Letter No.83
30 July, 1998

17 July 1998

The Labour and Alliance Parties hold an alternative parliamentary select committee hearing on the Community Wage. They receive submissions from church, union and other community groups.

The coalition government makes the first step towards the privatisation of the Accident Rehabilitation and Compensation Insurance Corporation. ACC Minister Murray McCully announces that the Employer's Account will become an independent commercial entity on July 1st next year. The new, unnamed agency will manage work related injuries to employees and work and non-work related injuries for self-employed people.

Jock Barnes, former leader of the Waterfront Workers' Union, publishes his memoirs "Never a White Flag." His book relates the most historic labour dispute in NZ history: the 1951 lockout of waterfront workers. This 151 strike was only broken after the government declared a state of emergency and used troops to clear the backlog on the wharves.

18 July 1998

The criteria for people receiving an invalids benefit tightens. People in receipt of an invalid benefit will now have to prove they will be incapacitated for at least two years, unless they are expected to die before then. Except for blind people, three doctors must verify that an invalid is incapable of working more than 15 hours per week. Most people who are currently on invalid benefits but no longer qualify under the new criteria, will be reclassified as only "sick". The sickness benefit is between $29 - $61 less than the invalid benefit.

19 July 1998

The Indonesian government says that 100 million of its people will be unable to afford food and other basic needs this year.

20 July 1998

Details of the Budget cuts are released by Cabinet. Some of the "cuts" come in the form of increasing user pays charges such as the cost of running a vehicle and tertiary student fees. Other savings are on spending that won't take place such as spending on training incentives for solo parents and reducing government department contributions to the Government Superannuation Fund. The cuts amount to $80m this year and $236m next year.

The OECD reports on a study that shows that teenage jobs are lost when the minimum wage rises. The OECD investigation, done on the 29 member countries, says that a 10% increase in the wage results in a 2_4% increase in teenage unemployment. Council of Trade Union economist Peter Harris disputes these findings by pointing to Spain and France where minimum wages have either been static or dropping. In these countries, teenage unemployment has still skyrocketed.

Statistics NZ has publishes the 1996-7 New Zealand Health Survey. The survey says cost is the reason over 200,000 people did not see a doctor last year when they needed to.

21 July 1998

Professor Deepak Lal, from the University of California, says that high minimum wage laws are counterproductive to low end of the market employment growth. In NZ as a guest of the Business Roundtable, Lal says that high minimum wages encourage employers to hire more qualified workers rather than entry-level workers.

The New Zealand Institute of Economic Research reverses its opinion that the economy would begin to rebound in September. The Institute's Quarterly Survey of Business Opinion points to a sharp slump in domestic trading and punctured business confidence. Director Alex Sundakov says that the Institute's previous forecast of 1.9% growth this year will have to reassessed.

The Rotorua District Council is told of a serious lack of short-term housing in its district. The report says a number of community groups have tried to address the issue but have little funding, energy or resources to spare. The Salvation Army recently closed a scheme providing cheap, temporary accommodation because it became too expensive. Salvationist David Stone says there are plenty of flats and houses to let in Rotorua but they are too expensive for people to afford them.

22 July 1998

The two foodbanks in Palmerston North report 467 more people coming in for food parcels in the last year, compared to the previous year. Gail Munro of the Methodist Social Services says that an appeal by the mayor to replenish stocks was very welcome, but it would not solve the problem. Colin Davidson of the Salvation Army points out that Palmerston North had lost several large employers in the last 18 months. The foodbanks are now feeling the impact.

A One News/Colman Brunton poll shows NZ'ers overwhelmingly support paid parental leave. The poll was held in response to Alliance MP Laila Harre's Paid Parental Leave Bill presented to parliament last week. The Bill would provide 12 weeks leave paid for by an employer's levy. Associate Women's Affairs Minister Deborah Morris has stated the government will vote the Bill down.

The New Zealand Seafarers Union sets up an office in New Plymouth to spearhead the fight to save the jobs of NZ'ers on a domestic petroleum carrier. The coastal tanker Tarihiko, owned by NZ company Liquigas, carries liquified petroleum gas from New Plymouth to Auckland, Lyttleton and Dunedin. Liquigas intends to sell the Tarihiko. The Seafarers Union however believes the Tarihiko's work will be contracted to Asian or Pacific Island charter vessels that will employ cheaper labour.

Changes are announced to the community wage scheme. See item in this Jobs Letter.

Wellington mayor Mark Blumsky says the Wellington City and Regional Councils will consider finding work for community wage scheme workers. After Employment Minister Peter McCardle met Wellington council officials last week, Blumsky says the scheme provides an opportunity to enhance the services the councils provide to the community.

23 July 1998

Professor Srikanta Chatterjee, of Massey University, publishes a study that says the gap between the rich and poor in NZ has increased substantially since 1982. See feature in this Jobs Letter.

Minister of Labour Max Bradford presents the new industrial relations package. It has none of the "pro-employer" changes that Bradford had been calling for earlier. The easing of his stance was not only because of resistance from coalition partner NZ First but also because of public reaction. On a public opinion poll on the issue earlier this year, Bradford says: "It was a pretty resounding `no', and that even included a number of employers."

24 July 1998

The Disabled People's Assembly chief executive, Dave Henderson, says the government is taking an outrageous and punitive attitude by legislating to halt benefits to disabled people if they can not make it to work. Henderson suggests a better approach is to improve support and access to work for disabled people.

Telecom NZ has contracted out its operator services to call centre specialist company Sitel. The change will effect 600 Telecom operators.

Capital Coast Health announces 20 redundancies in hits mental health services staff. Mental health clinical leader Peter McGeorge acknowledges the cuts would increase clinical risks to mental health service users.

25 July 1998

The Careers Service website Kiwi Careers has already proved to be immensely popular. It is attracting 250,000 "visits" per month.

26 July 1998

Company liquidations and personal bankruptcies increase dramatically. Ministry of Commerce figures show, in the year to June, a 48% increase in company liquidations. The figures also indicate a 21% increase in personal bankruptcies. The majority of the personal bankruptcies were at the request of the debtors themselves, primarily with people getting into trouble with their credit cards.

The new Southland Veneers, of Kennington, near Invercargill, expects to employ more staff than previously reported. Chairman John Matheson says the Danish/NZ joint venture previously planned to employ 80 staff but is more likely to need 100 _ 120 staff.

NZ's clothing, textile and footwear industries urge government to suspend its earlier tariff reduction programme. The call comes after announcements that the Australian government is subsidising its own industries to the tune of $772m to help develop export markets. At risk in these industries are 25,000 NZ'ers whom manufacturers say are otherwise destined to become unemployed.

27 July 1998

The Alliance launches its alternative monetary policy at the Beehive. The policy aims to widen the monetary policy framework from the narrow target of inflation defined by the Reserve Bank Act. The Alliance says monetary policy must also include guidelines for annual per capita growth (1.5% of gdp), maximum balance-of-payment current account deficit (1.5% of gdp), inflation (1-4%), and full employment.

Affco announces plans to permanently close its Taumarunui meatworks. The plant, which employed over 250 people, was mothballed early this year. Affco Workers Resource Centre worker Charlie Jones says about half the workers are still unemployed. Of those who are working, many are part-time. Most of those who found full-time work have had to move out of town for it.

Taumarunui has suffered other serious job losses during the last twelve months. Wallace Meats (48 jobs) and Tangiwai Sawmill (100 jobs) closed. Employment problems have been exacerbated by the loss of revenue from Mt Ruapehu skifields.

28 July 1998

Economists at the Hong Kong and Shanghai Banking Corporation expect the NZ economy shrink 0.2% in the next quarter. The Financial Markets Quarterly, issued by HSBC Markets, anticipates NZ unemployment rising to 8.6% in the March quarter. The report says that this high unemployment will further dampen the domestic economy, as will the resulting downward pressure on wages. It also expects that those people who do have work will pay off debts rather than spend.

29 July 1998

The Irish are going back home, in a turn-around on one of the oldest and most significant migrational flows in US history. Over the last two years, 13,000 more Irish have moved back to Ireland from America. It's partly due to the revival of Ireland's economic fortunes, which are giving it the tag of "the Celtic Tiger". These days it is enjoying a flood of foreign investment which has brought the unemployment rate down to 9% from nearly 16% five years ago. A major contributor to this renaissance is the use of the European Union Social Fund which has been a major contributor to Irish employment-related projects.