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    Essential Information on an Essential Issue

    Letter No.108

    24 September, 1999

    Hazel Henderson talks about the global economy, and the future of work and livelihood

    The Portal report was commissioned by local government leaders in the central North Island who were concerned about the social and economic state of their communities compared to the rest of New Zealand. The report focussed on "Zone 2" of the Local Government regions — which includes the Waikato, Thames/Coromandel, Bay of Plenty, Taupo and Gisborne regions. The results: a wake-up call for rural and provincial New Zealand.

    Using an impressive array of statistical data, the report analysed changes in demographic structures in the region, changes in educational achievements and the state of employment and unemployment, changes in income, housing prices, business and occupations, and indicators of social well-being such as crime, housing, health status and the voluntary sector. The survey shows that, over a ten-year period, this region has fallen behind the rest of New Zealand in terms of its social and economic quality of life. Specifically:
    — there is a reducing proportion of young people in the region
    — there are increasing levels of dependence
    — the population is less well-educated, with this trend increasing
    — the economy of the region and the social well-being of the residents is falling behind the rest of New Zealand
    — there are increased disadvantages for those living in rural area and small towns
    — there are marked disadvantages for the health, education and employment for young people in the region

    Source — Provincial/Rural Impact Study prepared for Zone 2 of Local Government NZ by Portal Consulting and Assoc. March 1999

  • Local Government NZ has seized upon the report and has resolved to alert central government about the issues raised. It wants to also challenge political parties to address rural and provincial issues in the coming election debates. The mayor of South Waikato District Council Gordon Blake says we have to take "a long hard look" at where successive governments since the mid-Eighties have taken the country.

    Blake: "There are problems with the population centralising into Auckland with all its infrastructural hassles. The Government can set the scene which makes it just as easier for businesses to operate in Tokoroa, Gisborne, Taranaki, the South Island or wherever. In many of these areas there are ample and good facilities in place to cope with an increase in population and business activities. Often it would be cheaper — for a whole host of reasons — for businesses to relocate to the regions.

    "Governments in recent times have just been ignoring these options. There needs to be a total rethink in the way we are planning things like economic development and training programmes. We need to sit down together and look at it in a partnership way…"

  • New Plymouth mayor Claire Stewart agrees, and says that many mayors have carried the message to central government that provincial areas are struggling. Stewart: "More councils are having to be enterprising in employment and tourism in an effort to turn things around … but we've been doing it on our own, with no help from successive governments. We can't gloss over the fact that provincial New Zealand is in crisis. We urgently need central government and the private sector to work with local government to turn the tide. Without a comprehensive nation-wide effort, the bleeding of provincial New Zealand will become terminal …"
    Source — Local Government New Zealand meeting notes on the Portal report.

    Unemployment has returned as the No.1 concern for people in the coming election, according to a New Zealand Herald/DigiPoll survey. Health services and concerns about crime and law and order are also in the top issues for voters.
    Source — The New Zealand Herald 8 September 1999 "Jobs now top issue ahead of health"

    That employment is top of the pressing concerns of the electorate is surprising to a lot of people, according to Steve Marshall, Chief Executive of the Employers Federation. He says that people expect health, education or law and order to be of greater priority … since these issues have been the subject of most debate by politicians and the media. To Marshall, this raises the question: If employment is the most important top-of-mind issue for New Zealanders, why do we see the political parties and media playing it down?

    Marshall: "I suppose it's not dreadfully sexy and it's not as easy to trivialise as those other more emotive issues — but, more importantly, neither their policies nor track records can stand too much scrutiny, so it's not too clever for most to raise a profile in the employment stakes. Nowhere do I see any politician talking about the employment effects of welfare policy, of tax policy, of environmental policy, of accident compensation policy etc. Surely it's time that we did."

  • Marshall told the Rotary Club of Port Nicholson that if you talk to business people and ask them why they are not growing their business and employing more staff, the responses are pretty standard. Marshall: "Sensibly, businesses will not create jobs which aren't there. They also won't take the risk of creating a new job which might be there if the cost of doing so is greater than the potential return, if it creates major additional compliance burdens or if the potential cost and disruption of it not working out are too high.

    " Over the past 10 years we have seen some quite big moves in the right direction on employment policy — with some very impressive results. No, things are not all perfect … and yes, we could be doing better — but, be assured, if we had not been given the Employment Contracts Act as a new industrial relations framework in 1991 we would be in a much worse position than we are today. How are people feeling about their lot? Beneficiaries, and unfortunately many of the elderly, continue to be pretty negative. In many areas the victim mentality is alive and well. But for those in employment, which is still the majority of the adult population, it's a very different picture…"

    Marshall quotes an AC Nielsen research survey that reports 84% of NZ workers saying that they like their job, 75% are satisfied with their conditions of employment, 74% think their employer is OK, and 70% are feeling pretty positive about their job security.

    Source — Steve Marshall Chief Executive New Zealand Employers' Federation speech to the Rotary Club of Port Nicholson, Parkroyal Hotel, Wellington Wednesday 8 September 1999

    North & South magazine have published a feature on Christine Rankin and Winz in the October issue, published this week. The magazine's senior writer, David McLoughlin, reports that he was refused repeated requests for an interview with Christine Rankin, despite the feature being an overview of the Winz crisis and Rankin's career. McLoughlin reports that after Rankin made a disastrous appearance on the TV1 Holmes show, where "she came across as arrogant and contrite", Winz erected a "fortress of silence" around itself. McLoughlin: "It appears to typify the brave new world of the public service, where ministers and department heads pass the parcel between themselves and the State Services Commission, where the buck no longer appears to stop anywhere …"

  • Winz staff, who agreed to talk to North & South on condition of anonymity, say there is no general morale problem in the department. The staff say the aircraft incident upset people for a few days, then they buckled down to the job.

    Staff told North & South they are more concerned about stress from the work levels in the department. One staff member: "Everything here is rush, rush, rush, like we work on a conveyor belt. We're trained to do that, but it means we have to work very hard. It used to take three weeks to process a benefit application, now we do it in 24 hours. We work so hard … the culture is stress to the max. There are going to be breakdowns. Somebody will eventually die because of the stress…"

  • Palmerston North beneficiary advocate Ian Ritchie says the reduction in the benefit turnaround time to 24 hours means Winz desk staff no longer have enough time to find out the circumstances of each applicant and work out what people are entitled to. Ritchie: "It would be fine if everybody was paid the same basic benefit, but, in 1991, benefits were reduced and all kinds of supplements were introduced based on people's circumstances. There isn't enough time to work all that out in a production line system, so their staff have to cut corners."

    Ritchie says that beneficiaries come away from Winz being told they are being paid the legal maximum. They then go to an advice or advocacy service which goes through their circumstances, measures them against Winz manuals and statutory requirements and often finds Winz has overlooked one or more supplementary benefits. The Central Region Advocacy Service, which Ritchie helped to establish, has had a caseload of 800 beneficiaries since October 1st last year. The service's volunteer staff have been able to get higher payments, or reinstated payments, for more than 500 of them.

    Ritchie: "Their initial thrust is to tell people they are not entitled to more, whether it's food, power bills, school fees or whatever. But many people are. We've been told that word came down from the top that people were not to be told their full entitlement unless they ask. They've always officially denied this, but it's so widespread throughout Winz offices that it must be correct."

  • North & South checked out this assertion that there is an order to front-line staff not to tell applicants their full entitlements. They asked staff in confidence if they had been given such an edict and were told there was not. McLaughlin: "The problem, we were told, is that the case managers who process applications only have an hour with each "customer" and that simply isn't enough time to process complicated applications properly. Many staff are apparently still learning the complex list of entitlements and how to assess applications properly…"

  • North & South reports that ordinary Winz staff, such as the case managers who deal individually with beneficiaries, are paid a basic salary of around $28,000. The benefit crime staff whose job is to detect benefit fraud have a basic salary of around $35,000. Low-level managers get about $60,000. A performance-based bonus system operates on top of salaries. If frontline staff process a minimum number of cases, they can earn around $1000 extra a quarter.
    Source — North & South October 1999 "Winz of Change" by David McLoughlin

    The Labour Party has released its welfare policies for the coming election, and says it would make Winz much more transparent and accountable. One of the first tasks for a Labour-led administration will be to "end the culture of extravagance" at Winz, according to social welfare spokesman Steve Maharey.

    Maharey: "The department needs a fresh start. We will establish a public service ethic in Winz, with clear direction from the Government on the management style required. There will be fundamental changes to the way Winz operates. Staff will be directed to ensure beneficiaries get their full entitlements. Internal re-organisation will restore a clear distinction between the Winz employment and income support functions, because it makes no sense to treat all beneficiaries as job seekers. Labour will break down bureaucratic rigidity in the department and fix weaknesses, such as the lack of a proper complaints resolution process …"

  • Labour says it will scrap the "meaningless and bullying" work-for-dole scheme. Maharey says that Labour will concentrate on quality case management and introduce programmes to help school-leavers and single parents get work skills. Labour will also restore a training benefit for 16- and 17-year-olds and trial new abatement regimes and grants to help beneficiaries move into work.

    Maharey: "The difference between Labour and National on welfare is clear. National blames individuals and families for being poor and out-of-work. They slashed benefits, distorted benefit fraud figures, bullied beneficiaries to look for non-existent jobs and drew up the insulting Code of Social Responsibility. They created an underclass, and they despise their own creation.

    "Labour knows welfare is an option very few people want to take. Our policy does not begin with blame. We focus on creating opportunities by removing obstacles to training, gaining qualifications and getting a job. Labour's vision is of an enabling welfare state, building the capacity of individuals, families and communities to participate in the mainstream of New Zealand life…"

    Source — The New Zealand Herald 9 September 1999 "Labour targets big spenders at Winz"; press release from Steve Maharey and Helen Clark 8 September 1999 "Welfare for the 21st century"

    This electorate contains 21,372 households, of which 52% have household incomes below $30,000 per year before tax. This is 17% above the rate for the country as a whole. There are 29,949 adults aged 20-59 in the Otago electorate, of whom 65% are in paid, full-time work. Another 13% are in part-time work. Unemployment in the electorate is 7% below the national average. No localities in the Otago electorate have high levels of deprivation.

    (— Electorate statistics compiled by Judy Reinken, and based on 1996 Census).

    Source — Judy Reinken, statistics based on 1996 Census of Population and Dwellings

    One NZ'er commits suicide every 16 hours — an average of 540 a year — according to research published in the Medical Journal by the Auckland School of Medicine. They also report that the rate of suicide amongst males is as bad as it was in the 1930s Great Depression, with numbers rising 119% nationally between 1974 and 1994, mostly in the 15 to 24 age group.

    One of the researchers, Dr Simon Hatcher, says his theory is that the increased rate amongst younger men is due to economic problems and the disproportionate distribution of wealth affecting them more than other groups. He says that in the Depression of the 1930s, older men dominated the suicide statistics because they were the ones most likely to be thrown out of work. Now, he says, it is the younger ones taking their own lives, as they face a more difficult entry into the workforce.

    Source — The New Zealand Herald 8 September 1999 "Suicide up to levels of 1930s bad years" by Martin Johnson

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