No.161 14 February 2002 Essential Information on an Essential Issue

of key events over the last few weeks.











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Index to Features


3 January 2002

A study by the Wellington Downtown Ministry finds a lack of consistency in the way Special Benefits are administered from one Winz district to another and that only one in 20 people who could qualify for the Special Benefits actually receives one.

6 January 2002

Minister of Education Trevor Mallard dismisses reports of a huge shortage of secondary teachers as a "massive over-reaction". Mallard says the 10% shortfall in teacher numbers at the end of the school year had been consistent with the two previous years. But Secondary Principals Association head Tom Robson says the large number of resignations received after the end of the term were not included in Mallard's figures. Robson says that if the community was aware of the extent of the teacher shortages it would be very alarmed.

8 January 2002

Jet engine maintenance company Christchurch Engine Centre is no longer aiming to cut staff numbers. There had been talk of more redundancies to follow the lay-offs made in November but a spokesperson now says that job cuts are no longer on the company's agenda.

9 January 2002

Japan may be poised for the largest banking default in history that could have an enormous impact on the world economy. The American Enterprise Institute for Public Policy Research estimates that Japanese banks have a net worth of negative $US1,000 billion (one trillion) which, it says, constitutes a systemic risk to the global economy. The Japanese secretary-general Taku Yamasuki says the government would bailout the financial sector if necessary.

10 January 2002

By December last year, 42% of the long-term unemployed who found work during 2001 had re-registered as job seekers. Act MP Muriel Newman says the figures indicate the emergence of a new underclass of people who cannot hold a place in the workforce. Associate Minister of Social Services Ruth Dyson says the figures are misleading because they include people who had re-enrolled as unemployed for short periods.

Job vacancies in Australia decreased by 1.9% in the three months to November, the fourth consecutive quarterly fall. Economists say that the new figures indicate a weak, but not collapsing, Australian job market. Job ads in Australia increased 2.2% over last month but are still 17.9% lower than at the same time last year.

11 January 2002

Large protests are held in Argentina as the government devalues the country's currency and limits the amount of money people can withdraw from their bank accounts. The economy is reported to be nearly at a standstill.

13 January 2002

The building and construction sector is expecting substantial growth this year as immigration reverses its trend from losing residents to gaining them. During the last few years NZ has been having a net loss of about 10,000 people per year but new residents are now out numbering those leaving by about 2,000 per month. Business forecasters BIS Shrapnel says the improving economy will continue to fuel immigration growth which will flow on to more jobs in the building sector.

14 January 2002

Michael Young, Lord Young of Dartingham, 1915-2002. Social Innovator.

Air NZ is to close its reservation call centres in London, Vancouver and Los Angeles. The company did not say how many jobs would be lost overseas but an additional 39 full-time staff would be employed in Auckland to do the extra work.

15 January 2002

In the monthly ANZ survey, job ads in New Zealand increased by 0.7% over last month but are still 6.6% lower than at this time last year.

Marketing company LV Martin is closing its mail order business with the loss of 40 staff. The company will continue its retail operation and chief executive Trevor Douthett says he is optimistic about finding new jobs for most of the redundant staff.

The Ford Motor Company says it will cut 23,000 jobs as it closes five of its North American plants over the next few years. This number is on top of the 12,000 workers it laid off last year.

16 January 2002

Investment firm Merrill Lynch cut 15,000 jobs or 20% of its workforce last year.

18 January 2002

The Immigration Service says it is on-track to meet its skilled migrant targets. Government policy says that 60% of the 45,000 people projected to arrive as immigrants must have business or other work skills and the Service says it is exceeding that percentage so far this year.

21 January 2002

The number of overseas students in NZ has doubled since 1999 and last year this group brought more than $1 billion dollars to the NZ economy. About 45,000 foreign students came to NZ last year, 80% were from Asia.

Airlines around the world have cut 400,000 jobs since the September 11 attacks. Many airlines have cut between 15% and 23% of their staff.

Peter Turnbill of the Cardiff University Business School alleges that airline managers are using the September 11 events as an excuse to drastically restructure of their companies without the customary consultation with staff.

23 January 2002

Tranz Rail announces 60 jobs will be cut from its Lower Hutt locomotive workshop and nine from its Dunedin facility.

28 January 2002

US retailer Toys R Us plans to cut 1,900 jobs as it closes 60 of its toy stores.

30 January 2002

The adult minimum wage is to rise with the cost of living by $.30 to $8/hr. The youth (16-17yrs) minimum wage will now be pegged at 80% of the adult rate rather than at 70% and the adjustment will see a one-off $1/hr rise in the youth rate to $6.40/hr. The training minimum wage, for adults being trained on the job, will be paid at the same as the youth rate. The minimum wage is paid to about 5,500 adults and 6,900 young people.

2 February 2002

Boosted by the biggest increase in government spending in over a decade and a rise in consumer spending, the US gross domestic product expanded 0.2% ... officially lifting it out of recession.

3 February 2002

Verizon Communications, the largest local telephone company in the US, cut 16,000 jobs last year.

4 February 2002

International bank Credit Suisse First Boston laid-off 2,500 employees last year.

5 February 2002

The number of skilled immigrants admitted to NZ will be increased by 3,500 this year. Minister of Immigration Lianne Dalziel says the government is extending the residence approvals because of the pressures from applications.

6 February 2002

Student Job Search reports that 26,700 students have been placed in employment to date this summer, a 13.6% increase on last year. Almost 3,500 of the students have been placed in full-time jobs for four weeks or longer.

8 February 2002

The Southland Needs You campaign filled about 60% of the one hundred-odd vacancies it advertised in November last year with Southlanders getting most of the jobs. 25 people from beyond the province got jobs through the promotion.

Argentina's unemployment rate rose to 22% at the end of December. The Argentine peso has lost 55% of its value since it was unpegged from the US dollar.

LAST Diary

Michael Young

“ Were we to evaluate people, not only according to their intelligence and their education, their occupations and their power, but according to their kindliness and their courage, their imagination and sensitivity, their sympathy and generosity, there would be no overall inequalities of the sort we have got used to.”
Michael Young, Lord Young of Dartington

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Statistics That Matter

  • The latest employment statistics show rises in both the rate of unemployment and the rate of employment. This reflects a growth in the number of people entering the workforce and a rise in the number of "discouraged" people re-entering the labour market. We include our regular summary in this issue. Some highlights:
    — Unemployment rose in the December quarter from 5.2%. to 5.4% This was the first increase in unemployment in six quarters but the rate is still lower than it was at this time last year.
    — The increase in unemployment has been borne by Pacific Island people and Maori. Unemployment among Pacific Island people it was up from 8.2% to 9.9% and for Maori it was up from 12.3% to 12.9%.
    — Unemployment declined for European/Pakeha from 3.8% to 3.7%. At the end of 2001, unemployment rates for all ethnic groups were lower than they had been at the end of 2000.
    — Youth unemployment increased slightly and, at 14.8%, young people are the group worst affected by unemployment.
    — Employment grew by 0.9% or 16,000 jobs, nearly all of them full-time. The number of new jobs is only just above the 14,400 working-age people who joined the workforce over the quarter. Statistics NZ attributes much of the employment gain to the 9,200 immigrants who settled in NZ this last quarter, most of whom are presumably working.
    — A greater percentage of people of working age are now actively seeking work. The labour force participation rate is now 66.4%, a 14 year high, and indicates that more people were being drawn into the paid workforce. The male participation rate was 74.2% while the female rate was 59.0%.
    Source — Statistics NZ "Household labour force survey December 2001 quarter Commentary"; Press Release: Statistics NZ 8 February 2002 "Unemployment rate at 5.4%" Brian Pink; Press Release: NZ government 8 February 2002 "Government welcomes increase in employment; Press Release: NZ Council of Trade Unions 8 February 2002 RB needs to take account of labour market trends" Lyndy McIntyre; Press Release: Employers and Manufacturers Association Central 8 February 2002 "Unemployment figures supports skills concerns; Press Release: Deutsche Bank 8 February 2002 "Household labour force survey (Q4 2001)"; Weekend Herald 9/10 February 2002 "Migrants swallow jobs increase" Brian Fallow; The Dominion 9 February 2002 "Economy still creating jobs" NZPA; The Daily News 9 February 2002 "Job growth lags behind immigration" NZPA


  • New Zealand's skills shortages continues to make news. The central branch of the Employers and Manufacturers Association says that despite increasing numbers of people joining the workforce over the last 18 months, the lower North Island is suffering from "chronic skills shortages". In greatest demand are engineers, industrial electricians and mechanics. Recruitment agencies say that part of the reason for the shortage is the mobility of the workforce. When job opportunities dried up in NZ over the past two decades many skilled NZ'ers were lured overseas to work where they were very well paid.

    The Labour Department's Geoff Bascand agrees that skills shortages are a problem but he says that the rising number of apprenticeships and the turnaround in immigrant numbers will continue to improve the situation. A Labour Department survey found that 25% of employers had difficulty finding skilled staff this last quarter, down from 39% the previous quarter.

    Source — The Dominion 8 February 2002 "Skills shortage stunting regions _ employers" Ross Henderson;


  • The government has released a progress report on its overall employment strategy. The original strategy outlined six goals which it said had the potential to minimise persistent disadvantages in the labour market and maximise the number of jobs and the level of earnings. With Employment Strategy: Progress to Date, Minister of Employment Steve Maharey gives an overview of what has happened with employment and unemployment from July 2000 _ December 2001, and points to where the government is going with employment policy in this election year.

    The Good News: the number of unemployed people and the unemployment rate are at 13 year lows and unemployment is now lower in every district than it was at the beginning of last year. This has been achieved while the government ran a budget surplus and contained inflation, the economy grew at 2.2% and wages grew by 3.4%. Employment rose and unemployment fell for all ethnic groups.

    Concerns: Maori unemployment is still over three times that of the European/Pakeha rate and Pacific Island unemployment is well over twice the European/Pakeha rate. Over the last ten years there has been an increasing percentage of young people leaving school with no qualifications and the report highlights that people with no qualifications are overly represented in the unemployment figures. Some 9,000 young people left school with no formal school qualifications between 1999 and 2000 and up to 20% of 15-19yr olds have low or no formal qualifications. For Maori this lack of qualifications is up to 38% of school leavers and for Pacific Island people it is 27%. The relationship between a lack of qualifications and unemployment is illustrated by the fact that 49% of registered job seekers have no qualifications ... a figure that reduces significantly for people with qualifications.

    Maharey: "Key aims for the future are to sustain the current rate of employment and economic growth, further reduce unemployment levels and develop an economy that encourages people to participate. New Zealand's competitive advantage will relate in large part to our capacity to generate new ideas and to use these ideas to create innovative products and services across the entire economy. This transformation can only be achieved with a creative and adaptive workforce, fostered through an education and training system that is flexible enough to address the needs of both the current and the future workforce.

    Addressing skills improvement forms the bulk of what the government sees as the work it front of it. The report concludes that education and workforce training, beginning with Early Childhood Education and continuing with literacy and numeracy and on to developing higher levels of generic skills are now government priorities. The report also identifies improvements were needed in aligning training resources to industry needs, attracting ex-patriot NZ'ers back home, assisting communities to generate their own employment opportunities and creating opportunities for groups who are over-represented in unemployment figures.

    Employment Strategy: Progress to Date: July 2000 — December 2001, download from: http://www.executive.govt.nz/minister/maharey/employment-strategy-update-feb02.pdf

    Source — "Employment Strategy: Progress to Date July 2000 _ December 2001" a publication from the Office of the Minister of Social Services and Employment. Download a PDF version from: http://www.executive.govt.nz/minister/maharey/employment -strategy-update-feb02.pdf; Opportunity, "Capacity, Participation, Government Employment Strategy 2000" a publication from the Office of the Minister of Social Services and Employment


  • The government will be easing the abatement rate schedule for people earning money while on the domestic purposes or widows benefit from August this year. Currently Winz deducts any extra income from benefit payments at 70 cents on every dollar. But the new regime will abate that extra income at just 30 cents and hopes to create a greater incentive for people to take on part-time or low-paid work. A spokesperson for Steve Maharey says the current benefit abatement rates are a poverty trap that keeps people on benefits rather than helping them move into paid work. The scheme will initially cost millions but is expected to save the government money in the long-term. These changes to DPB and widows abatement rates may foretell similar changes across other benefits in the future.
    Source — The Daily News 8 February 2002 "Dole-on-top-of-wages proposal" NZPA; New Zealand Herald 8 February 2002 "Dole could top up wages for first three weeks says Govt" NZPA; Briefing notes on the "Social Security (Working Towards Employment) Amendment Bill; Interview with Chris Eichbaum at the office of the Minister of Social Services and Employment.


  • Three quarters of tertiary students did not receive a student allowance in the year 2000 because their parents' income was too high. Two years earlier, 34% of students had qualified for allowances but now it is less than a quarter, including only 24% of Maori students.

    NZ University Students Association (NZUSA) president Andrew Campbell says that it is not that families are wealthier now but that the family income eligibility threshold for the student allowance has not moved along with wages since it was introduced ten years ago. A family whose income is low enough to make them eligible for a Winz accommodation supplement and community services card may still earn above the income threshold for the student allowance. If they jointly earn above $28,080 per year, parents are expected to financially support their tertiary student children.

    Student groups throughout the country are calling for allowances to be paid to all students, as borrowing to pay for living costs is a big contributor to the mushrooming student debt. A survey commissioned by the NZUSA found that student debt rose by 18% between 1998 and 2000 and tuition fees rose by 21%. Student debt it is growing by $1 million/day.

    Source — The Dominion 10 January 2002 "Students `too rich' to get help" Leah Haines; New Zealand Herald 10 January 2002 "Student benefit only to poor" NZPA; The Dominion 28 January 2002 "Student debt rises by 50%" Kim Ruscoe; Stuff.co.nz 28 January 2002 "Student leader wants allowances for all students"; Newsroom.co.nz 28 January 2002 "Student debt prompts free education call" Marie McNicholas;

  • Alliance Party leader and Deputy Prime Minister Jim Anderton also criticises the student loan scheme saying it punishes people for obtaining the skills that New Zealand so vitally needs, and he reiterates the Alliance Party's call for free tertiary education. Anderton said that if the country is to become a knowledge economy then much more money needs to be spent on tertiary education and the taxpayers must understand this and be prepared to meet the cost.

    Student allowances and the student loan scheme are already becoming election issues. Minister of Tertiary Education Steve Maharey announced that the government would be releasing a discussion paper on reform options for the loan scheme in May. But he warns that the government is not in a position to scrap the scheme or to throw more money at tertiary education.

    Association of University Staff president Grant Duncan says he is concerned that the government is concentrating on student support issues but does not seem to be to addressing overall resourcing. Duncan says it is time the government substantially increased its investment in the quality of university education. Duncan: "Making university education more financially viable for students is only one side of the coin. The question of student loans cannot be considered in isolation from the question of university funding as a whole."

    Source — The Dominion 24 January 2002 "Maharey opens up debate on student loan scheme reforms" Leah Haines; Press Release by NZ Govt 28 January 2002 "Student survey timely reminder of National's tertiary legacy"; Press Release by NZ Govt 28 January 2002 "How to get rid of the student debt burden"; Press release Association of University Staff 24 January 2002 "Resourcing of tertiary ed must be addressed"

  • National Party's Maurice Williamson admits that his government "got it wrong" on tertiary education funding. Williamson has put forward two remedies to alleviate the burden of the student loan scheme: he would reduce fees for courses in subject fields experiencing skills shortages, and he would gradually write off the debts of students who stayed in NZ and worked. NZUSA's Andrew Campbell is sceptical of Williamson's solutions, saying they would only help people who were already doing well and would discriminate against those who go overseas to get valuable experience.
    Source — Stuff.co.nz 28 January National floats reward system for student debt"; The Daily News 29 January 2002 "Thumbs down to Nat student reward plan" NZPA;


  • Prison inmates are now eligible to take out student loans to pay for their tertiary education course fees. Steve Maharey says that extending loans to inmates provides them with further employment opportunities once they are released and this is expected to reduce re-offending. Maharey says inmates could mitigate the financial burden of the loans by not having to borrow to pay for their living costs and accessing hardship grants.

    National Party corrections spokesperson Brian Neeson says it is outrageous that people who committed crimes could get loans the same way as non-criminals and also be given grants to help pay them off.

    Source — The Dominion 4 January 2002 "Prisoners apply for student loans" Glen Scanlon


  • Research by the Wellington Downtown Ministry has found that one out of 20 people who could qualify for a Winz Special Benefit actually receive one. The study also finds significant inconsistencies in the number of Special Benefits granted from one Winz office to another with the spread ranging from one in two benefits granted in Kapiti to one in 150 in Te Kuiti.

    Special Benefits are available to people who suffer financial hardships that meet specific legislated criteria but are unable to pay for them. Downtown Ministry director Kevin Hackwell says the study shows that tens of thousands of the poorest households in the country are missing out on benefit entitlements.

    Ministry of Social Development chief executive Peter Hughes agrees that the research raises serious questions that need answering. Hughes says the Ministry is committed to administering benefits consistently and that a working group was being set up to investigate the claims and will report back by the middle of the year.

    Source — New Zealand Herald 4 January 2002 "Poor miss out on benefits" Francesca Mold and NZPA; The Dominion 4 January 2002 "Beneficiaries missing out on help _ survey"

  • The Palmerston North Poverty Action Group has threatened to publish names and photographs of about a dozen local Winz staff which the Group says are mean-spirited, exhibit inappropriate behavior and tell claimants they are not entitled to income support when they are. Spokesperson Ian Ritchie says that after three years of trying to get Winz service improved the Action Group is frustrated with the lack of progress.

    Government and the Public Service Association officials have condemned the Group's threat. Ministry of Social Development chief executive Peter Hughes says that identifying individual staff members whom the Action Group says provide poor service would endanger staff. PSA national secretary Richard Wagstaff says that identifying staff who were simply doing their job amounts to a violation of privacy and will threaten their safety.

    Source — The Dominion 1 February 2002 "'Mean-spirited' Winz workers may be named" Ross Henderson; The Daily News 1 February 2002 "Plan to target welfare staff on attitude" NZPA; Press Release: Public Service Association 31 January 2002 "Beneficiary group threats unacceptable" Richard Wagstaff; Press Release 31 January 2002 "Maharey must take responsibility for staff threats" Bob Simcock;


  • The Holidays Act is being amended but the minimum number of weeks of annual leave will not be altered. Sickness and special leave entitlements will remain at five days per year but can now be accumulated to up to 15 days. Bereavement leave of up to three days will be in addition to, rather than included with, the sick leave entitlement. People required to work on a statutory holiday will now be paid time and a half of their ordinary pay (rather than their ordinary rate) and staff must still be allowed a day-off in lieu.
    Source — The Dominion 2 February 2002 "Holiday pay move alarms business" Christine Langdon; New Zealand Herald 2 February 2002 "More pay in holiday overhaul" Vernon Small


  • Britain is reviewing its working holiday visa entitlements for young NZ'ers and other Commonwealth citizens. NZ'ers aged to 26yrs may currently be granted two-year visas to live and work in Britain on the provision they do not work in their own profession. The scheme was aimed at young visitors filling casual jobs in the British economy rather than young professionals wanting well-paid jobs to advance their careers or compete with qualified Britons. Spokesman for the British High Commission Bryan Nicolson says an announcement will be made in April that is likely to include some "tweaking" of the current scheme such as shortening the visa period from two to one years but also allowing people to legally work in jobs they are professionally qualified for.

    On another side of the British immigration scale, people who have exceptional skills, experience or achievements and want to immigrate to Britain will soon be able to do so without finding a job first. The Highly Skilled Migrant Programme is a points system based on education, work record, earnings and education. If a person qualifies they will be allowed to live and work in Britain if they promise to make it their main home, continue to work in their field and support themselves and their families.

    Source — New Zealand Herald 14 January 2002 "Cream only need apply" Bronwyn Sell; www.ind.homeoffice.gov.uk; The Dominion 26 January 2002 "Big OE may not be so big after British shakeup" Tracy Watkins; New Zealand Herald 26-27 January 2002 "Great Kiwi OE under threat" Eugene Bingham

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