The number of jobs added to the economy, just 1,000, was significantly lower than the nearly 12,000 increase in the working-age population. Annually, employment growth was still a strong 3.4%, or 67,000 jobs, but the growth has slowed.

Statistics New Zealand says that despite the increase in unemployment and the "flat employment result", the labour market remains historically strong. The unemployment rate of 3.9% is still the third lowest rate the Household Labour Force Survey has ever recorded, the rate of labour force participation is still high, and there are more people than ever — 2,055,000 — in the New Zealand workforce.

For the week preceding the statistics release, economic forecasters had been predicting unemployment to drop to 3.5%.

Wellington East Girl's College principal Janice Campbell says some working students at her school are saving for university, but others just want cash for fashion and entertainment. Campbell agrees that part-time work could teach important skills but she notes that her school's top pupils focus on their studies and extra-curricular school activities. She says the students who get the best results don't have part-time jobs.

The top three reasons students give for getting a job are to save for (or to run) a car, to have a social life and to save for tertiary education in hopes of avoiding having to take out a student loan.

Source — The Press, 9 May 2005, "Part-time jobs cut study hours" by Amanda Warren; don 9 May 2005, "School warning on part-time job drain".

The reduction has continued despite the government's assurance that the changes to the eligibility criteria for the student allowance, made in last year's Budget, would boost the number of students receiving allowances. But since the 2004 Budget, there have been 3,000 fewer students claiming an allowance.

And both the National Party and the Green Party have pointed out that Minister of Education Trevor Mallard knew in mid-February of the decline in this year's student allowance numbers and yet three weeks later he announced how the Ministry would be budgeting $223 million for more student allowances over the next four years, an amount it looks unlikely to spend.

Source — Association of University Staff Tertiary Update, 5 May 2005, "Student allowance figures plummet"; Media release NZ University Student Association, 4 May 2005, "Students invoice Mallard over bungled allowances"; Media release Nandor Tanczos, 4 May 2005, "Students still waiting for $223 million the govt promised"; media release Trevor Mallard, 5 may 2005, "Strong economy leads to fewer tertiary enrolments"; New Zealand Herald, 3 May 2005, "24pc fewer students on Govt allowances".

The reason the government has joined with the Chamber of Commerce in this latest jobs partnership is because it wants to shift the perception employers tend to have when they consider hiring people who are on the domestic puprposes benefit. Maharey: "A particular problem is that employers are often reluctant to hire sole parents with young children. To help address this the Chamber will promote the benefits of flexible workplace practices among its members."

This "jobs partnership" is the ninth the government has initiated, but the first that is directed at a particular group of beneficiaries rather than with a specific industry. The Ministry has jobs partnerships with the hospitality, meat, retail, transport, plumbing, rail track maintenance, road and bus industries. They are all intended to provide unemployed people with entry-level skills training.

Source — Media release, Steve Maharey, 6 May 2005, "DPB focus of new industry jobs partnership".

The tax changes are more generous for those earning $95,000 or more. This group will have $41 a week more in their pay packets this year, rising to between $57 and $86 next year.

— Welfare. Costello had promised a "welfare revolution" and the most significant changes in his Budget are tough new welfare rules. From next year, new applicants for a disability benefit who are judged to be capable of working at least 15 hours per week will be required to get a job or they will be pushed onto the dole, which pays $40 per week less. Similarly, new sole parent applicants will only be eligible to remain on that benefit for much shorter time frames before they are forced either into work or, like the disabled, onto the dole. People who fail to turn up for job interviews — or look for enough jobs each fortnight — face a faster suspension of their dole payments under a new penalty regime.

On the "carrot" side, there will be more places for out-of-school-hours childcare. And benefit abatement rates have been eased to allow people going into low-paid work to retain more of the benefit.

— Jobs. The Budget contains $2 billion over four years to boost "rehabilitation, retraining and job-search support". Included in these are pain management courses and personal support programmes to get people "job-ready quickly". There will be 68,000 places in employment programmes for people with disabilities as well as taxi fares to get beneficiaries to their job interviews or work. Wage subsidies for 7,000 people will be paid to companies for up to six months to hire older and long-term jobless people.

— Skills. More money is to be spent to attract skilled immigrants. Trade skills shortages are to be addressed by the new Australian Technical Colleges (see Jobs Letter No 220), which will begin training people in localities experiencing severe trade skill shortages. Youth allowances will be extended to new apprentices and school-based apprentices. And apprentices will get an $800 allowance to spend on a tool kit.

Australian Council of Trade Unions argues that the Budget provided no money to deal with the skills crisis now. President Sharan Burrow: "The Budget contained not one extra dollar for TAFEs. Skills are absolutely ignored. We get a tool kit when we've got a skills crisis."

Mitchell points out that in order to move more people from welfare to work there has to be enough jobs to go around and people with the skills to take them. He says the Budget is silent on how people will find work and provides no job creation initiatives. Mitchell: "We needed jobs from this Budget. Instead there are more training courses and programmes while Job Network providers get more power to punish those who fail their penurious activity tests. We needed a Budget that invested in job creation, public health and education. We got a Budget that continued to feed a Future Fund when those who are unemployed, sick and poor today need access to services and paid work."

Source — The Age, 10 May 2005, "Budget cuts for them masses" by Xavier La Canna; Sydney Morning Herald, 11 may 2005, "The money in your pocket" table; The Age, 11 May 2005, "Tinkering leaves a few carrots, plenty of stick" by Farah Farouque; The Age, May 11, 2005, Welfare set for $3.6bn overhaul; The Age, May 11, 2005, "Boost for training to avert crisis"; The Age, May 11, 2005, "Recipients can keep more of dole while working" by Misha Schubert; Media release ACOSS, 11 May 2005, "Snakes and ladders for jobless in Federal Budget". Media release Centre of Full Employment and Equity, 10 May 2005, "An unfair budget and not a jobs in sight!"

Source — New Zealand Herald, 12 May 2005, "Economy on downturn, says Cullen," NZPA

Minister of Defence Mark Burton says the government will spend $4.6 billion over the next 10 years to rectify the problems outlined in the report. The money will be primarily aimed at improving staff retention and recruitment. The Defence Force hopes the funding will help it to boost staff numbers by 1,500 — 2,000.

Source — New Zealand Herald, 3 May 2005, "Army staff victims of cash crisis" by Ruth Berry.

The working party's report indicates the situation is likely to worsen now that nurses working for district health boards have negotiated a 20% pay rise. That settlement was likely to draw both nurses and caregivers from the sector, to better paid health board jobs.

Source — NZPA, 10 MAY 2005, "Caregivers giving up, paid $9.50 an hour"

In Happiness: Lessons from a New Science, British economist Richard Layard points out that part of the reason for this is that people judge wealth relatively rather than absolutely. Layard says even if you were happy getting a pay rise, finding out a colleague got a bigger one can more than wipe out your "happiness increment". Once people have enough money to live, Layard says competition for money and status is a zero-sum game. And the more opportunities people have for comparison, through things like rankings and advertising, the greater people's dissatisfaction is.

Layard maintains that traditional economics fails to take account of the remarkably commonsensical things that happiness really depends on: loving relationships, fulfilling work, reasonable health, ties of community and friendship, personal freedom and values. All of these have a greater impact on people's happiness than their income.

Security and family-friendly policies are more important than absolute income and Layard maintains there is no overwhelming need for people to work harder to keep up materially. Targets, incentives and performance-related pay aren't the best way of running companies or revolutionising public services. His research found a fulfilling job allowing pride in the work, challenge and autonomy, is its own reward and the best workplace motivator.

— Happiness: Lessons from a New Science February 2005, published by Allen Lane, can be purchased through Amazon.com here

Source — Guardian Weekly, 29 April — 5 May 2005 "Money can't buy happiness" by Simon Caulkin