Letter No.119
6 March, 2000

8 February 2000

Opposition leader Jenny Shipley challenges the government to match the National Party's own performance in creating jobs and bringing down unemployment.

The Tainui tribe is to slash $40m off its balance sheet after acknowledging a series of investment blunders. Five years after the $170m settlement with the Crown over land confiscations, the tribe's $245m asset base has been eroded by 16%. The tribe will sell land, businesses and other assets in a bid to halve its debt within six months. Many of the tribe's 100-plus staff will also face job losses or changes to their positions.

A change in policy at Winz caused an extra million dollars worth of food grants to be paid out last month. Winz staff were instructed on Christmas Eve to approve all food grant applications until the end of January because of the potential financial strain beneficiaries faced from Christmas and Y2K issues. Consequently, Winz payment of food grants cost the department $1.04m more than the $1.6 million it spent on food grants in January 1999.

Green list MP Sue Bradford gives her maiden speech to parliament (see feature, this issue).

Alliance list MP Willie Jackson also gives his maiden speech. He says that the Maori language is facing a "catastrophic situation" and calls for a properly planned and resourced Maori broadcasting system.

9 February 2000

Thousands of students have received student loan contracts with incorrect information on it. Student Union President David Penny says that Winz will now need to prepare for as many as 22,000 students calling their 0800 number. Penny: "It remains to be seen if they can cope. We are feeling nervous about the reliability of student income and the potential for hardship in the student population over the coming weeks..."

Act MP Muriel Newman says that it seems that Christine Rankin's assurances to the social Services Select Committee last year regarding the future administration of student allowances and loans by Winz "were just hollow words..."

Associate Social Services Minister Ruth Dyson says the latest mistake was outside the control of Winz staff, and had been caused by a computer upgrade done by outside contractors, who had accepted the blame.

ANZ job ads survey reports that job advertisements in Wellington fell for the first time in more than a year. Job ads also fell marginally in Auckland and Christchurch.

Bank of NZ economists predict that the economy will produce another 50,000 jobs this year, on top of the 47,000 created in 1999. They say this will push the jobless rate below 6% by the middle of this year — for the first time since 1988.

World Trade Organisation boss Mike Moore declares that the WTO is "back in business" after its 135 member countries agree to start talks on free trade in farm products and services. The negotiations on services (areas like banking, insurance and travel) will begin at the end of February. Developing countries (which make up three quarters of the WTO membership) want to move towards accord on free movement of workers between rich and poor nations.

10 February 2000

Extra jobs are expected to be created in Hawkes Bay after global food giant Heinz Wattie announces it will close its only factory in Japan and transfer production to two local Heinz Wattie sites. The company will export an extra 1500 tonnes of food from NZ in the next two years.

US labour productivity has risen to its best level in seven years, helped by the fact that labour costs have fallen for the second consecutive quarter.

A few weeks before university classes start, it looks as though cheaper student loans are having little effect on university enrolments, with numbers remaining much the same as last year.

Police and immigration officials swoop on an Auckland building site and remove 60 Asian workers as part of a crackdown on illegal immigrant workers.

Hauraki MP John Tamihere gives his maiden speech to parliament (see feature, this issue).

11 February 2000

Economic development minister Jim Anderton defends his admission that he expects to get "a lot wrong" in his plans to boost jobs and business development. Anderton: "If we don't get some things wrong, then it means we are not taking investment risks. The whole point is that we will have to take risks..."

Union groups report that migrant workers in Auckland's construction industry are working for as little as $6.50 an hour for up to 16 hours a day. Ray Bianchi, secretary of the Amalgamated workers Union says: "It's total exploitation, there's no two ways about it." Bianchi believes the migrant workers, legal or illegal, are prepared to work for a flat rate of at least half that of NZ workers.

Social Services Minister Steve Maharey rejects the idea of work-testing older beneficiaries. Maharey says he would like to develop a range of options to help mature workers back to work.

Green Party MP Sue Bradford claims that hundreds of community group funding applications are "log-jammed" in the Winz head office. Bradford says that many groups, who have had their funding endorsed by regional commissioners, now faced a "paralysis" at head office. She says this was a symptom of how "dysfunctional and top-heavy" Winz has become when regional commissioners don't have the power to approve funding to community groups. Bradford also says the delays are forcing some groups to close.

A Winz spokesperson tells The Dominion that the department has only 30 outstanding applications: "We need to make sure the applications fill the criteria..."

12 February 2000

Victoria University will cut 30 staff in response to declining government funding and a drop in enrolments.

13 February 2000

Social Services Minister Steve Maharey announces changes to the student loans scheme which will benefit low-income, part-time students. The income threshold at which part-time students qualify for a full interest write-off will rise from $14,768 to $24,596, effective from January 1st this year.

14 February 2000

Former State Services Commissioner Don Hunn will head the Ministerial inquiry into Winz. State Services Minister Trevor Mallard says the review will focus on Winz core responsibilities, including whether the objectives in establishing the department are consistent with the government's mandate for improving social policy performance. Issues such as the department's strengths and weaknesses, the quality of its business plans and issues of style and culture will also be addressed.

Finance Minister Michael Cullen has indicated an extra $5.2 billion spending in the next three years. The mainly social spending is about $800m higher than Labour put forward in its pre-election policy.

Salary and wage rates for NZ'ers dropped 0.5% in the three months to November last year, and NZ'ers were also working longer hours, according to Statistics NZ. Government Statistician Len Cook says that the increase in hours is mainly in industries with lower average earnings, including manufacturing, construction, accommodation and restaurants.

Act leader Richard Prebble calls for NZ to adopt a currency like the American greenback, or join a monetary union with Australia to stop the volatility of the Kiwi dollar. The Kiwi is floundering around 14-year lows at $US49 cents, and has shed $US3 cents in the past month.

15 February 2000

Trevor Mallard refused to elaborate on an earlier claim he had made in The Dominion that "the head of a government department is incompetent, but cannot be sacked without a massive golden handshake." Mallard says it would be inappropriate for him to identify the person he was referring to.

Steve Maharey blames the student loan processing problems on the previous government. Maharey: "After the fiasco with allowance processing last year, the previous government went ahead with transferring loans to Winz without properly laying the groundwork." Winz has meanwhile moved to have loan processing available for longer hours each day, employed 125 extra staff and set up 60 extra phone lines.

Foodbanks have been established in some areas to help students who have been affected by the delays.

Federated Farmers has welcomed Richard Prebble's call for NZ to consider adopting the US dollar, or monetary union with Australia. The Dairy Board also cautiously welcoming a debate on the issue. PM Helen Clark, however, sees no merit in Mr Prebble's ideas: "It's not on the agenda".

Residents of poor suburbs in Auckland are 60 times more likely to be infected with tuberculosis (TB) than people in more affluent suburbs, according to the Auckland Medical Officer of Health, Dr Lester Calder. Calder: "TB is a disease of poverty. The poorer you are, the more likely you are to get it..."

Education Minister Trevor Mallard confirms that the Targeted Individual Entitlement (TIE) Scheme will be scrapped next year. An investigation into the scheme, that was supposed to get more poor children into private schools, has found that it was being used mostly by middle-class families.

Associate Minister of Maori Affairs Parekura Horomia gives his maiden speech to parliament (see feature, this issue).

16 February 2000

Act MP Muriel Newman says that Labour's ministerial review of Winz looks like a smokescreen for splitting Winz back into two departments. She says that splitting Winz would make it impossible for the one-stop shop case management system to work effectively.

Christine Rankin will be held accountable in the review into the problems processing student loans, according to Steve Maharey: "The buck certainly stops with Mrs Rankin. This is her organisation. We will be holding Winz accountable for their performance in this area."

Canterbury University reports problems with students unable to complete enrolments because Winz was not providing some students with loan authorisations needed to pay fees. Colleges of Education in Auckland, Wellington and Dunedin have also reported similar difficulties.

Education Minister Trevor Mallard says he was tearing his hair out over the student loan problems: "We were assured by the National government, and we were assured by Ms Rankin that the systems were in place for this transition to run smoothly..."

17 February 2000

Christine Rankin calls a press conference to explain delays in processing student loan applications: "Some of the problems are ours, and some of them sit outside of us..." She praised her own staff, saying there was no significant backlog with processing the loans, with 90% of applications being processed within 24 hours. Rankin: "Resignation is not on my agenda."

18 February 2000

Steve Maharey announces that the interest rate on student loans for the 2000-2001 tax year will be frozen while the government reviews the way the rate is struck. Student leaders are welcoming the government's decision.

20 February 2000

Air New Zealand is set to take over Ansett Australia, after buying News Limited's 50% share in the airline. The Australian Services Union, which represents workers in the airline, says that thousands of jobs will be shifted across the Tasman. The union believes that up to 2,000 jobs in administration, finance, IT and engineering in Ansett will shift to New Zealand, and the multiplier affect could see a further 5,000 jobs in Australia effected by the sale.

21 February 2000

Up to 500 white-collar jobs could be lost from Wellington if a proposal goes ahead to close the Dairy Board and make Auckland the headquarters of a mega dairy company. Economist Gareth Morgan of Infometrics says that the loss of so many jobs would be another "body-blow" to the Wellington economy, coming after banking restructuring and the carve-up of ECNZ.

About 59,000 families living in state houses will get cuts in their income-related state rentals by the end of the year. The move is expected to cost about $100m and will affect about 45,000 beneficiary households and up to 14,000 working households.

An Australian Morgan and Banks recruitment survey of 1000 people reveals that 65% believe it is more important for a woman to look good at work than it is for a man, and that most Australians believe that a woman's physical appearance is a main factor in success in her job.

22 February 2000

Steve Maharey says that student loans administration may be returned to tertiary institutions because of the problems Winz is having.

Hauraki MP John Tamihere has broken ranks with the government over its Hauraki Gulf Marine Park Bill, saying that its Treaty of Waitangi measures do not go far enough.

The Green Party opts to support the minority government's accident compensation legislation. MP Sue Bradford claims some credit for changes in the Bill which would help the self-employed, including farmers.

23 February 2000

Dairy Board boss Warren Larsen criticises speculation that jobs will be lost in Wellington if the Board relocates its activities, though he admits some job cuts are likely. Larsen has sent a personal note to every Wellington staff member telling them "no decision has been made to move to Auckland or anywhere else".

Regional polytechnics could face staff layoffs and course closures as enrolments dropped, according to Association of Staff in Tertiary Education President Jill Ovens. Ovens says that in places like the Wairarapa and Wanganui, young people have left their communities because they see no future in a region where the economy has collapsed. Ovens: "As a result, these polytechs have been on a knife edge for years." Waikato Polytechnic's enrolments this year are 67% of what had been projected, and Taranaki Polytechnic's is about the same.

24 February 2000

Act alleges that government Maori MPs want to replace Maori Affairs Minister Dover Samuels. Act leader Richard Prebble reports on Wellington rumours that eight out of ten Maori government MPs have asked that associate minister Parekura Horomia take over the portfolio.

The Inland Revenue is under-resourced and will ask the government for more money, according to the department's retiring commissioner, Graham Holland. His comments come as the IRD is making 600 staff redundant during restructuring.

The Dutch-British drug company Unilever will eliminate 25,000 jobs over the next five years and close 100 factories, in an effort to catch up with competitors.

25 February 2000

Dover Samuels says that the replacement coup rumours have probably been spread by Richard Prebble. He says that, with three associate ministers "of course everyone wants to be captain", but he had not heard of any planned mutinies. Helen Clark has restated her support for Dover Samuels, and Parekura Horomia has also "wholeheartedly" backed his minister. Horomia: "Any outside attempts to undermine us will not get any traction ..."

27 February 2000

Embattled Winz boss Christine Rankin says she vows to obey the frugal approach of the new government. She says that Winz has ruthlessly combed through its internal administration to meet the government's frugal approach to management, and its stated aim of restoring a public service ethic. Rankin: "This government has a no-frills approach, and we have gone through it and made sure there are no frills to anything. When we have a conference, we make sure there is not a single thing that could be frilly."

28 February 2000

About 35,000 NZ'ers, or the population of a small city, is departing NZ for Australia each year. PM Helen Clark describes the exodus as "shameful", saying many of them are highly skilled.

Clark is to visit Australia next week and is expected to strike a deal with Australia regarding the $200m Australia spends on dole payments to NZ'ers.

Education Minister Trevor Mallard has agreed to freeze staff levels at schools of less than 160 pupils for this year, if their numbers are falling. Educationalists hope that the moratorium will be the first step towards reducing class sizes.

29 February 2000

The government says it will cut bonus payments to state sector bosses if they don't meet objectives for Maori development. The move is one of a raft of measures drawn up by cabinet on how to close the gaps between Maori and non-Maori.

Lingere giant Bendon has laid off all its 235 staff at its Hamilton factory after failing to find a buyer for the plant. The plant will close on March 31st.

The government announces that the Ministry of Commerce will be renamed the Ministry of Economic Development and will oversee Industry NZ, a new crown entity that will develop and deliver industry and regional development programmes. Jim Anderton will run the new ministry, which he describes as a "jobs machine".