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    Essential Information on an Essential Issue

    Letter No.97

    26 March, 1999

    Local Economic Development: Sean Bevin of Napier City Council reports on successful approaches to local development in the United States.

    The Community Employment Group (CEG) is facing a major review under the latest restructuring measures of the Department of Work and Income (WINZ). The review will focus on management structure and CEG's national support functions, and it will be completed by the end of June.

    Community groups and employment agencies will closely watch this review, as the CEG agency has been the major source of government funding for innovative locally-driven employment projects.

    With the advent of the WINZ department last October, the future of CEG has been a continuing question. Many observers have speculated that CEG's national and regional management will go, and the local field workers will be placed under the jurisdiction of the thirteen WINZ Regional Commissioners. Many of CEG's major programmes (such as Business Grow, Mature Employment Service, Be Your Own Boss courses etc.) have been on an "exit strategy" for some time now.

  • WINZ Chief Executive Christine Rankin says that the CEG review will "look at current Community Employment operations with a view to better aligning management and national support functions with Work and Income's overall service delivery strategy and regional structure..."

    Rankin: "I consider the work undertaken by Community Employment to be a vital element in the achievement of our business goals, mission and vision. I believe the flexibility of approach displayed by field workers combined with the efforts of other frontline staff will improve outcomes around the development of employment opportunities in communities ..."

    Source _ The Head Line letter to staff 10 March 1999 by Christine Rankin

    It's been six months since the launch of the Department of Work and Income, and Opposition politicians have turned the heat up on many aspects of the new department from the troubles with paying student allowances, confidentiality in the "dob-in-a-bludger" scheme, controversies with the Community Work scheme, and amount of the money spent on WINZ office refurbishing, public relations, consultants and conferences. (see Voices, this issue)

  • Labour Social Welfare Spokesperson Steve Maharey says that the new WINZ system is just not working in the processing of student allowances. He says that part of the problem is that WINZ staff are being asked to go through a massive amount of restructuring while taking on many new jobs. Maharey: " The other part of the problem is that centralising the system in Palmerston North means that students around the country are forced to phone to discuss their problems. A third of the calls do not get through. Others wait for a very long time to talk to someone. Often they are told nothing can be done. Applications have been lost and students have had to apply all over again ..."

    " The frustration students feel is enormous. Students must have access to their allowance when they return to study. And government organisations must deliver the best possible service ..."

  • WINZ Minister Peter McCardle says that delays in processing student allowances are not new, and they happened when tertiary institutions handled the allowances. He says there was no media outcry in previous years because each institution dealt with the situation locally, and the problem was not focussed on one organisation like WINZ.

    McCardle: " The current process, which uses new technology and systems, does need improvement in some areas, and those are being made ... but WINZ is now paying allowances to many more students than last year, when tertiary institutions and the Ministry of Education handled the process.

    " WINZ has received more than 50,000 applications and three quarters of these students have received their first payment in the week it was due. This is faster than in previous years. Of the remaining applications yet to be finalised, further information is required from either institutions or the students themselves.

  • McCardle says he has asked the WINZ department to ensure students have access to emergency grants to alleviate hardship while awaiting their student allowance payments. WINZ staff have discretion to provide special needs grants or other assistance "... provided certain criteria are met." McCardle: " This assistance is to help people in serious hardship, and by law the criteria governing these grants are strict, but there is room to help students ..."
    Sources _ "Work and Income Delivering Results" press release WINZ Christine Rankin 17 March 1999; "Call for enquiry into student allowance chaos" press release Rod Donald 17 March 1999; "Labour: WINZ not working for students" press release Steve Maharey 22 March 1999; "Student Allowance Delays Not New" press release from Peter McCardle 18 March 1999; "Student Allowance Delays Not New" press release from Peter McCardle 18 March 1999

    WINZ has also released its quarterly customer profile which includes the numbers of people registered as job seekers. There were 201,771 people registered as unemployed on 31 December 1998. This is 7.8% higher than in December 1997.

    As at 31 December 1998 the total of people working on the Community Work programme was 8,734.

    Emergency Benefit numbers fell by 5.6% over the last 12 months. WINZ says this is partly due to work testing resulting in transfer of some beneficiaries to the Community Wage (Job Seeker) category.

  • While the new WINZ figures do tell us gender, duration, age and ethnicity for each district WINZ office in the country, they do not tell us the numbers of notified vacancies, numbers of unfilled vacancies at the end of the survey period, the numbers of people on various employment programmes, or the numbers in employment and supported by other subsidies. These figures were available in the previous administrative statistics supplied by the NZ Employment Service.
    Source _ Work and Income NZ Quarterly Administrative Statistics for quarter ended December 1999.

    More WINZ. There seems to be confusion around whether or not part-time work-tested beneficiaries on the Domestic Purposes Benefit have to participate in the work-for-the-dole scheme. Ivan Sowry of the Auckland People's Centre says that WINZ staff have seemed confused on this themselves. He believes that the policy manuals were only recently given to WINZ staff ... even though the policy changes came into effect last year.

    John Stephenson of WINZ confirms that participation in Community Work is voluntary for part-time work-tested Domestic Purposes and Widows beneficiaries. The "focus population" of the Community Work programme is limited to Community Wage recipients and full-time work-testable beneficiaries.

    Source _ papers from Pip Desmond, NZ Federation of Voluntary Welfare Organisations; interviews with Ivan Sowry and John Stephenson by Shirley Vickery of The Jobs Letter.

    Ian Ritchie reports that the Employment Summit in Palmerston North next week is attracting interest from across the country, Auckland to Dunedin. The background papers to the Summit have been compiled into a book entitled "EmploymentWhat can we do? Possibilities and Potential". Ritchie: "These papers cover a very wide range of information and ideas from the Manawatu, elsewhere in New Zealand and overseas. They really do show that everyone can play a part in creating meaningful, sustainable, family supporting jobs ..."

    The papers are available from the Summit committee at Private Bag 11-042, Palmerston North or on the internet at

    Source _ press release from Ian Ritchie 17 March 1999

    Thiselectorate contains 21,021 households, of which 45% have household incomes below $30,000 per year before tax. That 45% is 2% above the rate for the country as a whole. There are 33,702 adults aged 20-59 in the Palmerston North electorate, of whom 57% are in paid, full-time work. Another 14% are in part-time work. Unemployment in the electorate is 3% above the national average. Localities in the Palmerston North electorate which have high levels of deprivation are: Highbury and Roslyn. ( Electorate statistics compiled by Judy Reinken, and based on 1996 Census).
    Source _ Judy Reinken, statistics based on 1996 Census of Population and Dwellings

    The surprise resignation of the German finance minister, Oscar Lafontaine, has been greeted with some relief by financial markets in the European Union. In his drive for tax and economic reforms, the socialist Lafontaine often argued with the German Chancellor Gerhard Schroeder (leader of the "red/green" German coalition government). Lafontaine's rebellious reputation was starting to effect the credibility of the new euro currency which had fallen steadily while he was in power, and rose sharply as soon as he resigned.

    Dubbed "the most dangerous man in Europe" by Rupert Murdoch's British newspapers, and "Red Oskar" by his critics in Germany, Lafontaine was considered by many as one of the most gifted politicians of his generation. The Guardian last week said that he was perhaps the only leader left in Europe who was committed to and capable of restoring a Keynesian economic framework with its emphasis on cutting unemployment. The challenge for the six-month old German government now is to forge new economic policies in the face of a continuing rise in joblessness.

    Source _ The Guardian Weekly 21 March 1999 "Oscar's exit brings cheer to markets" by martin Walker; "Some cheer at Oskar's going" editorial The Guardian Weekly 21 March 1999

    France's electricity and gas utilities will introduce a 35-hour week under a new agreement with unions in the sector. At the same time, the utilities have committed themselves to take on an extra 20,000 young workers over the next three years. (Since about 15,000 of the French utilities 142,000 employees are due to retire during the next three years, the new agreement means a net gain of around 5,000 jobs.)

    The strong emphasis in the agreement on shorter hours is due to the bargaining policies of the local unions, who have been calling for employers to reduce work times while simultaneously boosting employment.

    Even more cuts in working hours are on the cards, as the new agreement also provides for voluntary moves to a 32-hour, four-day week. It is up to each work unit to decide whether they want this and, if so, how they will put it into practice.

    Those who opt for the 32-hour week will receive 97% of full pay (with 99% for the lower-wage workers). The new measures are to be financed partly from union's resources, partly through state schemes and partly through restraint in wage increases.

    The local union FCE-CFDT is arguing strongly in favour of the 32-hour option: "This is because the employment effects are greater. It is an opportunity for everyone to organise their work on the basis of a four-day week. A 32-hour week is also the best route to an innovative work organisation that reconciles individual aspirations with the requirements of public service, in the context of the opening up to competition ..."

    Source International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) statement "French Power And Gas Deal Boosts Jobs Through Work Time Cuts"

    " The new organisation is in chaos. While the new signs might be up and the desks are kept clear ... staff morale is low, computer integration is limited, processing of student allowances is in chaos and successful programmes such as local employment co-ordinators and the Community Employment Group are being restructured out of existence.

    " The student allowance crisis is no accident. It is symptomatic of the approach WINZ has taken to all of its `customers'. There appears to be time and money for mock wedding breakfasts for management, road shows and corporate videos but insufficient planning and attention to detail to ensure that quality service is delivered.

    " The dismantling of the previous system of direct processing of student allowances by tertiary institutions, and the consequent massive loss of institutional knowledge, has clearly contributed to the current crisis.

    " The WINZ project managers, their chief executive and the Minister should all be held to account for the current shambles. They had full knowledge of the likely work-load before taking over student allowances but clearly ignored the advice they were given ..."
    -- Rod Donald, Green Party Co-leader

    " Work and Income NZ touches the lives of over 900,000 New Zealanders. We do so through the dedicated and skilled application of over 4,500 staff who work tirelessly to deliver a top line service. For Mr Donald to suggest otherwise is simply an indication that he is not in touch with what is really happening at a grass roots level ...

    " WINZ has achieved what no other social service organisation had been able to do before an integrated approach to customer management which addressed the entire cycle of benefit assessment, benefit payment, training and employment.

    " Mr Donald's speculations verge on being irresponsible and will cause a great deal of anguish within the department.

    " I stand by what I know Work and Income NZ is achieving for New Zealand and I stand by my staff who are making these achievements possible ..."
    -- Christine Rankin, WINZ Chief Executive

    " Some of the Opposition spin-doctoring on Work and Income NZ is just self-serving puffery, and clearly part of a deliberate strategy to undermine WINZ and its one stop shop structure.

    " I take valid criticism of WINZ seriously, and in recent weeks have required the department to urgently address performance in relation to student allowances, and procedures around confidentiality.

    " However WINZ does its job very well overall. It is the country's newest and biggest department. It has over 4,500 staff, spends over $10 billion in taxpayers' money per year, and over $600 million in wages and programmes.

    " Despite its petty criticism, Labour has publicly admitted the one stop shop is the way to go, and it certainly is. WINZ will save the taxpayer around $15 million a year because it is more efficient than its preceding three separate services. Naturally, it costs money to set up the new organisation.

    "Yet, despite this, Opposition MPs grandstand on every piece of trivia they can get, or invent, about WINZ to advance their own cause. They waste both staff time and tens of thousands of dollars of public money asking ridiculous Parliamentary Questions on everyday spending such as carpets, desks, name badges, training sessions and management meetings which are standard for any large organisation ..."
    -- Peter McCardle, Associate Work and Income Minister

    " It is sad to see the Associate Minister of Work and Income spinning so wildly out of control in the face of valid criticism of the performance and focus of Work and Income New Zealand.

    " It is the Opposition's duty to question the questionable. We can hardly be blamed when the department he is responsible for provides so much ammunition ..."
    --Steve Maharey, Labour social welfare spokesperson

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