Essential Information on an Essential Issue
1 April, 1996
- RISE IN UNEMPLOYMENT PREDICTED
The Reserve Bank predicts that the unemployment rate, now at 6.1%, will rise to 6.9%
and remain there over the next two years. In its latest economic forecast statement, the bank says
that the increase in unemployment will come not from redundancies, but "... from the
economy's failure to create enough jobs to absorb the growing working age population."
Source - New Zealand Herald 22 March 1996 "Gloomy Brash keeps the brakes on."
- END OF EXPORT LED GROWTH
Five years of export-led growth has come to an end according to the Auckland
Manufacturers Association chief executive Bruce Goldsworthy. As reported in the last Jobs Letter, the
Association's recent survey of business conditions showed more than half the respondents
bracing themselves for declining profits and more job cuts. Goldsworthy attributes the fall-off in
export sales to the rising NZ dollar, the `softness' of the Australian economy and a fall off in
international prices for manufactured goods. Auckland export sales are 18% lower than last year and
nearly half of those responding to the Association survey stated they had reduced staff numbers. In
the next three to six months 3% expect to increase staff, 80% expect to staffing to remain the
same, and 13% intend to shed staff.
Statistics NZ reports that export levels have fallen 8.2% in the year to February, as compared
to the year ending Feb 1995. At the same time, imports have risen by 6.6%. The deficit for
the period was $860 million, contrasted to a surplus of $507 for the year before.
Sources - New Zealand Herald 27 March 1996 "Trade Surplus down as exports fall 8.2%" and "Manufacturers' export
- CAR PLANT THREATENED BY TARIFF REMOVAL
The Engineers Union says that at least 600 workers in the car manufacturing
industry would be out of work next year unless the government can be persuaded to retain tariffs
on imported cars. Ford and Mazda said last week that they expected to close their car assembly
plant in Wiri, Auckland, unless there was a shift in government policy. Tariffs on imports were
dropping 2.5% each year and are expected to be completely removed by 2010. This was leading to
the increased importation of new and used vehicles, and threatening the viability of local
assembly plants. The union is joining with the car-makers to try and convince government to retain
the tariffs, or to slow down their removal.
Source - The Dominion 20 March 1996 "Falling tariffs may cost 600 jobs, says union"
- VETS IN SHORT SUPPLY
There is a national shortage of veterinarians which is putting stress on existing services
and forcing some clinics to look to South Africa and Australia for staff. The shortage could become
a crisis if the expected busy spring eventuates, and if the dairy boom continues. But, according
to the Veterinary Association, there is also a pool of up to 140 overseas-trained vets in NZ,
who were either on the dole or working in lower-skilled jobs because their qualifications as vets
were not fully recognised here. Association president Dr Catherine Smith says that the immigrant
vets had been mistakenly led to believe that their qualifications would have equivalence in NZ,
when in fact they would have to complete the full NZ university course.
Up to 500 overseas-trained medical practitioners are also claiming unemployment benefits or
are working in other professions because they too had migrated on the false impressions that
their qualifications entitled them to work. According to Alison Tocker of the Dominion, most of
these doctors found they could not work without sitting a Medical Council exam that most of
them failed to pass the first time.
Source - The Dominion 26 March 1996 "Qualification conflict cited in vet shortage".
Question: Shouldn't the NZ Qualifications Authority under its new `framework' be
helping overseas-trained vets and doctors get recognition of their prior learning and experience?
- JOB CONNECTION PILOT STARTS
The pilot fully-funded work scheme Job Connection announced in the
Government's response to the Employment Task Force is to get started in Gisborne, Whangarei,
Invercargill, Lower Hutt and North Taranaki. The scheme restricted to 100 people nationwide and is only
for people who have been out-of-work for more than four years.
Source - The Daily News 26 March 1996 " NP in trial scheme to help long-term jobless.
- WAGE RATES SURVEY
A survey of wage rates since the introduction of the Employment Contracts Act by
the Institute of Economic Research shows that 43.5% of employers reported either lower or
unchanged ordinary time wage rates since 1991. Overtime rates had been cut by 42.6% of
employers and similar numbers had frozen rates. Allowances and other penal rates had been reduced
by 40% of employers and frozen by another 44% of employers.
CTU President Ken Douglas comments: " This is an incredible five-year wage freeze applied
by nearly half of all employers, despite a prolonged economic expansion and high levels of
Source - The Dominion 22 March 1996 "CTU blames Contracts Act for shrinking wages, benefits."
- WAGE GAP GROWS
Women's wages. Figures from the Ministry of Women's Affairs show that more women
are entering the paid workforce. Since 1991 an additional 60,000 women have entered full-time
jobs, and 31,000 women have taken up part-time work. But while more women are working,
their wages continue to fall behind the wages of men. In the last year there has been a 5% increase
in the gap between the average pay of men and women. A year ago, men earned on average
$178.65 per week more than women. The latest figures show the gap to be $188.85.
Source - Socialist Worker 18 March 1996 "The worth of women's work"
- WELFARE REFORM ADVOCATED
A complete reform of the welfare system in NZ is advocated in a controversial new
book From Welfare State to Civil Society: Towards Welfare that Works in
NZ. The book, which has been published with the support of the Business Roundtable, is by Dr David Green of the
London Institute of Economic Affairs, and contains a new blueprint for the future of state welfare in
this country. Green says that present welfare policies were failing those they were designed to
serve and perpetuating more problems than they solved. He says it is no longer valid to tolerate
"manipulations of the benefit system", and he suggests that the onus of a new regime should
be pushed back onto the individual, and that community organisations should provide more
Among the book's proposals is a policy to encourage unmarried mothers to live with their
parents or in supervised accommodation "...preferably provided by voluntary associations that will
take responsibility for bringing out the best in the mother and baby."
The book has already come under criticism from welfare groups. While welcoming
the discussion of social policy that this book will generate, the Council of Social Services'
David Robinson says that to be effective, social policy needs to be developed in consultation with
all relevant community groups. He says that Dr Green had ignored attempts by the Council to
discuss this book while it was being researched. Voluntary Welfare Organisation executive
director Ross Grantham says that community groups were "sick of being told they ought to pick up
the pieces of growing social distress, while government policies made it harder for them and
their clients to survive..."
Source - The Dominion 26 March 1996 "Volunteers and homeless agree welfare debate needed" and New Zealand Herald
25 March 1996 "Book proposes welfare restructure"
The Business Roundtable has also released a paper of its own called
Moving into the Fast Lane, which is essentially its own "vision statement" for NZ. Its prescription includes
amendments to the Employment Contracts Act to remove personal grievance "anomalies", reform of
holidays legislation, a greater focus on education and training, and a radical downsizing of the
It also says that superannuitants are paid too much and should have to wait until they are 70
to qualify; domestic purposes beneficiaries should get their money from the non-custodial
parent where possible and lose the benefit when their children pass aged 12; the unemployment,
sickness and invalid benefits should be replaced with insurance or an income-contingent repayable
loan scheme; in the meantime. the unemployed should have their dole axed after six months and
be enrolled into training programmes; sickness and invalids beneficiaries need better vetting, and
the minimum wage should be abolished so many of the unemployed can price themselves into jobs.
Source - The Independent 22 March 1996 "Mini State Maxi Society. The Roundtable moves into the fast lane."
- TOUGHER LINE ON BENEFICIARIES
Since last September, Income Support has been toughening up its checks on the
medical condition of sickness and invalid beneficiaries, in order to encourage them back into work. But,
as Mike Booker reports in the Independent, the effects of the tougher line does not seem to
be having the financial impact that Social Welfare Minister Peter Gresham was hoping for.
According to Booker, although fewer people are applying to get on the benefits and "hundreds" have
been booted off the benefits, the department is "not on target" to reduce its costs by $8.8 million in
this financial year. Booker reports that 5.8% or one in twenty work-age NZ'ers are not fit for
work. Since the mid 1970s, invalid and sickness benefit numbers have risen more than 300% despite
no significant changes in eligibility criteria.
The figures: At the end of January 1996, nearly 103,000 NZers were either on the invalid
and sickness benefits, or on ACC. There are 41,000 on invalid benefit (paid to those permanently
out of the workforce), 33,000 on the sickness benefit (paid to those with temporary
incapacitation), and 29,000 on ACC (paid 80% of their income as an earnings-related compensation for the
loss of ability to work as the result of an accident).
Booker says there is a financial incentive for anyone out of work to go on sickness and
invalid benefits rather than the dole. For example, a 25-yr old single person on the invalids benefit
receives $173 a week, compared to $144 on the sickness benefit and $138 on the dole. He
believes that `malingerers' have a more comfortable existence on the sickness and invalids benefits
because "...they will not be called upon to do training or apply for a job."
Source - The Independent 15 March 1996 "Malingering The Kiwi malaise"
- SEASONAL WORK GUIDE SET TO BECOME STANDARD
A comprehensive guide to seasonal work in NZ has just been published by
brother-and-sister travellers Gary and Heidi Andrews. The book gives a wealth of advice and
background information on the estimated 40,000 seasonal jobs available from Kerikeri to the Bluff in
sheep shearing, market gardening, orchards, vineyards, skiing and tourism work. It is designed as
a practical on-hand work guide with tips on how to get the work, useful contacts and
addresses, regional labour demands, payrates, transport and accommodation, plus detailed maps and
seasonal work charts included. This book will no doubt become a standard purchase for
people visiting this country on short-term working holidays (see next item), but also for a
growing number of people who are making seasonal work their full-time livelihood.
Seasonal Work in New Zealand by G and H Andrews, available from Andrews Publishing P.O.Box 8052, New Plymouth.
- BACKPACKERS LOBBY FOR CHANGES TO WORK RULES
Backpackers lobby groups are pushing for the government to change its restrictions
on working visitors, saying that NZ could be missing out on a multi-million dollar backpacker
windfall because of the current visa system. Current rules allow fewer than 4% of the country's
annual intake of 73,000 backpackers to work legally. The Backpackers Accommodation Council
says that the government should follow the Australian example of issuing more working visas with
the anticipation that the travellers will spend most of their money here in NZ anyway.
This year, Australia will issue a maximum of 38,000 one-year working holiday visas. These
visas include a clause banning people from working for longer than three months in any one place as
a way to safe-guard native Australians long-term job prospects. A recent Australian survey
of working holidaymakers showed that the backpackers on these visas were staying longer
and spending as much as $15,000 per person on their stay in Australia. In comparison, NZ
Tourism Board figures show that our backpackers were staying for an average of 46 days, and
spending only $2,700 each.
Campbell Shepherd of the Backpackers Council dismisses suggestions that changing NZ
visa regulations would take jobs away from NZers. Shepherd told Sunday Star-Times: " They want
the jobs that Kiwis don't. You ask the fruit-growers... The feedback I get from travellers is if
they could work here rather than Australia, they would..."
Source - Sunday Star-Times 11 February 1996 " Backpacker `windfall' lost to NZ."
- TRENDS: CONTRACT WORK STRIKE
Throughout the US last month, General Motors plants were at a standstill
as 65,000 GM workers went on strike. Their strike was not so much about their present wages
or conditions, but about the future of their work. The source of their dispute: the continuing use
of cheaper outside contractors or "outsourcing" to make car components presently made within
the GM plants.
The GM company pleads that it is no longer competitive, and it is trying to save on labour
costs compared to other US manufacturers who use much more outsourcing. Figures show GM
makes only $413 profit on every vehicle it sells, compared to Chrysler making $2,200 per vehicle.
Seventy percent of a GM motor vehicle is made by GM workers making $40/hr (including
benefits). Only thirty percent is sent to outside contractors. A Chrysler vehicle shows almost
the reverse picture with its $40/hr workers only making thirty percent of the vehicle, while the
remaining seventy percent of the vehicle is sent out to outside contractors making half as
much wages, or less.
Source - ABC News 12 March 1996 lead story
- "REBIRTH REFERRAL SERVICE"
The Rebirth Referral Service (RRS) offers a unique facility for people in the workforce
who are worried about their job prospects after their next re-incarnation. The Service offers a
solution to the age-old dilemma : What chance does a returning soul have of landing a great paying job
? The RRS makes returning to the physical world much easier. Chief Executive Officer
Michele Flack says that they can guarantee that their clients can come back and move into a decent job,
at a good salary, without having to "start at the bottom" for yet another lifetime. The client signs
up with the service and pays a one-time fee. When the client dies, the RRS contracts a team
of Tibetan lamas to track the client to their next reincarnation. Once their location has been
found, the client will be directed to an employer that has already been pre-approved.
Flack: " How many times have you worked part-time odd jobs at a low wage? Maybe you
were an assistant goat-herder in Greece, a limestone quarry clean-up boy in Egypt, a pot-washer
in medieval Europe, or a stall mucker in the wild West. If you're like most folks, you won't care
to go through that again. Now you can start out in your next life in a comfortable position..."
Rebirth Referral Service phone 0800-555-679. Jobsletter subscribers are advised to check
the date of this issue before making direct contact.
Source - based on a clipping sent to the Jobs Letter by Michael Fleck
"The result of Moving into the Fast
Lane] would be a government taxing less, spending
less, owing less and providing less a bit player in a society where the real decisions are made in
the comfortable homes and boardrooms of a wealthy "civil society" able to look after itself
pretty well, thank you very much, while retaining a safety net for those who really can't look
— The Independent columnist Steve Evans, commenting on the Business Roundtable's
`vision statement' for NZ.
Top of Page
This Letter's Main Page
The Jobs Letter Home Page |
The Website Home Page
The Jobs Research Trust -- a not-for-profit Charitable Trust
constituted in 1994
We publish The Jobs Letter