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    Essential Information on an Essential Issue

    Letter No.111

    5 November, 1999

    Time as currency and healer.

    Election Campaign. The jobs agenda has forced its way to the forefront of election issues. Last month's announcement of the closure of three Bendon factories in Te Aroha, Te Rapa, and East Tamaki, with the loss of 400 jobs, has catalysed the debate on employment issues and business development policies. Bendon plans to move its manufacturing operation overseas, and blames high costs for its decision to close.

  • PM Jenny Shipley, in the leaders' debate on TVNZ earlier this week, claimed that a West Auckland manufacturer, International Lingerie, was going to take over the Bendon plant in Te Aroha and employ the Bendon machinists. Later media reports revised this claim, saying that the lingerie company was only "considering" the move. International Lingerie owner, Ted Sweeney, says he is waiting to hear back on a request for Government financial aid to cover costs of moving to Te Aroha before making a decision.

    Sweeney says he was asked if the Prime Minister could tour his factory while in West Auckland, and he was surprised that she then announced his plans on television when discussions with Bendon were only in the early stages.

    Sweeney told Kim Hill on Radio NZ that without some form of development finance he was not sure the firm could afford to move to Te Aroha, and he doubted the company would be able to take on more than about ten machinists. Kim Hill asked Sweeney to choose whether he would prefer a tax cut or export incentives from the next government. Sweeney's preference: export incentives.

    Source The New Zealand Herald 3 November 1999 "Shipley caught out at Bendon"; Labour party press release "Shipley's rank opportunism exposed"

  • Jenny Shipley hasn't been the only one having to back-pedal on claims relating to the jobs issue. In the last week, Labour leader Helen Clark has had to "explain" media reports that her party is promising to deliver a 3% unemployment rate in its first term of office. The Sunday Star-Times proclaimed last weekend that "Labour aims to halve jobless" and went on to quote government and employer spokespeople slamming the proposal as an "ignorant" target, and "an old Labour hoax".

    Clark had told National Radio that while Labour had not set absolute targets for its first term, she would be aiming for a level of unemployment that matches the vacancies in the labour market. Clark: "That's where the Americans are. It comes in at around 3%"

    Later, Clark told reporters that the 3% figure was a long-term objective, and not a short-term goal for which a Labour government would be held accountable to in the next three years.

    Source Sunday Star-Times 31 October 1999 "Labour aims to halve jobless" by Ruth Laugeson; The Daily News 1 November 1999 "Clark forced to retract vow on unemployment" by Nick Venter

  • Meanwhile, the National Party says it has costed out the policies of the Labour, Alliance and Green parties ... and has found that they will substantially increase employment costs and cost thousands of job losses each year. Speaking to a business forum in Wellington last week, PM Jenny Shipley listed the opposition policies which will halt the growing economy. These included policies to increase personal taxes, reverse ACC changes, remove the Employment Contracts Act and increase the role of unions and multi-employer negotiations, charge employers for paid parental leave, introduce four weeks' annual leave and increase the minimum wage by $20 a week.

    Shipley: "These charges will put up the cost of employing people by nearly 3 per cent. This might not sound like much, but it could result in 20,000 fewer jobs, or a 1 per cent increase in unemployment. The saddest part is the effect on people, mainly young Maori, whose self-esteem and sense of participation in our society will suffer as a consequence"

    Source "Labour and Alliance policies would cost 20,000 jobs" press release from the National Party.

    In announcing Labour's employment policies, Steve Maharey outlined plans for "community employment organisations" which would be set up to boost employment opportunities, particularly in regions with high unemployment.

    Labour says they could be set up by local or central government, or by private individuals but would not be allowed to make a profit nor be in competition with existing businesses. The organisations would be eligible for establishment grants the equivalent of the unemployment benefit for every worker they employed. But they will be required to top up this subsidy to the level of the minimum wage.

    Steve Maharey says that the establishment of these organisations would be the most expensive part of Labour's employment policies.

    Another Labour policy involves a scheme called Workstart that allows an unemployed person to use their unemployment benefit as a wage subsidy for a specified period. Employers would be required to top up their wages to market levels.

    Source The New Zealand Herald 27 October 1999 "Labour would split Winz functions, keep name" by NZPA; The Dominion 27 October 1999 "Winz would get shakeup under new policy".

    Meanwhile, the Alliance workplace relations spokesperson Laila Harre says that workers are experiencing the twin problems of overwork and unemployment. She says that an extra week of annual leave is a constructive response to both. Harre: "It creates more jobs because some businesses will hire more staff to cover the holidays of existing staff" Harre also says that the Alliance will introduce legislation to set maximum allowable hours of work as part of an overall plan to shorten the working week, without any corresponding reduction in pay.
    Source The Dominion 15 October 1999 "Alliance work focus on minimum conditions" by NZPA

    The Alliance has also announced it will push for a Government Social Responsibility Act. This Act will require the government to specify and monitor its performance against social objectives and to prepare social impact reports for any proposed legislation likely to have significant social effects.

    MP Grant Gillon says that in a 1994 report on New Zealand, the United Nations Committee on Economic, Social and Cultural Rights explicitly criticised the lack of social monitoring by the government. Gillon: "The absence of transparent information about what the government is trying to achieve and about the social impact of its policies makes it difficult to hold the government to account for its policies. The Fiscal Responsibility Act specifies the principles for responsible fiscal management. Similar obligations should exist in law in relation to social policy "

    Source "Jobs through growth and local economic development" press release from The Alliance by Grant Gillon 26 October 1999

    A Wainuiomata scientist has started collecting 250,000 signatures for a petition calling for the government to cut unemployment to 1% by the year 2004. By doing so, she would force the government to hold a referendum on the issue.

    Julie Waring says she has seen the effects of unemployment on family and friends and sees very clearly the difficulty and pain that people are going through. She says she is motivated by what she sees as MPs preoccupation with trivial issues. Waring hopes to "raise public awareness on the negative effects of unemployment" including crime, depression and youth suicide.

    To help collect signatures, write to Julie Waring, P.O.Box 42-009, Wainuiomata, or ring Wellington's City Voice newspaper at 04-385-6711.

    Source City Voice 21 October 1999 "Petition to cut jobless" by Grant Fleming

    This electorate contains 21,672 households, of which 35% have household incomes below $30,000 per year before tax. This is 20% below the rate for the country as a whole. There are 32,685 adults aged 20-59 in the North Shore electorate, of whom 66% are in paid, full-time work. Another 14% are in part-time work. Unemployment in the electorate is 9% below the national average. ( Electorate statistics compiled by Judy Reinken, and based on 1996 Census).

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

    Housing policies for the poor have had little effect on upgrading the substandard living condition of many families in Northland and on the East Cape. The parliamentary social services select committee reports that many people in these regions are still living in caravans, sheds, converted garages, derelict houses and cars without running water, sewage, electricity, laundry or kitchen facilities. The report also says the poor health of many people in Northland is a reflection of their living conditions.

    Less than a quarter of the families targeted by the Low Deposit Rural Lending scheme have taken out the loans. Of the 1400 families identified as needing assistance when the scheme was launched in 1995, only 323 loans have been made, averaging $70,000 each. This was despite over 3,000 people completing a workshop on home ownership as part of the loan scheme.

    The select committee acknowledged the complexity of solving the housing problem, but says the criteria for qualifying for the loan scheme should be expanded and that low, fixed interest rates and suspensory loans should be considered.

    Source New Zealand Herald 14 October 1999 "Housing shame for rural families loan plan `ineffective'" by Ken Lewis

    Poor and overcrowded housing continues to effect the health of children in South Auckland. Middlemore Hospital paediatrics staff have released a report that cites poverty as the underlying cause of the shocking health statistics of South Auckland children. The report says that 10% of these children suffer from some sort of disability or chronic disease. Co-author of the report, Adrain Trenholme, wants their findings to be taken more seriously. Trenholme: "We are saying, `It's awful. Please recognise it, and if there is anything that can be done about these socio-economic drivers of poor health, like housing, let's do it.'"
    New Zealand Herald 16-17 October 1999 Report a shocker on health of Kiwi kids — Catherine Masters

    A report titled `Hidden Hunger' has been released by the NZ Network Against Food Poverty and shows an alarming number of New Zealanders are suffering the health effects of food poverty. The report uses 70 bodies of research that link low income to poor diet and health and social problems.

    It says that at least 4% of NZ households nationally, and up to one third of households in the lowest income areas, do not have the variety of foods they need for a healthy life. Urban foodbanks estimate that they supply up to 10% of the households in their areas, including people who are in work.

    The report calls for benefits and wages to cover basic living costs. Network spokesman Kevin Hackwell: "The best budgeting in the world can't solve the problem of not having enough money. Food poverty cannot be tackled unless there is some increase in the level of benefits and access to decently waged work"

    The NZ Network Against Food Poverty includes foodbanks, public health workers and social and health agencies. The "Hidden Hunger" report is available from the Downtown Community Ministry P.O.Box 6133 Marion Square Wellington fax 04-384-7688

    Source The New Zealand Herald 22 October 1999 "Poor families dip out on good food" by NZPA;

    "Unemployment has been created through government policies. It's not a natural thing. Since unemployment has been created by government, so can jobs be created. It cost less to create meaningful, real jobs than it does to build prisons"
    Siggy Bauer, after the completion of his 802km, 17 day, Wanganui to Auckland "right to work" run

    "For Labour, full employment means that the amount of paid employment available matches the numbers of people actively seeking work. It also means that people are able to get the kinds of jobs that match their needs.

    "As we enter the next century, it is time to reassert commitment to full employment. New Zealanders know that the best economic and social policy is a job with a living wage. We need to get the government focused on jobs again. Too much time is spent on welfare and on dead-end schemes like the community wage. We will turn this around."
    Steve Maharey, Labour employment spokesman

    "Helen Clark's 3% unemployment target shows an appalling ignorance of the core of the unemployment issue in New Zealand, which is the high rates of unemployment among Maori and Polynesians. There is no sign of a policy prescription that shows they could work some miracle on those core high unemployed "
    Bill English, Treasurer

    "The Prime Minister's claim that an Auckland company is poised to take on the 98 people who will lose their jobs when Bendon closes its Te Aroha factory this month was exaggerated and self-serving. Mrs Shipley's opportunism is made even starker in that while she grandstands on television about jobs that don't exist, her Government is at the same time refusing to provide the kind of backup assistance to exporters like Bendon Ltd that would have helped the company to prosper in New Zealand"
    Helen Clark, Labour leader

    "We are losing businesses every week to foreign shores as other countries provide a better business environment and attractive incentives to relocate. A change of government would mean a change of focus with regard to tariffs and manufacturing policy. Until this country starts understanding the harsh realities of global marketing, New Zealand will continue to struggle economically. We will continue to see exporters, technology, and our brightest people leave our shores"
    Winston Peters, NZ First leader

    " What's the use of cheaper goods if you can't afford to buy them because there are no jobs? Bendon's decision to shift its manufacturing to Asia is the latest in a long line of factory closures to small towns. Our provincial centres are littered with empty businesses which have shut their doors because they can't compete with imported goods made in Asian sweatshops.

    "National's free trade policies are kicking the guts out of provincial New Zealand. The truth is that at least 60,000 manufacturing jobs have disappeared in the last decade because of tariff reductions and other free trade policies. With our trade deficit now standing at $1.8 billion for the year to August it is time for some common sense on trade policy.."
    Rod Donald, Green Party co-leader

    "For Bendon to now blame tariff removals for their closures is below the belt and totally untrue. It has exploited the goodwill of its 400 workers and shot overseas to have its garments made by cheap, slave labour. Bendon has ditched its moral obligation to its New Zealand and international workforce to pay reasonable and honest wages, preferring to use the excuse of competition, while perpetuating the beast it is fighting against. Imagine Elle McPherson promoting lingerie made by child labour in the backstreets of South East Asia. That scenario will be the reality in the new millenium"
    Rev. Ann Batten, Mauri Pacific

    " There is no credible regional investment programme that would keep the Bendon plants open. They are already in the regions and they have been there for 52 years. What would help to keep the Bendon plant open is a change in tariff policy, and any party that supports continuing tariff removals in effect supports the closure of the Bendon plants.

    " The Alliance is the only party that will protect jobs by maintaining tariffs on textile imports. If New Zealanders want businesses like Bendon then they need the Alliance in the new government in strength to advocate for the tariff protection which will keep them here"
    Jim Anderton, Alliance leader

    "ACT is the only party with a workable solution to the problem of how to create new jobs and growth. ACT's proposals will increase jobs. Over and above the 117,000 new jobs forecast by the Treasury, over a four-year period, a flat tax of 20 cents will create 80,000 new sustainable jobs. These 80,000 jobs will be taxpayers"
    Richard Prebble, ACT leader

    "The next chapter in the New Zealand story is about succeeding with innovative ideas and new technology — with new and old industries alike. It is also about fair welfare and modern health and education systems that allow New Zealanders to grasp the opportunities to get ahead.

    "We've shown throughout the 1990s how this can be done. Economic growth generated by sound policies means the cake gets bigger for everyone, allowing us to invest in quality social spending, cut taxes and reduce debt. That is our path for the future"
    Jenny Shipley, Prime Minister and National Party leader

    "Most New Zealand towns and cities have a youth problem. Here, the answer to many of the social problems created by young males in South Waikato lies down the road at Waiouru. Twelve weeks training under strict military type discipline would be the making of many of them.

    "Most of our young people are good citizens, but unfortunately, too many of them are lacking in leadership and direction. In many European countries, the system we are advocating works and is accepted as part of the obligations of adult males"
    Winston Peters, NZ First leader, announcing the NZ First policy of compulsory military training for 18-year old men.

    "`Compulsory military training won't create one more job. The $150 million that NZ First would spend giving people the military training would be far better spent on high-skilled new technology industries and training young people for jobs"
    Jim Anderton, Alliance leader

    "If the military is so good for young people and discipline, Winston Peters should sign up straight away he's the most erratic and ill-disciplined person I know. A stint in the Army might do him well."
    Tau Henare, Mauri Pacific leader

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