Letter No.103
17 July, 1999

25 June 1999

The NZ economy grew 0.7% in the first three months of 1999. WestpacTrust chief economist Bevan Graham says the country is out of recession but the recovery is still fragile with growth predicted to be only 1.5% this year.

NZ's trade deficit was reduced this month but not as much as had been expected. Deutsche Bank says that export growth has not reached targets and the trade deficit is now significantly worse than had been anticipated. The bank also says this situation is expected to continue as there is soft demand for our primary produce.

Infometrics' David Grimmond suggests that exports are down because last year's drought had forced farmers to reduce stock numbers and now they do not have the meat to export.

27 June 1999

Job losses are expected as Nelson Bays Meat Processors plans to streamline the plant. As many as 100 of the 290 staff will go as the beef chain will be permanently closed.

28 June 1999

Social Services Minister Roger Sowry says the dob-in-a-beneficiary TV ad campaign was a success. Sowry says the uncovering of $17m in fraudulent benefit overpayment can be attributed to the campaign. He also says the TV ads educated the NZ public so that 94% of NZ'ers now know that benefit fraud is a crime. The minister says that 1,871 fraudulent benefit overpayment cases were detected by the campaign.

WINZ benefit crime manager Joan McQuay reports that 160 of the fraudulent benefit overpayment cases have been referred for prosecution. She says there may be more to follow as all the investigations have not been completed.

Roger Sowry tells an indigenous peoples and justice conference in Wellington that parents are not taking enough responsibility for youth crime. Sowry says that Maori make up 48% of child abuse and child neglect cases and that parents should get off their sofas, turn off their TV and find out what their children are up to. Sowry says that youth crime is not a problem government can solve on its own. He asks parents to take a greater interest in their children, play sport with them, read them books and listen to them.

29 June 1999

Winston Peters says if he becomes government he will amend the Reserve Bank Act to include employment objectives and export growth as part of the policy negotiated between the government and the Governor of the Reserve Bank. Peters took this same issue into the last election but did not succeed in getting it into policy.

The Labour opposition reacts strongly to yesterday's message to Maori parents from Roger Sowry. Maori Affairs spokesperson Dover Samuels says that Sowry's speech ignores the government's role in failing to address the disparity that exists for Maori and the shrinking of core government services. Labour's George Hawkins tells parliament that the massive increase in youth offending that has occurred during the National government's term in office should not be palmed-off onto parents.

30 June 1999

Tegel Foods will close its chicken processing plant in Te Horo, in the Horowhenua, with the loss of 90 jobs. The company is expanding its facilities in Bell Block, New Plymouth, to accommodate for the expanded processing capacity that will be required when the Te Horo plant closes.

Some of the 80 staff losing their jobs as Carter Holt Harvey's Henderson tissue manufacturing plant closes may be offered jobs in Kawerau. The factory's general manager Howard Meadows says the tissue manufacturing operation is shifting to Kawerau and that Auckland staff with relevant skills would be offered employment there. Any further vacancies would be offered to locals.

After a week of announced job losses around the country, senior lecturer of labour studies at Massey University Chris Eichbaum is cautious about the statement that NZ has risen out of recession. Eichbaum says the redundancies announced by Solid Energy, British American Tobacco, Gillette, Carter Holt Harvey, Masterton Hospital laundry, Nelson Bays Meat and Tegel Foods, all within a week, must temper optimism about the economy. Eichbaum: "It certainly would suggest that any movement back into growth is extremely fragile."

1 July 1999

Competition for worker accident insurance comes into effect. All employers are to have chosen either a private accident insurer or be assigned one.

The Labour Party releases its ACC policy saying it would see that accident insurance is delivered by a single publicly funded model with a board supported by small skills-based advisory panels. Labour policy also includes that lump-sum compensation would be restored.

Community welfare organisations in Australia are facing increasing demand according to a survey by the Australian Council of Social Services. The ACOSS surveyed 300 welfare agencies finding that 77% have had increased demand over the last six months. The report comes on the heels of the Minister of Employment Services Tony Abbott's statement that high unemployment is as related to the "culture of welfare" as it is to economic activity. Michael Raper of the ACOSS says the minister's comments were a bit rich considering the government had just slashed $A1.8 billion from job training programmes. In Australia there are ten people unemployed for every advertised job.

5 July 1999

A survey of workers opinions on the Employment Contracts Act says that 40% of workers approve the Act, 31% disapprove and 29% have no opinion. The poll was commissioned by the Employers Federation which concludes that 66% of NZ workers do not want changes to the Act.

Labour's labour relations spokesperson Pete Hodgson says the employer's survey skirted the central issue: unemployment. Hodgson: "The reality is that unemployment has risen from less than 6% in the years before the passage of the Employment Contracts Act to 8% in the years since."

There is great potential for community groups to create jobs through waste minimalisation programmes, according to Cliff Colquhoun. As manager of the Kaitaia-based Community Business and Environment Centre, Colquhoun says the mounting cost of waste disposal means there are jobs waiting to be developed in recycling, running education programmes and in new industries using waste materials. He encourages community groups to take on community education programmes, train "waste minimalisation missionaries" and help job-seekers learn the teaching and selling techniques to promote waste recycling.

6 July 1999

Strong economic growth continues in the US with 268,000 jobs being created last month and unemployment holding steady at 4.2%.

As the Youth Corps programmes shift from the Ministry of Youth Affairs to WINZ today, all new participants on youth corps programmes will come under WINZ community wage rules. This means new participants who are 16 and 17 years old will now not be eligible for the $95 per week allowance unless they are estranged from their family.

Labour's youth affairs spokesperson Lianne Dalziel says that the Ministry of Youth Affairs had not discussed the ramifications of this change in entitlement with WINZ and that there had been no discussion or consultation on the issue.

7 July 1999

The ANZ monthly report on the number of jobs being advertised shows a 0.8% increase in May over June. The report says this information, along with sluggish retail sales and weaker business and consumer confidence, suggests the economy may have lost some of the momentum that was there at the beginning of the year.

The call of developing a call centre industry in the Far North has rung a bell with WINZ. The agency will soon call for tenders to train 50 unemployed people in call centre skills there. While there is no call centre industry in the Far North at present, mayor Yvonne Sharp says that a district-wide commitment to training was important in order to attract the industry there. It is hoped that graduates of the training will eventually find call centre jobs in the Far North, but until there is an industry there, they could find work in cities.

Labour's Steve Maharey questions whether WINZ is placing greater focus on promotion of the agency itself and neglecting core activities like providing computerised job search services in all centres and knowing how many vacancies were listed.

9 July 1999

China. A further three million state sector jobs are to be lost this year according to Chinese Labour Minister Zhang Xinhua. It is estimated that six to seven million people have already lost state sector employment. China does have welfare assistance that is intended to give basic living expenses to those laid-off, but media reports indicate that the fund is not large enough to cover the need.

Maori will be well represented in the training for casual work at the new Wellington regional stadium. WINZ acting regional commissioner Pat Houston says the agency has been asked to find as many as 800 people, mostly long-term unemployed, to be trained as ushers, guards and other casual jobs. She says Maori represents a high proportion of the long-term unemployed and they would be targeted to fill those training positions.

Nelson Polytech is cutting administrative staff. Fifteen jobs are being lost as 44 people are being asked to reapply for 29 jobs.

11 July 1999

Treasurer Bill English outlines the government's proposed changes to the income tax rate. The new structure would abolish the low-income rebate and take the earnings threshold for the highest rate of tax from $38,000 to $40,000.

The proposed tax rates are 15% on the first $9,500, 20% on $9,500 to $40,000 and 33% on all income over $40,000. All people earning more than $40,000 will get the maximum of $10.50 tax cut per week. Those earning $35,000 will get a $5 tax cut, and those earning $30,000 will get $4. English: "For those on lower incomes, this sends a really important message, and that is that improving your situation and getting into work is worth it."

The proposed tax rates are 15% on the first $9,500, 20% on $9,500 to $40,000 and 33% on all income over $40,000. The maximum anyone will get is an extra $10.50 extra per week, for people earning more than $40,000. Those earning $35,000 will get a $5 tax cut, and those earning $30,000 will get $4. English: "For those on lower incomes, this sends a really important message, and that is that improving your situation and getting into work is worth it."

12 July 1999

Labour Leader Helen Clark says her government will scrap any tax cut legislation immediately on taking office.

Alliance leader Jim Anderton calls the tax policy fraudulent, unfair and flawed. Anderton says that it fraudulent because the people being told they are getting a tax cut are the same ones who are paying $50-$60 per week more on user charges.

ACT NZ's Rodney Hide says the package would do nothing to boost the economy. Hide: "Fiddling with the threshold levels will not give businesses the boost they need to create more jobs."