges $155 million for jobs" by Patricia Herbert
    Labour will also encourage more debate on `rethinking working time', as part of a strategy to reform working hours. To this end, it has produced a discussion paper Rethinking Work, which it hopes will lead a political discussion on the value of changes to working arrangements. Labour will refrain from actually legislating for a four-day week, but plans to establish a Rethinking Working Time (RWT) Unit that will research the issue, consult with businesses, and develop policy for government. The unit would administer a small contestable fund which would support workplace reform experiments.

    Labour's Steve Maharey believes that `rethinking work' will be a major issue for families in the 1990s. He says that this decade has seen more parents working longer hours, working weekends, and doing more part-time and casual work. Maharey: "These changing work patterns are directly related to such problems as child abuse and neglect, home-alone cases and problems in schools. If, as a country, we are serious about raising children properly, parents must have time to do a quality job. Parents need quality time, as well as quality time to raise children properly..."

    Source - New Zealand Herald 24 October 1995 "Revamp work time: paper" and Labour discussion paper "Rethinking Work" October 1995
    The future of Industry Training Organisations (ITOs) are threatened after a lack of funds is forcing many large training organisations to consider abandoning their operations, or substantially putting up fees. The Building Industry Training Organisation was one of the first established under the government's Industry training strategy, and has more than 2400 trainees. It says it is critically short of funding, and while the government did raise its funding last year, the funding on a `per-trainee' basis has fallen dramatically. Building ITO chief executive Trevor Allesbrook says that of the $8 million it needed to run its courses, it only got $6 million from the government. Unless it got the balance, it would have to double its fees, or close down a dozen courses. All this comes at a time when there is a serious shortage of skilled workers in the building and construction industries in particular.

    At least three other training organisations the Society of Master Plumbers and Gasfitters, the Motor Industry ITO and the Joinery ITO have also been reported as saying that serious underfunding was throwing into doubt the future of their training courses.

    At the heart of the ITO funding crisis is the government expectation that industries must pick up any shortfall in funding. The trouble is there is no compulsion on industry members to contribute funding, even though they benefit from the training. Most of the government's contribution to funding is channelled through the government's Education and Training Support Agency (ETSA), whose general manager Max Kerr told NZPA that there was no reason why industry should not contribute to the training costs, even if it meant raising student fees. Kerr: " The reality is that everybody else participating in tertiary education is contributing. Why should they be any different?"

    The Labour Party has introduced a private member's bill which would allow the ITOs to ballot their membership and impose levies on industry employers where that is the majority decision.

    Source - The Daily News 24 October 1995 "Industries seek cash for training" and New Zealand Herald 19 October 1995 "Lack of money puts training on the line".

    "Opposition reaction is arguably the most interesting thing about the way the Employment Taskforce has worked out. By engendering multi-party consultation, the government has effectively bound Labour and the Alliance parties to most of its conclusions.
    "Moreover, the government gains most of the political kudos from decisions which it partly derived from the multi-party process, to the point of labelling the Taskforce announcements as the first leg of the tax-cuts package..."
    Patrick Smellie, The Independent

    "Strangely, nowhere in the entire 42 pages of the government's employment document could I find a single mention of the Employment Contracts Act, still less is key role in job creation... this suggests that few of the key figures in the government understand that it is restrictive labour laws which largely create unemployment.
    "If the government was serious about further reducing unemployment, instead of dreaming up new job schemes it would press on to complete the liberalisation of the labour market which the Employment Contracts Act began but did not finish... "
    Hames on Saturday, The New Zealand Herald

    Source - - The Independent 27 October 1995 "Bolger's first election salvo: A modest war on unemployment" by Patrick Smellie; New Zealand Herald 4 November 1995 "Dreaming up jobs" Hames on Saturday column.

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