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    Essential Information on an Essential Issue

    Letter No.119

    6 March, 2000

    from new Parliamentarians Sue Bradford, John Tamihere and Parekura Horomia

    A group of mayors from throughout New Zealand have met in Christchurch to establish a "Mayors Taskforce for Jobs". The taskforce hopes to be a national focus for mayors concerned about the future of work and livelihood in their communities, and the mayors plan to meet regularly to co-operate on employment initiatives.

    The core group of the taskforce is: Garry Moore (Christchurch), Derek Fox (Wairoa), Sukhi Turner (Dunedin), Jenny Brash (Porirua), John Chaffey (Hurunui), Tim Shadbolt (Invercargill) and Jill White (Palmerston North). Other mayors who have expressed support are Claire Stewart (New Plymouth), Mark Blumsky (Wellington), Bob Harvey (Waitakere) and Don Riesterer (Opotiki).

  • The mayors point out that New Zealand has passed the year 2000 deadline for many of the goals set in the report of the 1994 Prime Ministerial Taskforce on Employment. Christchurch Mayor Garry Moore says that the 1994 taskforce described unemployment as "New Zealand's greatest challenge" and "… they felt that by the year 2000 it was entirely feasible for us to ensure that no-one in New Zealand would be out of work or training for longer than six months."

    Moore: "Six years later, unemployment is still very much with us, with nearly 200,000 people still jobless in our communities. The call for people and organisations to become more effective over these issues continues to be one of the key demands of this new century. The Mayors' Taskforce for Jobs is a way that we are renewing our public commitment to addressing these issues."

    Moore says that the mayors involved in this initiative are most concerned about the long-term trends on work and income in their communities: "Our communities are based on livelihood … yet we seem to be creating a society that continues to have no need for the work of a large number of people. This Taskforce is affirming that there is no justification for the waste of New Zealanders through unemployment. There needs to be an organised sense of leadership about the future of work and livelihood and we must create more opportunities for our children's children…"

  • Moore argues that the jobs of the future will certainly be coming from new business opportunities. However, he believes that future employment will also be driven by "our collective choices to value the new work that needs to be done". Moore: "This will require a shift in thinking about what we value and mayors can play an important governance role in leading these choices on behalf of our communities…"

    The objectives of the Mayors' Taskforce for Jobs are:
    — to provide a national focus on the jobs issue by co-operation among mayors concerned about employment issues in their communities,
    — to share "best practice" on what can be achieved on employment at the local level,
    — to create local and national forums to address the "big picture" of trends of the issues of income and work.
    — to link with imaginative private sector initiatives that are addressing unemployment.

    The Taskforce will be launched at a special meeting in Christchurch on 6 - 7 April, and all mayors throughout New Zealand are being invited to attend.

    Source - press release from Mayors Taskforce for Jobs 22 February 2000

    Opposition leader Jenny Shipley challenges the government to match the National Party's own performance in creating jobs and bringing down unemployment. Speaking in the first parliamentary debate of this year, Shipley says that the government should be judged on how it handles "... an economy which is in good shape."

    Shipley has challenged the government to deliver 1,808,960 people in work by December this year; 1,846,920 by December 2001; and 1,875,390 by December 2002. She says that unemployment was 6.3% at the end of last year and had been dropping an average of 0.5% since September 1991. Given this trend, Shipley says she expects the Labour/Alliance government to have unemployment rates down to 5.6% by September 2000, 5.1% in Sept 2001, and 4.7% in Sept 2002.

    Shipley: "National left an economy that would definitely achieve those targets if no major changes were made to the economic policy framework. We will hold Labour accountable for continued good economic performance..."

    Source - The Dominion 9 February 2000 "Shipley lays down jobs challenge"

    A strongly-worded government memo banning the use of consultants is being sent to all state agencies, according a report in the National Business Review. The NBR says that ministers have been instructed to write to their departments telling them that the coalition government does not want them to hire outsiders, and highlights the preparation of policy proposals as a particular "no-go zone". The ministerial letter reflects the desire within the cabinet to go back to developing "core competencies" within the state sector after the Winz debacles.

    NBR's Ray Lilley says that the crackdown could wipe out whole divisions of Wellington's professional firms, and see bureaucrats taking on extra staff to do the work they usually farmed out. Lilley: "The Wellington consultancy community is panicking about losing massive amounts of revenue. Some Wellington firms, such as KPMG and Consultus, have built whole practices around lucrative government contracts and the consulting community is anxious about how it will survive..."

    But there may be a silver lining to the government's change in policy: some consultants may find themselves turned back into state servants again.

    Source - National Business Review 18 February 2000 "Government drops bomb on Wellington consultants" by Ray Lilley

    New Zealand urgently needs an adult literacy strategy, according to Skills NZ's briefing papers to the incoming government. The papers quote a 1997 international adult literacy study which shows one quarter of adult NZ'ers and three quarters of unemployed as having reading and writing skills below the level deemed necessary to be productive and effective contributors to the workforce.

    The briefing papers also highlight major problems with the future employment prospects of NZ young people. Based on 1996 census data, one quarter of all 16 and 17-year olds and one third of all Maori in the same age group are not in education or employment ... which Skills NZ says puts them "at risk of failing to make a successful transition from school to adult life". The department says that this age group has no prospects of improving their circumstances without sustained interventions such as youth training.

    Source - The Daily News 26 February 2000 "Too many lack skills, survey finds" by NZPA

    Last year The Jobs Letter reported on the research of Massey Professor David Thomson (see No.105), which suggested that full-time work has been very rapidly disappearing for people aged 45 and over. Thomson based his trends in figures gained from the 1996 census data, and predicted that up to 40% of the mature labour force could lose their full-time work early in the next century.

    Social policy researcher Paul Callister was skeptical of this scenario of gloom for mature workers, and has recently put together data from the Household Labour Force Survey (from Statistics NZ) which challenges the Thomson research, and shows a picture which is nowhere near as gloomy as Professor Thomson presents. Writing to The Jobs Letter, Callister says: "I have now recalculated David Thomson's data and have found that he used a rather unorthodox methodology for the 1996 data that I think over-states the loss of work for both men and women."

    The newer Statistics NZ figures show that since the mid 1980s the proportion of people aged 45-64 in employment actually increased. Even more surprising, from the early 1990s to the end of the decade the proportion of people in full-time work in this same age group also increased. In the early 1990s around 55% of this age group worked 20 hours or more per week. By 1999 this had risen to around 63%(see graph).

    callmyth.jpg - 22453 Bytes

    Source: Statistics New Zealand, Household Labour Force Survey

  • Callister says that if you visit the average workplace and you are now more likely to meet an older worker than 15 years ago. So why have some commentators been suggesting that work, and particularly full-time work, has been disappearing for older workers?

    From the 1970s until the early 1990s there had indeed been a decline in full-time employment amongst males aged 45 and over. The decline was particularly marked from the mid 1980s due to economic restructuring with Maori and Pacific Island men hard hit by job losses.

    Callister notes that some commentators suggested that this loss of work would continue. But the latest data from Statistics NZ shows that full-time employment for men aged 45-59 stayed more or less stable over the whole decade, while the proportion of men aged 60-64 in full-time work actually increased. By the end of the 1990s, just over 84 percent of middle-aged men (45-54) were in full-time jobs.

    Callister: "This is certainly less than the 1970s and is problematic for those men who would prefer to be working full-time. However, it is not a statistic that supports a wholesale disappearance of work for this age group..."

    "Many older workers have been made redundant and there is certainly a group whose future prospects are bleak. For some older males, particularly those with little formal education, it is almost impossible to find a new job with similar pay and conditions to the one they lost. Some cannot find any other work, especially if they live in economically depressed regions of New Zealand. Older low skill women also face major barriers in the job market. As for young workers, education is now a critical factor in employment. For example in the mid 1990s, men in the 60-64 age group who held a university qualification were twice as likely to be working than men with no formal qualifications. These well-educated people also generally had long-term work prior to age 60 and above average income."

    For more information, see "The myth of disappearing work" by Paul Callister February 2000 (in pdf format) available on the Jobs Research Website at

    Source - Letter to The Jobs Letter by Paul Callister; also "The myth of disappearing work" by Paul Callister February 2000, pdf available on

    Hawkes Bay apple growers say that a labour crisis in the district is blackening a bumper harvest. The head of the Pipfruit Growers of NZ, Hastings orchardist Phil Alison says that 1000 jobs could be filled "in a matter of hours" with most orchards desperately advertising for pickers. Allison says that millennium celebrations and events such as America's Cup has sucked from the Hawkes Bay the usual backpackers, overseas students and seasonal workers.

    A spokesman for Employment Minister Steve Maharey says that Winz staff could be directed to find pickers from other regions, but growers will have to help with travel costs and accommodation. Phil Alison also says he has called on the government to open the doors to Pacific Islanders and Asians to help pick the crop in future seasons.

    Alison denies that pay is a factor in the staff shortages. An average rate in the area is $8-9 an hour gross, but 80% of the pickers are on higher contract rates which could see the best pickers earning over $300 gross a day.

    Source - The Dominion 1 March 2000 "Picker shortage threatens apple harvest profits" by Andrea Fox

    " Some matters are so self-evident that no time, money or effort need be wasted on them. Such is the case with the $130,000 inquiry into Work and Income New Zealand being carried out by Don Hunn, a former State Services Commissioner. Mr Hunn will advise the Government whether Winz is set up and managed satisfactorily and whether its culture is satisfactory. If any confirmation were needed that each question will surely be answered with a resounding "no", it came with the student loan debacle which erupted just as, the wide-ranging review was being announced.

    Winz's wretched performance speaks for itself. Any inquiry should have accepted those failings as a starting point and focused on how the department could be deconstructed or reformed with the minimum fuss and cost, so that benefit and employment services are again of an acceptable standard.

    Winz has racked up a remarkable trail of disaster in just two years. Remember that the National Government spent $5.5 million on consultants and contractors to create the one-stop shop which embraced the Employment Service of the Department of Labour and the Income Support Service of the Social Welfare Department. Yet a subsequent report, by Treasury and the State Services Commission, found that no clear strategy had been in place before work started on Winz.

    Remember the $1.3 million wasted on advertising to boost its corporate profile. And the other examples of extravagance, such as the chartering of a plane for a staff conference and a $100,000 golden handshake to a former staff member.

    The delays in processing student loan applications suggest, perhaps even more seriously, a deep-seated systems failure and incompetence. A year ago, when Winz first took the job of processing student allowances, it kept thousands of students waiting. So much so that the chief executive, Christine Rankin, apologised for the slip below the department's "normal high standards".

    Incomprehensibly, the chaos — and hardship for students — seems far greater this year. Winz suggested, by way of explanation, that the universities suffering most were those that had not adapted their computer systems to fit its technology. Waikato University, which had adapted, was cited as a shining example of a smooth operation. A day later, hundreds of Waikato students were as frustrated as those in other centres. Not only had Winz again failed to cope with the delays but it had allowed the chaos to mushroom.

    The episode is final proof, if any were needed, that the merger has failed. Perhaps Winz was too unwieldy; maybe the lack of clear strategy and petty jealousies between former Social Welfare and Department of Labour officials fatally undermined it. Certainly, branding exercises seemed more aimed at staff morale than the benefit of the department's clients. Whatever the reason, it is clear the union has failed — like many a corporate takeover before it. The task now is to repair the damage.

    Labour Party policy is to split Winz into welfare and employment arms. This, it says, will ensure a stronger focus on jobs. Labour would also retain Winz's name. That is probably a mistake even if, as it points out, millions of dollars have been spent rebranding the department. Given this relatively specific policy, and Labour and the Alliance's strident criticism of Winz when in opposition, it is strange that Mr Hunn's job has such an historical bent.

    It is to be hoped that his inquiry will, even if indirectly, advise the Government of the best way forward. That might be Labour's proposal. More probably, it will involve the axing of Winz and the resurrection of the Employment Service and Income Support. Such a scenario would see Ms Rankin take her chances in applying for a job with either of the services. It would also acknowledge that the name Winz now ranks so low in public esteem that there is no way back."

    — from "No way back for wretched Winz" New Zealand Herald editorial 21 February 2000

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