Letter No.94
5 February, 1999

15 January 1999

In Australia, the unemployment rate has dropped to its lowest level in almost a decade. The Australian Bureau of Statistics reports that the official unemployment rate in December dropped from 8% to 7.5%, after the numbers `employed' jumped by 53,600 people in a month.

18 January 1999

Inflation for 1998 is officially measured as 0.4%. This is the lowest calendar-year result in 50 years. Brian Gaynor, business columnist for the New Zealand Herald believes employment will be a casualty of this low inflation environment as companies struggling to show profits will be introducing new technology to reduce payrolls.

21 January 1999

Floods hit the Hokianga rendering hundreds homeless.

22 January 1999

Retail sales figures for November increased 0.8% over October according to Statistics NZ. This is higher than any economists had predicted.

George Soro, American hedge fund billionaire, credits the decline of Asian economies and the crisis in Latin America to the lack of supervision of international financial markets. Soro says that because political systems are national they are ineffective in dealing with financial markets that are global. He argues that the IMF should not be a crisis-fighting agency but a crisis-prevention agency.

US trade figures show an ever-increasing gap between imports and exports. America consumes much more than it sells and this is a trend some economists say will backfire on the bullish US economy.

24 January 1999

Community groups and churches gear up to aid flood victims in Northland. Pick up points for clothes and furniture appear around Auckland.

Brazil's real is declining daily despite the government spending vast amounts of borrowed US dollars trying to maintain its value. Brazil does not want the real to drop any lower because it fears skyrocketing inflation and investors abandoning the country entirely. President Fernando Cardoso has introduced taxes on government workers and pensioners but the estimated savings from this highly unpopular move is in the order of one tenth of what the IMF is demanding of Brazilian reforms.

Low international wool prices continue to burden NZ farmers. Wool Exporters Council president Peter Crone sees no reason for optimism in wool prices until Asia and Latin America begin buying wool again. The International Wool Textile Organisation says that wool production is now at the lowest it has been since the 1960's. NZ wool production is forecast to be down 5.6% on last year.

26 January 1999

A combined hui of the Hokianga communities hit by flooding publicly states they are appalled at the lack of immediate commitment by government to support disaster relief.

NZ business confidence improves according to the NZ Institute of Economic Research. The survey says 19% of responding businesses expect the general business situation to improve over the next three months.

Workbridge says that the Job Support Fund needs to be increased in order to maintain the gains the scheme has made placing disabled people into work. WINZ funds the $2m that provides money for workplace modification or other assistance for people with disabilities. Many of these jobs for disabled workers require on-going subsidies to keep them viable but the Job Support Fund is required to support 350 new applicants each year. Workbridge points out that without an increase in funding, services to existing job holders will disappear because there will only be funds to support new applicants.

The NZ Dairy Board expects its Latin American market to decline substantially as the Brazilian crisis overflows to its neighbours.

27 January 1999

The Fire Service has eleven Community Work Scheme workers doing the kind of work fire fighters did when they were not fighting fires. Alliance MP Grant Gillon says that in the face of the Fire Service cutting 100 jobs, it appears that work-for-the-dole workers are replacing some of them.

Job stress may be a major national problem in the U.S. According to a recent survey, 4 out of 10 American workers rate their jobs as "very stressful."

28 January 1999

Managing director of Talley's Fisheries, Peter Talley, tells a parliamentary subcommittee that under current legislation Japanese companies are depleting NZ fisheries without paying for it. Talley says Japanese ships, working NZ fisheries, employ no NZ'ers, are serviced by Japanese supply ships, take the catch to Thailand to be processed and then back to Japan without paying any NZ taxes at all. Talley supports a bill that would prevent foreign companies from using a different class of share to get around the 75% NZ ownership requirement for fishing quota.

The Agriculture and Forestry Ministry urges owners of small plantations of pinus radiata not to stop pruning their trees just because Carter Holt Harvey has. The ministry points out that unless the grower has long term contracts to supply, they are best to keep their options open by growing as high quality trees as possible.

WINZ has set up two mobile offices in the Hokianga, with four staff, to service the worst flood affected areas. WINZ Minister Roger Sowry says the WINZ staff are providing emergency funds and compiling a register of people who have suffered in the flood.

29 January 1999

The British government passes landmark legislation providing new rights to workers. The Employment Relations Bill gives better parental leave provisions and allows people to take time off work for domestic emergencies. It also gives unions the right to represent any single workforce of more than 20 people, so long as the majority supports it.

The Brazilian real drops to less than half the US dollar, a 50% decline over the last three weeks. Brazil has already spent the $US9.3 billion of a recent IMF loan in a vain attempt to maintain the value of the real.

1 February 1999

Changes to the Human Rights Act make it illegal to dismiss a person from employment because of their age. Retirement clauses in employment contracts are superceded by the new legislation. If employees do not want to, or can not afford to retire, they are legally entitled to stay on. The only enforceable means employers now have to `retire' an employee is to apply performance assessments which the employee does not pass.

Changes to the work testing rules for solo parents and caregivers of disabled people, enacted today, are greeted by a protest outside of Work and Income NZ on Manners St, Wellington.

America seems to the only one of the major world economies who continue to trumpet the uncontrolled free flow of goods and capital across borders. In a meeting of finance ministers, US treasury Secretary Robert Rubin reiterated the US laissez-faire policy, while Japan and Europe discussed ways of `amending the global financial architecture'. Rubin was unsupportive of a proposal to create a committee to monitor the global economy or to consider supporting governments to influence currency markets.

But leaders of countries severely affected by the recent crises are outspoken in their criticism of the free-market. Russian PM Primakov says that free market policies pursued by Russia were `quite wrong'. Malaysian PM Mahathir says the policies have gone too far. Out-going South African president Nelson Mandela says that greater globalisation was leading to greater disparity between the rich and the poor.

Fears grow that Brazil may default on its international debt that is now 20% greater than it was when the crisis started.

2 February 1999

A flood relief package for the Far North is announced by PM Jenny Shipley. The government is topping up the local mayoral fund by total of $30,000 and $15,000 is to be given to marae to cover costs of helping flood victims. The balance of the relief is in the form of Taskforce Green workers to help with the clean-up, re-siting the Pangaru school, repair to damaged roads and up to 60% of the cost of realigning rivers.

An Australian government report says that migrants entering Australia on a business skills program between 1994 and 1996 have created 7,700 new jobs and boosted exports by almost $A350m. About 1,000 immigrants entered each year from Singapore, Indonesia, Taiwan and South Africa.

Unemployed people will be trained to fight bushfires in the Kaipara District after recent fires revealed a serious lack of trained staff. The Kaipara District Council agrees to fund a three-day course in firefighting and first aid for 20 unemployed people. Emergency management officer Jim Goodland says hard economic times has seen fewer people putting in the extra time to become bushfire volunteers.

3 February 1999

The social fabric of Korea frays further as thousands of jobless parents are abandoning their infants to orphanages. Dubbed `IMF orphans', because they are victims of the economic policies of the IMF, these children have parents who can not feed them. Social stigma makes adoption in Korea almost unknown and Korean law does not allow the foreign adoption of children. But the government is considering allowing foreigners to adopt Korean children as the number of abandoned children has mushroomed.

Many builders are unhappy about the Building and Construction Industry Training Organisation refusing to pay polytechs to train apprentices. The ITO has changed to a system of apprentices learning the theory side of their trade from a manual with the help of their employer.

Chief executive of the Certified Builders Association Garry Shuttleworth says the move will be the end of apprenticeships. He says builders are in business to make money, not to train people and in many cases they would not have the theoretical knowledge or the ability to pass it on. The ITO's Trevor Allesbrook defends the new system saying that declining funds from government makes off-the-job training too expensive at polytechs.

A former probation officer is taking the Department of Corrections to the Employment Court for not providing him with a safe work environment. Chris Gilbert worked in the Otahuhu probation office for 21 years and is now an invalid due to health problems he says were caused by his job. Gilbert suffers from depression, burn-out, extreme fatigue and coronary problems. His doctors told him he would die if he didn't quit his job. Gilbert's lawyer says his place of work was unsafe because positions were left unfilled and the increased workload was a breach of his employment contract.

4 February 1999

Latest employment statistics are released by Statistics NZ.