Letter No.86
1 September, 1998

12 August 1998

NZ First party leader Winston Peters and three of his party walk out of a cabinet meeting, signaling a breakdown of relations between the coalition government partners.

Only three Kinleith workers go to Auckland for the annual general meeting of Carter Holt. The busloads of workers who were expected to disrupt the meeting of NZ `s second largest listed company stayed home in Tokoroa.

In Tokoroa, the workers were told that CCH's restructuring will present them with substantial modifications in the company's employment policy, including an accelerated reduction of staff programme and the introduction of a salary system that will eliminate overtime payments.

Many more police are to lose their jobs than were identified in a police review outlined in June. On top of the 380 to 450 administrative jobs to go, the introduction of the centralised Incis computer system will reduce police numbers by a further 200 300.

13 August 1998

The Reserve Bank of Fiji says the Fijian economy contracted -1.9% last year and anticipates negative growth of -3% this year. The bank says the drought which devastated 60% of the sugar crop, and the Asian crisis, were primarily responsible.

14 August 1998

Australia introduces a goods and services tax, accompanied by a reduction in income tax rates.

15 August 1998

Benefit fraud. The NZ Statistical Association claims that figures being promoted by the Department of Social Welfare may be inflated as much as 60%. NZSA's Stephen Haslett: " even on the Department's own admission a substantial part of that figure is not fraud in the legal or even commonsense meaning of the word." NZSA represents 600 statisticians and was asked to investigate the benefit crime stats by the Wellington Downtown Community Ministry.

Social Welfare claims its figures of an increase in the detection of benefit fraud over the last twelve months, from $63m to $102m, is accurate. But NZSA says that all statistics used in public relations campaigns and presented to parliament should be subject to official approval by the government statistician.

17 August 1998 ,

Auckland University releases its latest schedule of student fees. Medical students' fees will double next year and engineering and fine arts student fees will increase by 50%.

18 August 1998

Employment Minister Peter McCardle and seven other NZ First MPs resign from their party. All eight pledge their vote on confidence and supply issues to the National Party minority government. PM Jenny Shipley says she now has the assurance from enough MPs to continue to operate the government without calling an early election. A cabinet shake-up is inevitable and it is uncertain whether McCardle will continue in his job.

The sex industry makes up 14% of the gross domestic product of Indonesia, Malaysia, the Philippines and Thailand, and unemployment is increasingly drawing women to prostitution in the region, according to a study by the ILO.

19 August 1998

The Status of Redundancy Bill sponsored by Labour's Rick Barker is defeated in parliament. The Bill sought to classify redundancy payments to employees of a liquidated company as secured debt. This means that redundancy payments would have been treated like wages and holiday pay and have priority of payment over debt owed to banks and unsecured creditors.

Act leader Richard Prebble says the government should trim an extra $1billion off its spending and introduce more pro-business legislation.

A study done by World Wildlife Fund consultant Gareth Porter says that improved fishing technology and severe international competition is having disastrous effects on the planet's "biological wealth" or seafood resources. Porter's study found that a sustainable amount of fish taken from the sea is 60m tonnes per year. Currently 80 84m tonnes are being taken and the fishing industry has the capability of harvesting 100m tonnes of fish per year.

In an Auckland Chamber of Commerce survey, 58% of businesses believe business confidence will improve over the next six months. Only 12% thought it would be worse.

20 August 1998

Reserve Bank Governor Don Brash says the NZ economy shrank -0.2% last quarter. Dr Brash's quarterly monetary outlook indicates the economy is in a "mild recession" during the first half of the financial year. The governor is now forecasting the economy to have grown a total of +1% by the end of the financial year.

Home loan mortgage floating interest rates drop to between 8.3% 8.5%. In April this year, the floating rate was about 11.5%.

PM Jenny Shipley challenges Act leader Richard Prebble to be specific about where he would cut $1 billion from the government budget.

The UN's International Labour Organisation accuses the government of Myanmar (Burma) of systematically using forced civilian labour in the construction, maintenance and servicing of its military camps. Forced labour is also pervasive in agriculture, logging and the building of roads, railways and bridges and other infrastructure work. The report comes out of an inquiry commissioned by the ILO in March 1997 which gathered information from witnesses and non-governmental groups.

Labour's Employment spokesperson Steve Maharey says that his party will create two types of one-stop-shops rather than the single one being put together by government. The new one-stop-shops are supposed to service all 900,000 beneficiaries. Maharey says this is unworkable: " there should be a one-stop shop for job-seekers, who currently number about 185,000, and another for people drawing income support."

21 August 1998

Treasurer and Finance Minister Bill Birch tells Auckland business leaders that the national caucus is intent on further asset sales. The government is free to sell assets not classified as "strategic". The sale of "strategic" assets would require an act of parliament and would require the government to test its confidence in passing legislation and therefore risk an early election. The "strategic" assets list includes Electricity Corp, Contact Energy, Transpower, NZ Post and TV One.

Statistics NZ's quarterly report on wage rates says that on average wages have risen 2% over last year.

Social Welfare Minister Roger Sowry says social policy initiatives would go ahead despite the coalition government collapse. Programmes continuing on schedule are the merger of Income Support and the Employment Service, one-stop shops and the Community Wage Scheme.

Bill Birch hints that that for the first time in five years the government may not have a financial surplus at the end of the financial year. He blames the Asian economic crisis as reducing government revenue.

Union membership, on a steady decline ever since the passing of Employment Contracts Act in 1991, seems to be leveling out. After dramatic reductions for years, the number of union members dropped only 3% this year.

22 August 1998

The 32-day strike at Hyundai Motor Corp in Korea ends as a compromise is reached between management and union officials. 277 workers will lose their jobs, rather than the 1,500 jobs management said would have to go. The Korean Ministry of Labour says the strike has cost $NZ2 billion in lost production.

23 August 1998

The number of working holiday visas issued by the New Zealand Immigration Service rises and is tipped to rise much further. To date, there have only been 1,150 of the six month visas offered worldwide. Now, 4,000 working holiday visas are being offered to the UK alone. Backpackers Accommodation Council national executive member Gary Ogle has appealed to the Minister of Immigration, Max Bradford, to extend the number of working holiday visas immediately to 10,000, with a view to eventually offering 25,000.

The number of staff at Sealord Group fish factories and trawlers has increased by 150 over the past year. Chief execute Phil Lough says that Sealord is not catching more fish, but is venturing into added value products.

24 August 1998

National Mutual New Zealand begins cost cutting which will eliminate approximately 100 jobs over the next three years. Most of the company's 450 employees are based in Wellington.

26 August 1998

As the report of the questionaire of the proposed Code of Social and Family Responsibility comes nearer to being published, the "code" has taken another battering, this time from researchers from Auckland's Unitech. A telephone survey found 33% of Aucklanders had not seen the draft code and 15% had responded. In Palmerston North, 11% had not seen it and 21% had responded.

The coalition government of the National Party and NZ First comes to an end at 12:40pm.