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| No.185 | 20 May 2003 | Essential Information on an Essential Issue |
 of key events over the last few weeks. $56m EDUCATION AND TRAINING FOR YOUNG PEOPLE COMMUNITY AND VOLUNTARY SECTOR OFFICE BUDGET: $1.6B NEW SPENDING MORE BUDGET NEWS STATISTICS THAT MATTER LOW WAGES HOLDING ECONOMY BACK POWER CUTS PAY PACKETS NOT ATTRACTING ENOUGH APPRENTICES TRAINEE RORT IN AUSTRALIA THE NEED TO RETAIN OLDER WORKERS VOICES ON THE EDUCATION AND TRAINING PACKAGE
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Index to Features
1 May 2003American Airlines, the world's largest air carrier, begins a new round of redundancies and is expected to lay-off a further 7,000 staff. 2 May 20031,150 British workers lose their jobs as Corus, formerly British Steel, closes its Stockbridge plant in England. The US unemployment rate rises to 6% as companies continue to shed staff. The US manufacturing sector has been cutting jobs for the last 33 months, the longest stretch of continuous manufacturing contraction since the mid-1940s. 5 May 2003Winz and Food Processors Waimate are co-operating to provide a worker bus service between Timaru and Waimate to support the corn harvesting season. Overdue student loan payments have risen from $61 to $81 million over the last year, and student loan borrowing has increased from $4.5 billion to $5.4 billion, according to the Inland Revenue Department. Nearly 400,000 people have student loans, the average amount being $13,660. Australian Treasurer Peter Costello says his upcoming Budget is not the tool for bringing down the country's unemployment rate. Costello: "Until you reform your industrial relations system, till you heighten the work incentives, till you take some of the burden off the employer's back, you are not going to make those kinds of inroads." In Australia, a 12.1% fall in job ads last month puts the number of advertised vacancies back to 1994 levels. ANZ economist Saul Eslake predicts Australian unemployment to grow to 6.5% in the next few months. An International Monetary Fund report says the New Zealand labour market is a key area where policy changes could potentially raise economic growth. It suggests that reducing disincentives for moving from welfare to work, tightening benefit requirements, and putting duration limits on benefits could help raise the labour force participation rate. The IMF report can be downloaded (44 kb) from here 6 May 2003ACT MP Muriel Newman welcomes the IMF recommendations that we should tighten-up on welfare. She says welfare reform should be the government's key economic priority. Newman: "ACT has always called for tighter controls on welfare _ including time limits, and the requirement for 40-hour work weeks of education, training or job search". Muriel Newman is concerned that 37,200 people have transferred from the unemployment benefit to the non work-tested invalids or sickness benefits since 2000. Newman says the sickness benefit is for people who are sick, not for people who want to avoid the work-test. The number of retail bank branch offices increased last year for the first time in 17 years. Kiwibank, which opened 279 branches, was responsible for almost all of the increase. English language schools and foreign student apartments now occupy 20% of all rental space in Auckland's central business district. Foreign fee-paying students contributed $1.7 billion to the NZ economy, making it the fourth largest export earner and may soon overtake the timber and fishing industries. The unemployment rate in Manukau City is now 6%, the lowest level since the 1980s. 4,000 jobs were created in the city in 2002 and over the last year Maori unemployment fell by 6.5% and Pacific Island unemployment dropped by 11% in the city. According to Manukau City, two-thirds of those still without jobs are Maori or Pacific Islanders, most of whom are unskilled and unqualified. Manukau Mayor Sir Barry Curtis says the result shows how important it is for workers to have the qualifications and skills that employers want. Curtis: "No young person should leave the education system without qualifications. We must work towards that goal". The Australian minimum wage rises 4% or $17 per week. US President George W Bush promises Australian PM John Howard a free-trade deal between the two countries by Christmas. 7 May 2003A lack of skilled workers has NZ's largest construction firm, Fletcher Construction, advertising for staff in Britain and South Africa. Fletcher's Peter Cowey says the company cannot find enough project managers and quantity surveyors locally. Bernard Gillon of house building firm Jennian says that a shortage of plumbers, electricians, plasterers, joiners and bricklayers has meant his firm could build only 400 of the 623 houses it had been asked to build last year. Minister of Immigration Lianne Dalziel says she is looking into addressing the skills shortages in the construction industry through changes to immigration policies. The Masterton Land Trust is making 264 grants of $600 each available to local students to attend any of NZ's 32 tertiary education institutions. 8 May 2003The Australian unemployment rate drops from 6.2% to 6.1% as an increasing number of people opt out of participation in the workforce. The Australian economy has been losing jobs for the last three months. The Australian Tourism Export Council says there has been a 25% decrease in tourist arrivals due to SARS. The downturn is expected to have a significant effect on the Australian economy because over 17% of country's workforce is employed in the tourist industry. 9 May 2003The NZ the unemployment rate rises from 4.9% to 5% (see this issue). Tourism NZ warns the industry to expect up to 50,000 fewer tourists to arrive in NZ over the next three months. The risk of contracting SARS is keeping thousands of would-be traveling Asians at home and Tourism NZ says that even Australian, British and US tourists are showing reluctance to travel. 11 May 2003NZ job ads increased by 2.2% on last month but are still 4.4% lower than at this time last year. ANZ economist David Drage says the numbers indicate continuing employment growth, but at a slower rate than we have had during the last two years. Industry NZ (INZ) has distributed $43 million to businesses as a major feature of the Ministry of Economic Development's "jobs machine". INZ says that establishing whether new jobs can be attributed to its schemes is difficult, but the Ministry will soon provide indicators of economic performance regarding the scheme. 12 May 200370 Wellington jobs and 40 Auckland jobs go as insurer IAG New Zealand restructures its head office. The move will see 60 new jobs created in Christchurch. 13 May 2003220 Methanex jobs and over 600 indirect jobs will be lost if the company mothballs its two petrochemical plants in Taranaki. The company says that until substantial new gas supplies can be found, the plants will be uneconomic. More girls than boys achieved National Certificate of Educational Achievement last year. Girls also outnumbered boys in gaining top marks in Sixth Form Certificate and in earning A level Bursaries. 14 May 2003Recruiting Russian teachers could help reduce the NZ teacher shortage according to Peter Wilkins of the Russia Education Export Network. Wilkins says Russia has highly trained, well-educated teachers. However, significant formal immigration issues would need to be overcome before Russian teachers would be allowed work permits by the NZ Immigration Service. 15 May 2003Minister of Finance Michael Cullen releases the government's Budget 2003
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$56M PLAN TO PUT ALL YOUNG PEOPLE UNDER TWENTY INTO WORK EDUCATION OR TRAINING BY 2007The $56.6 million package includes: expanding the Gateway programme to 12,000 secondary school students a year; funding 2,500 additional Modern Apprenticeships annually; reintroducing student allowances for some 16 and 17 year olds; and introducing specialist programmes to help young people make the transition from school to training or work. Last October, the government signed a Memorandum with the Mayors Taskforce for Jobs adopting the formal goal that by 2007, all 15-19 year olds will be engaged in appropriate education, training, work or other options which will lead to long term economic independence and well-being. The government estimates that up to 45,000 young people between 15 and 19 years of age are not in education or training, and Prime Minister Helen Clark says she does not want this wastage of young people to continue. Clark: " This Budget package signals our firm intention to realise this goal." Employment Minister Steve Maharey says that too many young people stop structured learning too soon and lack the basic skills needed in the modern workforce. He says the programmes being expanded in this Budget package will open up "a broader range of bridges" to recognise that school was not always the best learning environment for all young people. Maharey also points out that the government does not intend raising the school leaving age as part of this training strategy. — expanding the Gateway programme, which is currently being piloted in 63 schools, to all 1-5 decile secondary schools by 2007 (a total of 203 schools), meaning it will be available to some 12,000 students annually ($23.6m); — increasing the number of Modern Apprentices from the current 5,000 to 7,500 from 2006 onwards ($14.6m); — piloting an intensive support programme in the Auckland region for 100 young people annually who leave state care to help them live independently ($7.1m); — introducing regionalised programmes across the country targeting early school leavers to assist them to enter training, further education or paid employment ($5.4m); — expanding the support available to young people who have completed youth training programmes and are now in the workforce ($3.7m); — enabling 16 and 17 year olds who have completed year 13 at school to apply for student allowances ($1.9m); — piloting an individualised support programme for 30 young people in each of three communities in 2004 to test different ways of supporting them into work or further training ($290,000). Source _ Press Release from Helen Clark and Steve Maharey 12 May 2003 "Budget 2003: $56m plan to get all young people into education, training or work announced"; Press Release Jim Anderton Progressive Party leader 12 May 2003 "Young people get $56m for jobs, education or training"; Press Release Marilyn Brady Industry Training Federation "Modern Apprenticeships and Gateway supported by Industry Training Federation"; The Press 13 May 2003 `Brilliant' package for youth" by Jan McCarthy
BUDGET : NEW COMMUNITY AND VOLUNTARY SECTOR OFFICEReid believes a better model would be to put the new office and resources into the Community Policy Unit of the Ministry of Social Development. This would make those working in the office answerable to the same director as the policymakers and minimise the possibility of the community consultation processes being fragmented. Source _ Press release Hon Tariana Turia 2 May 2003 $3.6 million to strengthen community relationships"; The Jobs Letter editor Dave Owens interview with Tina Reid 12 May 2003; Statement to The Jobs Letter on CVSO Sue Bradford 14 May 2003
BUDGET : $1.6B IN NEW SPENDING BUT OTHERWISE, WAIT FOR NEXT YEARWhile the government had a $4 billion surplus this year, Minister of Finance Michael Cullen has refused to let his Ministers have a larger spend-up because he says he is wary that the surplus might disappear before the end of next year. Cullen says he is cautious because there are many ominous signs on both the international and local economic horizons — just the day before the Budget, Treasury warned that last year's economic growth of 4.4% may slow to as little as 1.9% in the coming year. Cullen has deferred any new financial assistance for low- and middle-income families or other measures that groups like the Child Poverty action Group have been calling for. Cullen says these things may be looked at next year if the government surplus has been sustained. Even then, he cautions: "Next year's Budget is not going to be some great cornucopia of riches spread thickly far and wide". 
Source _ New Zealand Herald 16 May 2003 "Better luck next year, maybe" by Audrey Young;
BUDGET : MORE TEACHERS
BUDGET : STUDENT FEE MAXEDStudents organisations don't agree and say that the new fee regulations could see some degree course fees rise by $1,000 per year. University Students Association co-president Fleur Fitzsimons warns that big fee rises are almost inevitable and this could signal a return to the days of conflict when university council fee-setting meetings were accompanied by student protests and occupations. Source — New Zealand Herald 8 May 2003 "Winning in front of the class"; The Dominion Post 16 May 2003 "Students anger boils over Budget" by Nick Venter and Michelle Quirke
MORE BUDGET NEWSSource _ Press release NZ government 15 May 2003 "Extra $260 million for housing";
Source _ Press release NZ government 15 May 2003 "Immigration initiative to target key skills;
Source _ Press release Minister for the Community and Voluntary Sector Green Party Community Sector spokesperson 15 May 2003 "Community internship programme extended";
Source _ Press release NZ Council of Trade Unions 16 May 2003 "CTU report on Budget 2003"
STATISTICS THAT MATTER— The unemployment rate is now 5% of the workforce, or 99,000 people. This is 1,000 more than last quarter but 5,000 fewer than at this time last year. — Over the year, the unemployment rate for European/Pakeha fell slightly from 4.2% to 4.1%, the Pacific Island rate fell from 9.7% to 8.3% but the Maori rate stayed unchanged at 10.8%. — The number of people on the unemployment register for longer-than six months dropped from 26,800 to 23,500 over the year. — There were 28,000 jobs added to the New Zealand economy this past year. People aged 55 - 59 years got nearly half (13,600) of these new jobs. — Full-time employment grew by 33,000 jobs (2.3%) for the year. Over the year there was a drop of 5,000 part-time jobs (-1.2%) even though the number of part-time jobs increased last quarter. — There was a drop in the number of "under-employed" people from 106,000 to 96,000 over the year. These are people working part-time but who would prefer to work more hours. — The labour force participation rate declined from 66.9% to 66.2% over the year. Source _ Press release Statistics NZ 13 May 2003 "Household labour force survey _ March 2003 quarter"
LOW WAGES HOLDING ECONOMY BACKCTU secretary Paul Goulter says he has real concerns if these wage increases are as good as it gets. Goulter: "There are some fundamental problems in the labour market. Wages are 25% lower than in Australia, many workers are not covered by collective agreements, and women are paid 15% less than men on an hourly basis. If we are to get growth in GDP per capita to move into the top half of the OECD, then real wages need to rise." Source — Press release NZCTU 6 May 2003 "Labour market not responding to shortages"; The Independent 7 May 2003 "Wage increases lag behind inflation rate" by Bob Edlin
POWER CUTS INTO PAY PACKETSSource _ New Zealand Herald 13 May "Electricity crisis fuels jobs fears" by Mathew Dearnaley
NOT ATTRACTING ENOUGH APPRENTICESBruce Howat, of Apprentice Training NZ (which manages apprenticeships in the engineering industry), told the Herald that he has 80 listed vacancies which he cannot fill. Howat: "Informally, the number would be closer to 200 on the basis that if we had young people we could go and talk companies into taking on an apprentice." Howat has observed that many young people are ill-equipped to start apprenticeships. He suspects this is because the amount of practical woodwork and metalwork in the new school technology curriculum has been reduced. And at home, opportunities to work with tools has been reduced because housing space does not allow for workshops and many children are in one-parent homes. Howat also says it is hard to get young people to comprehend that a secure and solid trade career would set them up for a better financial position than a lot of other options. Although engineering apprentices might start on $7 to $8 an hour, they would earn between $40,000 and $45,000 a year at the end of their three-year training. Howat contrasts this with a recent Herald report that university graduates started on $30,000-$40,000 — with substantial student-loan debts. Source — New Zealand Herald 13 May 2003 "Apprentice boost too small" by Simon Collins
WORKPLACE TRAINEE RORT IN AUSTRALIABurrow claims that training rorts like these are common and that the training schemes are dollar-driven rather than skills driven and are not meeting workers' needs. Burrows: "Existing employees should have the benefit of a genuine assessment of their skills needs, instead of token training measures designed to attract government subsidies". Source _ Worker Online issue No 175 "Recycled training stitch-up exposed
THE NEED TO RETAIN OLDER WORKERSThe OECD plans to study 20 countries and has just released reports on Sweden and Belgium that evaluates and makes recommendations on the policies that influence the work and retirement decisions that older people make. New Zealand is not on the OECD study list, but Australia will come under the microscope. The report argues that significant cultural change is needed to break down stereotypes about older workers and retirement. The Business Council of Australia is developing voluntary guidelines to help companies identify and implement "best practices" to retain older workers. — Age Can Work: The Case For Older Australians Staying In The Workforce by the ACTU and BCA, April 2003, can be downloaded (39kb) from http://www.actu.asn.au/papers/agedoc.html Source — OECD summary 23 April 2003 "Countries face slow growth and escalating welfare bills, unless older workers remain active"; Press release ACTU 23 April 2003 "Business, unions unite for older workers" |
