— Workforce, replaces the activities of New Zealand Immigration Service (NZIS) and will have links to other government departments working on employment (the Ministry of Social Development) and skills (the Tertiary Education Commission).

— Workplace, replaces the activities of the Occupational Safety & Health Service (OSH), the Employment Relations Service (ERS), and will also focus on policy advice on issues of work-life balance and pay equity, and ACC matters.

— Work Opportunities, replaces the activities of the Community Employment Group (CEG) and will continue to work with iwi, trusts, and regional development agencies.

— the "new look" also includes four other Deputy Secretaries which will focus on corporate activities and Maori perspectives. These include Deputy Secretaries for Strategy (Marie France), Corporate (Brian Sage), Legal (Graeme Buchanan) and Maori (Meka Whaitiri).

With this restructure, the CEG/Work Opportunities staff also get a new boss in Deputy Secretary Andrew Crisp, who comes to the Labour Department from the Regulatory and Tax Policy Branch of Treasury. Charlie Moore, the former CEG General Manager, has been re-assigned to other activities in the Labour Department.

The Social Entrepreneur Fund — the focus of so much public criticism in recent months (see The Jobs Letter No.204) — has been formally terminated and the funding allocated for this programme has been transferred to the Ministry of Social Development. MSD intends to use the money "to support social development initiatives in communities", and grants under the new scheme will need Ministerial approval.

Sources - Press Release Department of Labour 1 July 2004 "New Look Department of Labour" James Buwalda Chief Executive, organisation chart from DoL website at www.dol.govt.nz; New Zealand Herald 29 June 2004 Colin James "Innovation with a hatchet"; New Zealand Herald 2 July 2004 "Govt may ask for money back over hip hop trip"

Opposition political parties and the media have seized on the reports as proving yet another example of the government wasting public money. National MP Murray McCully has argued that the reports confirm to him that the "Closing the Gaps" strategy (renamed as "Reducing Inequalities" in 2000) had "... a great deal to do with political correctness and the securing of the Government's political base, and nothing to do with advancing employment opportunities for Maori."

The New Zealand Herald reports that the Labour Department had originally refused to release the reports under the Official Information Act. But it has done so now because the National Party appealed to the Ombudsmen's Office, which ruled that the material should be made public.

Since the release of the reports, the Labour Department has confirmed that it has called in the police to investigate two cases of alleged fraud by community groups involving money given out under the scheme. And Deputy Secretary Andrew Crisp has told a Parliamentary Select Committee that another of the grants is under external review by the accounting firm KPMG. He did not disclose any other details of who these grants involved.

— guidelines restricting funding to established organisations were often ignored.

— a prohibition banning the payment of salaries to grant recipients was routinely "subverted".

— funding intended to assist Maori to develop communally owned land was directed toward exploratory rather than well-developed projects as intended.

— money intended to develop the leadership potential of Maori women in community organisations was spent on "basic/personal skill development for groups of women with unclear connections to community groups".

The grant reviewers said it was sometimes difficult to reconcile funding applications with the grants that were approved. In two cases, groups seeking salaries were told money was not available for that purpose but were then granted what they sought. In one of the cases the application for funding for a "part-time coordinator" was altered to "the establishment of office systems" by the CEG national office.

The second "capacity building" report found little improvement. The reviewers concluded that "...due to the lack of connection between the types of projects funded and the policy aims for the initiatives, there was minimal achievement of the desired skill development, employment and enterprise development outcomes."

Capacity Building Initiatives, Phase 1 & 2 Evaluation (available on the Department of Labour website) Phase One: The Implementation Process (PDF 56pg, 398kb), Phase Two: Short Term Outcomes (PDF 71pg, 518kb), can be downloaded from here

Addressing questions at a Parliamentary Select Committee, Acting Social Development Minister Ruth Dyson said that the Government wanted better accountability of the use of public money. Dyson: "You can have my cast-iron guarantee that we are determined to ensure that we have much better accountability in the use of public money than we have seen reported in these reviews."

Deputy Secretary Andrew Crisp re-iterated that the Department had put in place new guidelines for all CEG grants on April 1st ... and, till further notice, all grants would continue to be signed off by the Secretary of Labour, Dr Buwulda.

Sources - New Zealand Herald 7 July 2004 "Flagship grants scheme in trouble" by Helen Tunnah; New Zealand Herald editorial 7 July 2004 "Poor Custodians of our money"; Stuff website 6 July 2004 "report casts doubt on employment grants"; The Daily News 7 July 2004 "Report: Cash for closing gaps wasted" by Nick Venter; The Dominion Post 7 July 2004 "Closing the Gaps wastes millions" by Nick Venter; New Zealand Herald 8 July 2004 "Dept told to clean up job project" by Helen Tunnah; Press Release National Party 8 July 2004 "Anger over capacity building lolly scramble" Katherine Rich; Press Release ACT Party 7 July 2004 "Another Labour Failure left to officials" Dr Muriel Newman; New Zealand Herald 9 July 2004 "Mystery Funding under spotlight" by Kevin Taylor; The Dominion Post 9 July 2004 "Police Probe more community grants" by Nick Venter;

VOICES Perhaps the more revealing comments in the CEG "capacity building" reports came not from the reviewers ... but directly from the CEG staff and fieldworkers themselves. Some extracts: " We were hassled to get in projects. [The team co-ordinator] was saying just get them some training, but I wouldn't, the groups were not ready… there were some project possibilities but they weren't ready they couldn't even manage their own time." (from Interview 1) " There was pressure on me to spend the money, in April there was three months until the end of the financial year, ideally we'd have everything in by the end of May, we had three months to spend all the money, [X] went on sick leave, and there was all these groups that hadn't got to the application stage yet, the timeframe became shorter and capacity building initiatives just became an irritation, pressure to spend the money." (from Interview 2) " You tell the group they can't use the grant for a salary but then you tell them you can contract someone from your group to do the work - it makes it so unclean." (from Interview 8) " Realistically how much is being used for consultancy and how much for the group to do the work? We're just making [the projects] fit the guidelines - it's probably being used for something quite different, we don't ask the groups to prove that they're using a consultant." (from Interview 13)

Rick Barker says the falling welfare rolls demonstrate the government's success at moving young people off welfare and in to work or training. Barker: "The government has put a real emphasis on ensuring young people get a good start to their working lives. These figures show the approach is working. "

"New programmes like Modern Apprenticeships and Gateway, and the increasing number of young people going to polytechnics and universities, are ensuring that young people are leaving school committed to building a future for themselves. This stands in stark contrast to the 1990s, when young people were left in misery on the unemployment scrap heap. The challenge now is to drive youth unemployment levels even lower. Work and Income are currently implementing youth-focused programmes in each of their regions to achieve this goal ..."

Source - Press Release Rick Barker NZ Government 28 June 2004

Tradestaff managing director Kevin Eder: "Tradestaff plans to advertise in the UK and Australia and is also using the internet to promote the campaign. There is a shortage of qualified carpenters in Christchurch in particular at the moment. We can, through our national network, often bring carpenters from around the country - and we may well find some in this campaign. But at the moment, every area is busy and we have a particular need in Christchurch."

Experienced and skilled tradespeople are a real commodity in New Zealand at the moment, encouraged by a buoyant domestic economy. The demand has had the effect of pushing up pay rates, making the trades a more attractive option for many young people as they think of career options. Tradestaff has been working to address the skills shortage for some time now — its carpentry apprenticeship programme has 17 people enrolled in Christchurch.

· Meanwhile, a Feilding manufacturer is praising a new scheme to bring skilled German workers here. Recent changes in the European Union have created a surplus of skilled labour in Western Europe. This has prompted Germany's Federal Employment Service to seek jobs as far afield as New Zealand, and Steve Bond from Fibreglass Developments says he has jumped at the opportunity to employ a highly skilled immigrant. He describes the new scheme as a win-win situation, because with unemployment so low in New Zealand, the pool of skilled labourers is very small.

Sources - Press release Tradestaff Christchurch 2 July 2004 "Shortage of builders prompts overseas search"; Newstalk ZB 13 July 2004 "EU Workers Heading for NZ" Reuters.

Until the scheme was introduced, New Zealanders usually worked in Britain and then returned to the local labour market after two years or so. But under the new scheme, professional workers can stay in Britain for four years and then may be eligible for residency in Britain.

Bernie Kelly, managing director of Global Career Link, which is networked to 130 recruitment consultancies throughout Australia, Asia-Pacific, Britain and Europe, says the latest British scheme could lead to a lost generation of skilled workers that NZ could desperately use. Kelly: "Many working in Britain are planning to stay longer. With a four-year visa and the option of staying indefinitely, they can buy homes and settle. The losers are the large and growing NZ-based companies which need these people to help them to compete in the international markets. The prospect of staying somewhere while earning £80,000 to £100,000 and living in comfort is different from struggling in a bedsit with far less money and your visa about to expire."

Kate Weaver, HR manager for law firm Phillips Fox says recruitment is always an issue because the market is smaller for law firms here. Weaver: "New Zealanders have always gone overseas — particularly lawyers because they can work in London. The new scheme may affect us later on if they don't return to us after two years, but it hasn't had any effect on our ability to recruit - yet. "

Source - New Zealand Herald 3 July 2004 "Britain snatches skilled Kiwis" by Steve Hart.

Manukau Mayor Sir Barry Curtis says this lack of basic skills is the primary reason for unemployment in his city. He says that there has been a woeful lack of planning and training to meet future skills needs and the Manukau City Council is now undertaking research to predict the future skills requirements of the workforce in order to better match up skills with job vacancies and employer needs. Curtis: "There's a severe mismatch at the moment. We don't need hundreds of young people training in trendy things like the media and TV presenting, when there are few jobs in this area and it's highly competitive. On the other hand we don't have nearly enough people in practical areas as nursing, engineering, building and biotechnology, or even plumbing."

Curtis believes that many planning mistakes have contributed to the skill shortage situation. He says that rundown of the apprenticeship system in the 1980s was a mistake the city is now suffering from ... and, to help remedy this, educational institutions must be more focused on practical courses. Curtis is also encouraging more businesses to take on cadets or give people the chance to get work experience on the job ... and the Manukau City Council is itself showing leadership on both these initiatives. Curtis: "I would like to see the cadetship idea spread throughout the city. But individuals and families also have a responsibility to realize the importance of staying in school and being committed to gaining qualifications".

Source - Media release Manukau City Council 7 July 2004 "Action needed over worrying skills shortages."

The $1.97b in extra education spending over four years will create an estimated 4,692 teaching jobs in primary and secondary schools. In all other sectors an estimated 1,800 jobs will be created from about $3b in extra spending, according to the Treasury.

Of the expected 1793 permanent new government jobs outside health and education, both fulltime and part-time, about 440 more will be in Wellington and 60 in Christchurch. Justice is a big jobs winner, with an extra 580 jobs expected. Child, Youth and Family is expected to get 150 more workers.

The number of policy analysts has also grown significantly since Labour came to power, up from 1,776 four years ago to 2,325 last year. The Minister of State Services Trevor Mallard said an extra 550 policy analysts were consistent with the government's decision to "rebuild capability" rather than rely on expensive consultants, which was the policy of the previous National government.

Source - Dominion Post 6 July 2004 "Budget to fund 6,500 extra state sector jobs", by James Weir.

The new "points" threshold has dropped from 150 to 140 ... and is the 10th change since the new system took effect in December. Under the new system, immigration selections are made every fortnight. The pass mark has dropped steadily as it became apparent that NZ was not being over-run with applicants. The skilled migrant category has slumped to just 517 approvals since December, but Minister of Immigration Paul Swain is confident targets will be back on track within a year.

Source - New Zealand Herald 8 July 2004 "Entry rules eased for migrants" by Audrey Young.

The number of offenders on unemployment benefits while serving part of their sentence from home has more than doubled in the past two years. An estimated $10 million of taxpayers money is used every year to cover the costs of monitoring the prisoners at home and funding the weekly payments.

Swain and the Associate Minister of Employment Rick Barker have been discussing a scheme between Corrections and Winz to start targeting those people from early September. Swain: "The technology is good enough now to monitor people when they are at work and my preference would be for someone to be getting up, going to work, earning an income and paying tax rather than sitting at home and receiving a benefit. "

Source - Sunday Star-Times 4 July 2004 "Stay-at-home offenders may have to work for dole" by Matthew Lowe.

When the North American Free Trade Agreement (Nafta) went into effect a decade ago, there were dire predictions of American jobs being lost - to Mexico especially. Sowell says that in reality, the number of jobs in the US increased by millions after Nafta went into effect and the US unemployment rate fell to low levels not seen in years.

The French regulations require employers to set a maximum working time of 35 hours, in exchange for flexible rostering hours, lower social security charges and a union commitment to restrain wage demands. As few French businesses work a seven-hour, five-day week ... people now work eight- or nine-hour days in a four-day week. This has revolutionised leisure patterns, especially for families. The bed-and-breakfast industry has boomed as families go away for long weekends.

French PM Jean-Pierre Raffarin

Source - New Zealand Herald 6 July 2004 "Short week in Europe faces short shrift as economies suffer" by Herald correspondent Catherine Field, Paris.