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| No.200 | 30 January 2004 | Essential Information on an Essential Issue |
 GLOBAL UNEMPLOYMENT AT RECORD LEVELS The ILO says global unemployment rose to record levels in 2003 GLOBAL CLIMATE CHANGE — 1 IN 10 ANIMALS AND PLANTS EXTINCT BY 2050 The biggest issue affecting global employment and livelihood is climate change.
ECONOMISTS ARE SAYING … NZ has been one of the fastest growing OECD economies over the last ten years. BUDGET WILL POINT TO "FUTURE DIRECTIONS" Cullen's "Future Directions" initiatives aim to lift low and middle incomes. GOVT EMPLOYMENT STRATEGY ASSESSMENT MSD report says focus now on quality of employment and productivity. MANUKAU YOUTH TRANSITIONS TEAM A youth transitions team in Manukau aims to support school leavers take the next step.
GOVT TO PAY FOR YOUTH TRAINING PILOTS "Targeted Training Grant" to assist teenagers who have to train away from home. SKILLED MIGRANTS WANTED HERE Immigration changes will see the active recruitment of skilled workers. BUSH'S MIGRANT WORKER PROPOSAL The US President proposes to legitimise illegal aliens who have jobs. UNEMPLOYMENT `GAP' NARROWS The gap betweeh the Maori unemployment rate the Pakeha rate has narrowed significantly. WANANGA NOW AS BIG AS FORESTRY Te Wananga O Aotearoa is now NZ's largest institution, perhaps contributing as much as forestry to the economy. TAMIHERE: $2.5M TO BUILD COMPETENCY IN MAORI TRUSTS The government will spend $2.52m improve the skills of publicly funded Maori service providers.
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Index to Features
15 December 2003Auckland businesses say it is now harder to hire skilled staff than at any time in the past few years. A Chamber of Commerce survey finds 41% of businesses reporting difficulties finding skilled staff. Over one-in-four NZ children are growing up in a household reliant on a benefit, according to the Ministry of Social Development. The government remarks that this proportion compares favourably with other developed nations. National MP Katherine Rich argues that the government should have better aspirations for children than a welfare dependent childhood. 16 December 2003Business groups are lining up in opposition to the Employment Relations Reform Bill. The Road Transport Forum says that the 27 February deadline for submissions doesn't give reasonable time for it to consult with its members. And the Employers and Manufacturers Association says it won't accept the short timeframe, and that it will take it until the end of March to consult its members and prepare its position. The gender pay gap is greater in private industry than in the public service. Women earn 13% less than their male counterparts in the overall NZ workforce, while women earn 7% less than men in public service jobs. Four Asian university graduates offer to work for three months for free in the hope of getting a job, illustrating the difficulty qualified Asians are having to break into the NZ labour market. The Waipa sawmill in Rotorua has been purchased after nearly three years in receivership. The mill employs 200 people directly and 100 more on contract and the new owner says there are no plans to shed jobs. The student loan income threshold (the amount at which students have to begin to repay their loan) rises by $208, from $15,964 to $16,172. Lincoln University Students Association president Andrew Kirton calls this rise "miserable", and says the changes will do nothing to address the "monster" of student debt. 17 December 2003The Holidays Bill passes into law. Increased pay for people working on public holidays, as well as extensions of sick leave entitlements will come into effect from April this year. Four weeks annual leave will become mandatory from April 2007. 18 December 2003An NBR-Philips Fox poll finds 80% of NZ'ers expect that unemployment will either decrease or stay as it is, and are optimistic about maintaining or improving their own standard of living in 2004. After four years of study, some pharmacy interns are being paid as little as $10/hr to get on-the-job experience before they can register as a pharmacist. The University of Otago pharmacy student spokesperson Philip Murphy says dozens of pharmacy students have been forced overseas or to accept badly paying jobs in NZ since the government changed the rules on the way drugs are dispensed. 20 December 2003Thousands of Argentines march peacefully through Buenos Aires demanding work. The demonstration comes two years after riots over the country's financial crisis that saw banks close, people's savings dissolve and unemployment skyrocket. As many as 5,000 jobs will go at British Airways. 21 December 2003A free scholarship scheme for Hawke's Bay and Taupo students to do their university study at the Eastern Institute of Technology in Taradale is successfully at keeping young people from leaving the Bay, according to marketing manager Brenda Chapman. First year fees are free and second-year students pay half price and Chapman says that when you include the cost of accommodation in the main centres, school leavers could save as much as $25,000 over the time it takes to obtain a degree by studying closer to home. 22 December 2003Just under 40% of people who are long-term unemployed (over 2 years) who were placed in "stable" employment by Winz have re-registered as unemployed or returned to a benefit. Up to 100 jobs will be created as meat processing company PPCS opens a third processing room at North Taieri near Dunedin. The new facility is expected to work two shifts of up to six-day weeks for what is usually a nine-month season. 36,000 jobs are at stake in Europe as Italian dairy company Parmala Finanziara defaults on a bond payment and may have to file for bankruptcy protection. 25 December 2003Christmas Day 26 December 2003A migrant worker tax scam centred in Hawke's Bay kiwifruit orchards sees six people prosecuted and 50 more under investigation by Inland Revenue. Alleged foreign fraudsters employed gangs of immigrant workers, collecting tens of thousands of dollars in GST and PAYE on the workers' behalf and then leaving or attempting to leave the country. 27 December 2003The UMR State of the Nation survey finds that 88% of NZ'ers are confident their job is secure in the year ahead. For three straight years, more NZ'ers have told the survey that the country is on the right track than those who say it isn't. 3 January 2004Women on the DPB who refuse to name the fathers of their children are unlikely to face stiffer penalties than they already do. About 18% of the people on the DPB won't name the father of their children and most of these have $22/wk taken off their benefit. Minister of Social Services Steve Maharey says the government wants to maintain a penalty but says that only 40% of these women knew penalties were being imposed on them. Maharey: "No wonder it's not changing their behaviour ... they don't even know they are being sanctioned." 5 January 2004The number of Palmerston North students using local foodbank services has doubled over the last three years, according to the Massey University Students Association. Green MP Nandor Tanczos says the government has condemned students to another summer spent begging on the breadline. Tanczos says foodbanks have become a regular feature of university life since the Emergency Unemployment Benefit was scrapped in 1998. 6 January 2004The start of the apricot season in Central Otago has orchardists "screaming" for fruit packers. Anne Hanning of the Central Employment Trust says orchardists need workers who are available for 3-6 weeks and they need to come with their own tents and transport. Rural mayors are concerned that school closures will severely impact on their communities. Local Government NZ's Rural Sector Group chairman David Owen says that the current School Review appears to be narrowly focused on educational outcomes. Owen: "Schools play a much larger role in rural communities than simply educating students. Schools are frequently the community centre, the contributor of social capital, and the maintenance of community networks within rural NZ. We strongly recommend that this wide role of schools is recognized by the government." The rising dollar is forcing some exporters to lay-off staff according to Gilbert Ullrich of Export NZ. Ullrich says it is particularly frustrating to see the property sector and retailers talking about a booming economy when the country's export returns are falling dramatically. 9 January 2004Over the last five years, 27.8 million Chinese workers have lost their jobs due to mergers or bankruptcies of state-owned businesses, with a further nine million jobs expected to go by 2006. The China Daily says 24 million new jobs are needed this year to absorb the labour force. 11 January 2004Building consents were issued for more than 3,000 dwelling in NZ in November, the highest monthly total for 30 years. The US economy generated just 1,000 new jobs last month, dashing hopes for the end to the "jobless recovery". The US unemployment rate drops from 5.9% to 5.7% as large numbers of people leave the workforce. 12 January 2004Some Australian hospitals are offering NZ doctors $138/hr plus free airfares and accommodation to cover shifts in regional public hospital emergency wards. A "distressed" NZ Medical Association chairwoman Tricia Briscoe says NZ can't compete with the Australian packages. Briscoe: "We know that young doctors, instead of locuming in NZ, are now heading overseas." Dr Tricia Briscoe says the government needs to find ways of cutting the student debt of medical graduates in order to keep them in NZ. Briscoe: "High medical student debt is the number one issue facing our young medical graduates. This is pushing our graduates overseas where they will earn more money. While NZ doctors have always gained experience overseas, our concern now is that they have little incentive to come back." The Resident Doctors Association says that between 200-400 doctors have permanently left the country each year since 1999. The number leaving annually is often in excess of the 250 medical student who graduate each year. United Future Party leader Peter Dunne calls on the government to address the country's "seriously flawed" student loan scheme by taking out some form of bonding of students studying in key professions. US dairy producers warn that a free-trade pact with Australia could drive a quarter of US dairy farmers out of business and, when including potential losses to the food processing sector, could cost the US up to 150,000 jobs. 13 January 2004A survey by Investment NZ of 24 tertiary education institutions predicts the number of information and communications technology (ICT) graduates will climb to 5,045 in 2007, a rise of 32% in the last five years. The Australian unemployment rate remains at 5.6% as the economy added 29,600 jobs in December. 16 January 2004The NZ dollar rises in value to nearly $US.70c and PM Helen Clark says the government is powerless to do anything about it. Clark: "I think most people accept that our dollar's been driven up because of the US dollar's weakness and no one expects the government to perform a minor miracle over that." 17 January 2004The British National Health Service may contract out up to 15% of its operations to private firms, according to Health Secretary John Reid. The Guardian Weekly says the British government is trying to crack hospital waiting lists by contracting in capacity from South African, Canadian and US firms. 20 January 2004National MP Murray McCully calls on the Minister of Immigration to grant exceptions that would allow visiting backpackers to legally be employed to work in orchards. Australian telecommunications company Telstra is to relocate 450 jobs to India. France Telecom will cut 14,500 jobs as the former monopoly pushes ahead with massive restructuring. 21 January 2004The ANZ job ads series finds job ads up by 18.5% in December, driven by unusually strong advertising in Auckland. ANZ economist David Drage says this shows firms are finding it increasingly difficult to find skilled labour. Three Malaysian nationals are arrested in Marlborough on charges relating to illegal aliens working in vineyards. Last month, eight Malaysians made official complaints that they were misled into believing their working status in NZ was legal. 24 January 2004Faced with reports that up to 400 NZ-trained medical professionals leave the country each year, Minister of Health Annette Kings says the government has no intention of keeping track of whether NZ doctors remain in the country or leave. King: "It would be virtually impossible to track their movements from one country to another." Resident Doctors Association secretary Deborah Powell says Annette King's statement is "ridiculous", as her union had helped track doctors' movements for years. Powell says it is irresponsible for the government to continue to ignore the doctor exodus. 25 January 2004Porirua builder Rob Askew, unable to find enough workers, blames the lack of skilled workers, rather than increased building activity. He says the building industry is suffering from a lack of apprenticeship training prior to the introduction of the modern apprenticeship scheme about five years ago. Up to 15,000 jobs worldwide will go as photographic giant Kodak cuts about 20% of its workforce. 27 January 2004The NZ Pipfruit Growers Association says that the harvest this year could be NZ's largest ever. It will require a workforce of about 35,000 in orchards, cool-stores and transport, a number it is unlike to get.
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GLOBAL UNEMPLOYMENT AT RECORD LEVELS— the number of people out of work and looking for work in 2003 reached 185.9 million, or about 6.2% of the total global labour force, the highest unemployment figure ever recorded by the ILO. The ILO says it is "cautiously optimistic" that the economic recovery will continue during 2004. But Director-General Juan Somavia says it's too early to say the worst is over. Somavia: "Our greatest concern is that if the recovery falters and our hopes for more and better jobs are further delayed, many countries will fail to cut poverty by half as targeted by the UN Millennium Development Goal for 2015. But we can reverse this trend and reduce poverty if policy-makers stop treating employment as an afterthought and place decent work at the heart of macroeconomic and social policies." The ILO says that the challenge over the next decade is to absorb the 514 million new entrants to world labour markets and to reduce working poverty. It warns that if jobless growth continues, it will threaten future economic growth: "No country can sustain growing unemployment rates in the long run, because diminishing demand will at some point limit economic growth. In addition, continued high rates of unemployment are a waste of human capital." Source _ Global Employment Trends 2004, International Labour Office, Geneva 2004, ISBN 92-2-115107-7; Press Release from ILO— The ILO Global Employment Trends webpage can be found at www.ilo.org/public/english/employment/strat/global.htm
 The biggest issue affecting global livelihood and employment over the next fifty years will
be climate change. The international community received "a wake-up call" earlier this month with
the release of a report published in the scientific journal
Nature. The report, compiled by the largest
collaboration of scientists ever to apply themselves to the climate change problem, studied six
biodiversity-rich regions around the world — covering 20% of the planet's land area. It found that 15%-37% of
all species studied could become extinct under climate warming scenarios that are likely to occur
between now and 2050.
The scientists point out that, as temperatures rise, many species will simply be unable to adapt or migrate to new habitats. The global warming will therefore bring with it one of the biggest mass extinctions since the time of the dinosaurs, 65 million years ago. The sheer scale of the disaster facing the planet has shocked those involved in the research. Much of that loss — more than one-in-10 of all plants and animals — is already irreversible because of the extra global warming gases already discharged into the atmosphere. Toepfer: "If one million species become extinct as a result of global warming, it is not just the plant and animal kingdoms and the beauty of the planet that will suffer. Billions of people, especially in the developing world, will suffer too as they rely on nature for such essential goods and services as food, shelter and medicines. Many developing countries also rely on nature-based tourism to generate much-needed foreign exchange earnings." The Guardian newspaper reports that where the UK is more or less on target to meet the "exceedingly modest " requirements of the Kyoto agreement to reduce greenhouse gas output by 12.5% by 2010, the United States is 30% over what would have been its target if the Bush administration hadn't "kicked Kyoto into touch". John Lanchbery, of the Royal Society for the Protection of Birds, argues that President Bush "... risks having the biggest impact on wildlife since the meteorite that wiped out the dinosaurs.". Lanchbery: "At best, in 50 years, a host of wildlife will be committed to extinction because of human-induced climate change. At worst, the outcome does not bear thinking about. Drastic action to cut emissions is clearly needed by everyone ... but especially the USA." — "Extinction risk from climate change"by C.D. Thomas et al., 2004, Nature, Vol 427, pages 145-148. (pub. 8 January 2004) Sources — "Extinction risk from climate change" Nature 427, 145 - 148 (08 January 2004); New Zealand Herald 8 January 2004 "Global warming threatens mass extinctions"; The Guardian 8 January 2004 "An unnatural disaster" by Paul Brown, and "The death of Species" Guardian editorial; UN News services 8 January 2004 "New report highlights importance of cutting greenhouse gases, UN official says"; The Age(Melbourne) 8 January 2004 "One million species extinct by 2050: scientists"
— A one-page summary of OECD Economic Outlook No. 74, New Zealand, 10 December 2003, can be downloaded (12kb) from www.oecd.org/dataoecd/6/34/20213243.pdf
The BERL report questions the government's apparent lack of recognition of the key role of population as the driver of economic development. BERL: "This is reflected in the current round of Education Ministry School Reviews which appear to have little relationship to the Economic Development Strategy of the appropriate region(s). This disjuncture, if not recognised and rectified early, will only make the various regional development initiatives more difficult to succeed." — BERL (Business and Economic Research Ltd) Media Release 17 December 2003, can be downloaded (PDF, 7 pg, 71kb) from www.berl.co.nz/ Source _ The Independent 17 December 2003 "OECD report provides lobby fodder to govt's critics" by Bob Edlin; OECD Economic Outlook No. 74, New Zealand; BERL press release 17 December "Population growth driving development outside Auckland," say BERL forecasters,
Source — The Dominion Post 30 January 2004 "Unemployment picked to drop to new low by 2006" by Vernon Small
 The government expects to have a $6.1 billion surplus by June 2004 and because the Minister
of Finance Michael Cullen is now convinced that the surplus is sustainable (and not cyclic) ... he is
preparing to spend some of it. Cullen points out that significant amounts of the surplus are already
committed to the Superannuation Fund, and increases to District Health Boards, Housing NZ, Education
and Defence. But even so, in the 2004 Budget (due in May) he will allocate about $700 million for a
package of new social spending initiatives being dubbed "Future Directions".
"Future Directions" aims to lift the incomes of low and middle-income families, the group that Cullen says have gained the least from the growth of the economy over the past 20 years. Details of "Future Directions" are sketchy at present, but Cullen is saying that all beneficiaries with children will get more, and all low-income families in employment will get even more. He also says some people can expect to see a clear effect of these measures before the end of 2004, but other parts of the package will progressively come into force over the coming four years. — raising the base level available to beneficiaries and the low paid. — "making work pay" by ensuring there is a sufficient gap between what people earn on a benefit and what they can earn in work. This is likely to mean an easing of the benefit abatement rates and marginal tax rates for those moving into employment. — simplification of the benefit and tax credit systems. This is likely to mean a streamlining of the benefit system by dropping add-ons (like the accommodation supplement and childcare assistance) in favour of a base benefit that covers most people's needs. It is also likely to make adjustments to the family tax credit that currently excludes beneficiary families and has had little adjustment for inflation since 1997. Small: "The eventual aim is to establish a minimum family income, depending on the size and location, with a long and gentle abatement rate of state help to ensure marginal tax rates are kept as low as possible. In theory it will minimise the disincentives to move from welfare into work, and make it worthwhile to subsequently move further up the income scale." Source _ The Dominion Post 18 December 2003 "$5b burning a hole in Cullen's pocket" by Vernon Small; New Zealand Herald 19 December 2003 "Families firmly on Govt agenda" by Brian Fallow; The Dominion Post 19 December 2003 "More for poor in Budget spendup" by Vernon Small; The Dominion Post 20 December 2003 "Here's where all the money goes" by Michael Cullen;
The report says that high growth in construction and manufacturing has driven much of the economic growth. The manufacturing sector's strength came from growth in exports while the construction sector gained from the high net migration inflows and low interest rates. Minister of Social Development and Employment Steve Maharey: "Despite our positive economic results ... we continue to have a large population of working age people who are out of the labour market, with many lacking the skills necessary to meet the needs of employers and industries. This presents a risk to New Zealand's economy in terms of our ability to sustain and support growth." Maharey reports that the government's focus is now turning to the issues of quality of employment and productivity. Maharey: "It is imperative that we build on our strong base of employment growth to produce better, higher income and more productive jobs for all. A significant priority of the present government is improving the quality of working lives by supporting job-seekers into sustainable employment and economic independence." The report identifies Maori and Pacific young people, and young people with disabilities, as groups who are at higher risk of not making successful transitions. These groups have become the focus of a government youth transitions work programme which aims to improve the transitions of at-risk youth into further education, training, work or other activities.
Source _ Employment Strategy: Progress to Date June 2002 _ September 2003 (published by the Department of Labour, December 2003); Minister of Social Development and Employment's press release, "Employment growth highlighted in new report", 17 December 2003.The three Youth Transitions Brokers will operate from five Manukau City schools, targeting 25 school-leavers from each school. There are about 4,000 young people who leave Manukau's 26 secondary schools each year over half of these will have gained good qualifications and will know where they are going next. However, Chief Executive of COMET Bernardine Vester says there is a large group of school-leavers who need extra support to get to the next step. Source _ Press Release: City of Manukau Education Trust 23 January 2004 "A destinations team approach to school-leavers"
Minister of Tertiary Education Steve Maharey says the pilot programme is part of the government's plan (in partnership with the Mayors Taskforce for Jobs) to provide all 15 to 19-year-olds with education, training, work or other options by 2007. Maharey: "The Targeted Training Grant pilot programme aims to assist a group of young people often overlooked — teenagers from low income families who have left school, don't qualify for benefits and are unable afford to pay living costs to undertake study away from home." Source _ Press release Minister of Tertiary Education Steve Maharey, December 23 2003 "Youth training programmes get the go-ahead"
 The government has made changes to the Skilled Migrant immigration criteria in hopes of
attracting overseas workers who have skills that are in short supply in New Zealand. Minister of
Immigration Lianne Dalziel says the focus has shifted from the Department passively accepting residency
applications to the active recruitment of the skilled migrants. Dalziel: "This policy is designed to end the
"professional-driving-taxi" scenario, which resulted from a flawed policy focused solely on migrants
gaining residence by meeting the set points, regardless of whether or not their skills were needed here."
Under the new policy, prospective migrants can submit "expressions of interest" based on a system in which points are allocated for job skills, work experience and qualifications, with particular emphasis on sectors that are identified as New Zealand's growth areas or where there are skill shortages. Bonus points will be awarded to people who have a skilled job offer outside of Auckland or who have a New Zealand qualification after studying here for at least two years. Source _Press release by Minister of Immigration, 17 December" Skilled Migrant Category open for business"; The Dominion Post 29 December ""Who NZ will let in _ new rules" by Martin Kay.
 Meanwhile, in the United States, President Bush has proposed a plan to allow illegal migrants
— mostly Mexicans — to legally hold jobs in the United States for the first time. It would make the
country's eight-million undocumented immigrants eligible for "temporary" legal status for at least six years,
as long as they are employed. The "temporary worker" programme has been hailed by business
groups but condemned as stingy and impractical by advocates for immigrants.
American labour advocates warn that the plan to have workers sponsored by employers would prevent them complaining about job conditions for fear the employer would have them deported. They also warn that employers could use the threat of recruiting low-wage immigrants against US citizens to prevent them seeking better wages or conditions. Susan Martin, former executive director of the US Commission on Immigration Reform, comments: "We're going to be creating a large number of basically indentured servants." Source _ Guardian Weekly 15-21 January 2004, "Bush proposes new deal for immigrants" from the Washington Post, by Mike Allen.
Source _ Sunday Star-Times, 18 January 2004, "The sum of us" by Anthony Hubbard;
 An independent report by the New Zealand Institute of Economic Research (NZIER) says the
Te Awamutu-based Te Wananga o Aotearoa is now NZ's biggest tertiary institute, and contributes
almost as much to the economy as the forestry sector. The Wananga has an estimated 50,000 students
and, according to NZIER, it has a much larger national economic and social impact (per student) than
is typical of other tertiary institutions.
The report estimates the Wananga contributes between 0.5% and 2% of gross domestic product, and says it is nearing the contribution made by the $3.5 billion forestry sector, or at least the $1.7 billion foreign student industry. The report: "Labour force participation rates have been significantly impacted by Te Wananga by the provision of extra trained and skilled workers without having to cover the costs associated with immigrants." Social Development Minister Steve Maharey says he shares these concerns and this was why the government had capped enrolments at tertiary institutions — a move aimed particularly at the Wananga, where growth had been most spectacular. Source — Dominion Post, 6 January 2004, "Wananga `has impact as big as forestry' _ NZPA.
 John Tamihere has announced $2.52 million in pilot
project funding to intervene in publicly funded Maori trusts to stop further embarrassing collapses. The
measure has been spurred by last year's collapse of Maori service providers including Donna Awatere
Huata's Pipi Foundation, the Tu Kahu low-cost housing scheme, and Te Hauora o Te Tai Tokerau
in Whangarei.
Tamihere's announcement will be followed this month by Maori Affairs Minister Parekura Horomia announcing an overhaul of troubled ministry Te Puni Kokiri. Tamihere has signalled that independent business analysts may look to oust the "old guard" in Maori trusts and set in place young, qualified managers: "I totally reject the notion that the Maori way of doing things means that Maori should be exempt from the standards, ethics and controls that any other organisation or business is subject to. There is nothing Maori about having your fingers in the till." Tamihere: "This programme acknowledges that as you build competency capabilities among disadvantaged communities, you will have some administrative and management problems... pretty soon those communities will come to the limits of their skill sets, and that is where issues of accountability and management can arise. If we have the systems in place to help communities and organisations develop the skills and processes to manage their way through the next level, then a lot of those difficulties won't occur."
Source _ Sunday Star-Times, 18 January 2004, "There will be no more fingers in the till _ Tamihere", by Jonathan Milne.
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