No.249 31 March 2006 Essential Information on an Essential Issue

of key events over the last few weeks.












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5 March 2006

In Australia, 27 companies face a writ which claims they are paying sewing machinist outworkers as little as A$3 an hour, in breach of minimum pay legislation.

The shortage of nurses in wealthy countries is leading to a health-care system collapse in the Philippines, where over 100,000 nurses — and doctors taking jobs as nurses — have left the country for higher wages overseas.

6 March 2006

The Child, Youth and Family Service is to be merged into the Ministry of Social Development.

7 March 2006

NZ students struggle to pay the cost of living under the current youth wage, let alone the cost of their education, according to the Association of Staff in Tertiary Education.

NZers thinking about moving to Australia should think again, according to PM Helen Clark. Clark says Australia has higher taxes, higher property prices, higher unemployment.

Canada will not be able to benefit from a boom in the mining industry if something is not done to face the growing labour shortage in the sector, according to the British Columbian Mining Association. President Michael McPhie. The industry is working with the government to try to provide solutions that include increased funding to universities, bulking up trade schools, hiring more women and hiring more immigrants.

Canadian province British Columbia is creating a strategy to attract immigrants to deal with its skill shortages. It plans to streamline the immigration process for skilled migrants hiring " job coaches" to guide immigrants into a job.

In the UK, new immigration rules will see highly skilled immigrants able to gain residency in the UK after working only two years on a working visa. Low-skilled workers will be restricted unless a skills shortage is identified in particular sectors.

8 March 2006

An extra 31,000 trades training places are to be offered throughout Queensland as part of a $1 billion plan by the Federal Government to tackle skills shortages. Brisbane-based Trade and Technical skills Institute will take control of the development of training in building and construction, automotive, electrical, manufacturing and engineering trades.

9 March 2006

The Economic Development unit for South Canterbury hopes to attract at least 25 British immigrants and their families to South Canterbury when representatives attend NZ Immigration Expos in Manchester and London later this year.

10 March 2006

Youth rates are voluntarily scrapped at 90 BP-owned service stations around NZ, ahead of any pending legislative change in parliament.

Britain's armed forces face "serious manning shortfalls" in 80 key operational areas. A report by the Armed Forces Pay Review Body reveals that some army units are already so overstretched that they "routinely breach" guidelines on the amount of tour duty considered healthy.

11 March 2006

Hospital care and aged-care workers launch a campaign to seek better pay, claiming their members are living on the poverty line.

Australia's Prime Minister John Howard says the government is considering cutting welfare payments to Aboriginal parents whose children skip school.

12 March 2006

A third of NZ and Australian businesses expect to spend more on information technology this year than last year according to a survey by research firm Forrester.

Qantas says it will forgo up to $A30 million in annual profits as it elects to keep wide-body jet maintenance operations in Australia. Chief executive Geoff Dixon: "It's a compromise, but then you have a brand issue here and a responsibility to the community. We also have a huge workforce with major skills, and our view would be to keep those skills here."

The skills most lacking in new employees in the US are professionalism, the ability to analyse, business knowledge and written and verbal communication are, according to the 2006 Access to Human Capital and Employment Verification Survey which also found that many organizations are recruiting skilled workers from overseas to fill these skills gaps. The report can be found here.

13 March 2006

59 jobs will be lost at Fonterra's Claneboye factory in South Canterbury as the company prepares to move some processing work to other locations.

14 March 2006

The NZ$ slumps to a 20 month low of US63c.

In a bid to attract skilled migrants, the NZ government exempts immigrants from paying NZ tax on most of their foreign income for four years. Returning expatriates need to have been living out of NZ for 10 years to qualify for the tax exemption.

Only two of the top 20 universities in the world are situated in Europe, according to a survey by the OECD. Researcher Andreas Schleicher says there is no way that Europe can stop developing countries from producing "wave after wave of highly skilled graduates". Schleicher warns EU members to increase spending on schools and universities and tackle a crippling lack of social mobility within their societies or put future economic growth in jeopardy.

15 March 2006

Top-end professional work in Australia is increasingly being handled overseas. A report by the Prime Minister's Science, Engineering and Innovation Council is evaluating threats to Australia from the emerging knowledge-based economies of China and India.

Two US senators urge President George Bush to move forward with a free trade agreement with NZ. Republicans John McCain and John Sununu say the agreement would strengthen ties between the two countries.

16 March 2006

District Health Boards are criticised for wasteful overseas recruitment spending after 10 boards flew up to five staff members each to attend a London jobs expo. National MP Tony Ryall says the health boards are wasting money set aside for overseas recruitment by competing against each other instead of presenting a united front.

A group of Indonesian fishermen who jumped ship in Dunedin gain an agreement to get back pay from their employers. A Maritime Union spokesperson said the fishermen not only jumped ship because of poor working conditions, some of them were also made to pay a bond of thousands of dollars to get the job in the first place.

UK jobless claims rose more than expected in February after the economy slowed in 2005.

19 March 2006

More than 11,500 NZers are unable to work and are claiming benefits because of stress or drug and alcohol abuse. While unemployment is at a low of 3.6% the number of sickness and invalid beneficiaries continued to grow at a rate of 2.7% last year and totalled 121,362 at the end of the year.

NZ is the worst performing country in the OECD for productivity growth according to business historian Arnold Kransdorff. He says the fluid NZ labour market effectively drains organisations of knowledge. Kransdorff: "It is like reinventing the wheel, because the organisation can not learn from its own experiences."

Around 9% of GPs intend to leave their general practice, go overseas within 5 years or leave medicine altogether, according to a survey by the Royal NZ College of General Practitioners. It warns the declining number of GPs leads to more hours of work for those staying in practice — making it harder to retain those still in practice and making it more difficult to recruit.

20 March 2006

About 1,000 secondary school students stage a protest rally in Auckland, organised by a group called Radical Youth in support of abolition of youth rates Bill.

A slowdown in the number of foreign students attending Australian universities is placing many universities in financial trouble, according to the Australian Department of Education. Six universities rely on overseas student fees for more than 20% of their total income.

21 March 2006

The jobs of 1,600 Air NZ airport services staff may be under threat after the airline wrote to six suppliers requesting information to benchmark their operations against their own.

Falling enrolments are hitting all three Waikato tertiary institutes. Wintec, Waikato University and the School of Maori and Pacific Development all face serious enrolment problems.

Britain raises its minimum wage by 6%.

22 March 2006

Truancy services in NZ will be cut from 120 to 14 under a reform the Ministry of Education says will ensure consistency between services. South Taranaki truancy officer Stephen Dyer argues that the "good work and regard" achieved by workers in smaller areas will be lost.

French Prime Minister Dominique de Villepin, embattled over his First Job Contract law, says withdrawal of the legislation is impossible but hints that the government could be flexible in "those sectors where it would be most relevant".

23 March 2006

An initiative to help people who are on Sickness and Invalid Benefit into work is extended to Taranaki. PATHS (Providing Access To Health Solutions) is aimed at fast-tracking health services to beneficiaries who have health problems preventing them from working.

Dutch women who choose not to work should pay back the cost of their education, according to an opposition politician. Sharon Dijksma: "You enjoy an expensive education, paid for by society, and you cannot throw away this knowledge without a penalty".

24 March 2006

The Ministry of Immigration extends the period for seasonal horticultural and viticulture work visas. Visas had been offered from December to July but are now being offered through to September.

One-third of students from decile one schools leave with no qualification. Decile one schools are those rated as having the lowest socioeconomic background.

The NZ economy shrank by 0.1% in the last quarter of 2005.

The NZ dollar, which was trading at nearly US70c a few months ago, is trading at just over US60c.

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  • About 85,000 middle-income families have become eligible for Family Assistance for the first time. From 1 April, the income thresholds for families to qualify for tax credits are being lifted — and the rates at which Family Assistance payments reduce due to higher incomes have also changed so that more middle-income families with families will qualify for more money. Families earning $45,000 per year with two dependent children are eligible for $138.50 per week, up from $23 per week. And families earning $90,000 or even higher will now be eligible for some assistance, depending on how many children they have.

    The changes are part of the $1.6 billion Working for Families package. The government is sending out 535,000 brochures to households explaining the changes and Minister of Social Development and Employment David Benson-Pope encourages people to read the brochure to see if they qualify for new payments.

  • The Working for Families package is an important recognition of the need to invest in future generations, according to the Child Poverty Action Group (CPAG) spokesperson Susan St John. It is an acknowledgement that it is a real struggle to provide children with adequate food, clothing, shelter, transport, and school fees on a low income and the redistribution under the Working for Families package is well overdue.

    But St John says that because the changes are targeted only at people in work, 230,000 children in the poorest families in New Zealand will receive nothing. St John: "Child poverty can only deepen for those in families left out. Children's needs do not change because their parents do not work. The all-or-nothing In Work Payment will create a double jeopardy. When incomes fall as a result of job losses or reduced work hours, the child-based In Work Payment will also disappear".

    CPAG researcher Donna Wynd also questions the very logic behind the In Work Payment. "If this payment is needed as a work incentive, then why are people without children left out? If this payment is about rewarding work then why is it based on how many children people have? The In Work Payment is complex, discriminatory and unfair."

    Source — Media release NZ govt by David Benson-Pope, 10 March 2006, "Important information for families"; media release by CPAG, 28 March 2006, "Families will get much needed boost — but child poverty set to deep"; media release Dr Susan St John, 30 March 2006, "Child poverty worsens amongst the poorest".


  • Welfare benefits, student allowances and the income thresholds for the Community Services Card (subsidised healthcare scheme for people on low-incomes) have also risen. David Benson-Pope says the increase of 3.16% equates to the increase in the cost of living for 2005. He says that changes to all threshold levels will ensure no one will lose entitlements because of increases to their benefit.

  • Green MP Sue Bradford is disappointed that Benson-Pope's "good news" for beneficiaries didn't cover the fact that the Special Benefit is being scrapped. In its place will be Temporary Additional Support (TAS) which has much more restrictive criteria. Bradford says that under TAS, no matter how severe the hardship, no lump sum payments will be allowed and that a "severe limit" on paying expenses will be imposed. Bradford points out that the system will be much less flexible and restricts case managers' ability to take account of individual circumstances. In most cases the beneficiary must meet the first $20 of hardship and the payment will usually be limited to a maximum weekly payment of no more than 30% of the main benefit they receives.
    Source — Media release NZ government by David Benson-Pope, 12 March 2006, "Minister has more good news for 1 April"; media release Green Party by Sue Bradford, 16 march 2006, "Minister hides benefit cut in `good news' smokescreen".

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  • Special Feature: Minister of Social Development and Employment David Benson-Pope has been in the news lately, but more about his previous history as a high school teacher than what he is doing as a Minister. In this issue of The Jobs Letter, we interview Benson-Pope about his vision for the Ministry of Social Development and his agenda for the next three years.


  • mappwayne.jpg - 4809 Bytes The 90-Day Probationary Employment Bill has been sent to Select Committee after passing its first reading in parliament with a 63-58 majority. Sponsor of the Bill, National Party MP Wayne Mapp, says the legislation would help young people — and people who have had extended periods out of the workforce — to get jobs.

    Mapp acknowledges that two of the parties that supported the Bill — NZ First and the Maori Party — raised concerns about casual workers and discrimination. But Mapp points out that the Bill protects the right to holidays, doesn't compromise sick leave provisions and provides protection against serious discrimination. He says such issues will be fully canvassed at the committee stage and amendments could be added to address any concerns.

  • oreillyphil72.jpg - 3928 Bytes Business NZ argues that the Probationary Employment Bill will help more people find jobs. Chief executive Phil O'Reilly says employers can be understandably reluctant to employ people without a positive employment record and the proposed legislation would help overcome the risks of doing so. He says it would benefit teenagers, new migrants whose skills are often not well utilised, and other groups whose unemployment rates exceed the average. O'Reilly says many small businesses are shy of hiring untried workers because they have previously faced unjustified dismissal claims after terminating a new employee. O'Reilly: "Often this is where someone has been hired in good faith, but where the employment relationship didn't work out, where motivation, behaviour or work habits were not appropriate, or where work output was below expectations. This is something that is hard to predict in advance."

  • The Maori Party has supported the Bill to the committee stage saying it wants the debate about the "right to work" to continue. In an address to parliament, co-leader Pita Sharples said that debate must lead to increased Maori access to employment. Sharples: "We want to widen the options available so that our people have the chance to get their foot in the door, to achieve the fullest possible range of employment opportunities. This House hasn't noticed the door is still slammed shut for far too many Maori. Long-term unemployment for Maori is particularly rife — roughly 27% of all unemployed Maori are experiencing long-term unemployment. I come to this House today, desperately aware of the need of people to be able to walk in the door to a job. However, we are also committed to protecting workers' rights — so that workers' rights are not impinged on, workers are not abused and do not suffer from exploitation. What takes precedence: the right to work or the workers' rights? What we want is to allow people to have a say, to hear the views of others, and open the doors for wider discussion."

  • clairsharon_sm.jpg - 4906 Bytes The Council of Trade Unions says Maori shouldn't feel the need to grapple with a perceived hierarchy of a "right to work" versus "workers rights". Vice president Sharon Clair says these things are not incompatible, but the Bill attacks them both. Clair agrees that Maori unemployment is too high but instead advocates for an investment approach that validates Maori potential. She says the key issues in the labour market are how to get workers with skills, not how to sack them. Clair points out that Maori unemployment has dropped significantly in recent years without a law that allows employers to sack workers with no appeal rights.

  • bradford905.jpg - 28514 Bytes The Green Party says the Probationary Employment Bill is an attack on the young, the less skilled, the under-educated and the unemployed. MP Sue Bradford calls the Bill "mean-spirited" and "anti-worker". Bradford: "What Dr Mapp and some other political parties supporting this Bill fail to recognise is that it is already possible to have probation periods for new employees under the existing Employment Relations Act. Where a probationary period has been negotiated, it can be taken into account when looking at whether a dismissal is justified or not. What this Bill is really about is stripping protections from the most vulnerable workers, those who tend to be less unionised and to have less ability to negotiate their conditions when they start a new job. If Dr Mapp's Bill goes through, employees will be sacked at will during the first three months on the job. Even worse, once sacked, they become liable for a stand down of up to 13 weeks from Work & Income once they register back in the benefit system. People will be scared to start jobs and scared to change them."
    Source — The Mapp Report, 17 March 2006, "90-day probation bill passes first reading "; media release Business NZ, 15 March 2006, "Probationary period would help more into jobs"; Maori Party MP Pita Sharples speech to parliament on the Employment Relations (Probationary Employment) Amendment Bill, March 15 2006; media release NZ Council of Trade Unions, 16 March 2006, "`Right to Work' and `Workers Rights' Not Incompatible"; media release Green Party by Sue Bradford, 15 March 2006, "Nat's bill is attack on the vulnerable".


  • french_unrest.jpg - 20934 Bytes Meanwhile in France, in an attempt to alleviate youth unemployment, the French government has passed legislation that makes it easier for employers to fire young workers. The measure creates a First Job Contract (CPE) which provides a two-year probationary period for workers under 26 years old. This gives employers the right to dismiss young workers during their first two years on the job without expensive legal and financial implications. The intention is that employers will be spurred into hiring young people, safe in the knowledge that they are not legally obliged to retain them indefinitely.

    But these measures are proving to be exceedingly unpopular among those it is meant to benefit. France has again been besieged by demonstrations with police estimating at least a half a million people have taken to the streets in protest against the CPE. And half of the country's 88 universities have been closed as students occupied buildings and disrupted normal operations.

    For more than ten years, France's unemployment rate has hovered at around 10% — one of the highest in Western Europe. But the level of unemployment for people under 25 years old has persisted above 20%, and is much higher than that among some ethnic groups. This is largely seen as the cause of the riots that erupted across France late last year. The lack of opportunities has left many young people desperate and frustrated about their future and created a huge brain drain as young French people, many of they well qualified, leave their country in search of opportunities elsewhere.

    Source — Guardian Weekly, 17-23 March 2006, "French Students revi8ve the spirit of 68" by Angelique Chrisafis; Fairfax, 19 March 2005, "Massive protests across France" by Reuters; New Zealand Herald, 20 March 2006, "Echoes of past in eruption of protest" by Catherine Field with additional reporting AFP.


  • The current level of skill shortages in New Zealand has been unknown for over 30 years and is likely to intensify, according to the Employers and Manufacturers Association. EMA Central chief Paul Winter has warned Gisborne employers that the skills shortage will remain severe, especially outside the large urban centres.

    Winter says the pool of people that employers in provincial centres had always been able to count on is simply no longer there and is not likely to reappear anytime soon. The biggest competitor these businesses face is urban drift. Headhunting for skilled young people from companies in larger centres — and from overseas — was becoming a growing reality, especially for places like Gisborne. Local employers can't rely on lifestyle factors to attract these people because the reality is that young graduates prefer the opportunities offered in urban centres.

    Winter says employers need to accept and adapt to the fact their workforce is ageing — and they must invest more in the people they already have. They can do this by enhancing the workplace environment and further developing their workers' skills. Winter says it is wrong for employers to think that if they invest in their staff, they might move on. The reality is that staff who are encouraged to extend themselves and become more responsible in their jobs get more satisfaction and are more likely to stay. Winter: "If you give people the room to develop and grow in the job, and they are the sort of people who like the lifestyle here, you will retain them."

    Source — Gisborne Herald, 9 March 2006, "Employers told skills shortage here to stay" by Marianne Gillingham.


  • Job ad numbers are declining. In January there were 5% fewer advertised job vacancies than there were in January 2005. The Department of Labour still describes the labour market as tight but predicts skill shortages will continue to ease slightly over 2006. As economic growth slows, so will the number of new jobs being created.

    Sales assistants, general clerks and information clerks and receptionists are the most highly advertised jobs.

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    Job Vacancy Monitor - January 2006, by the Department of Labour can be downloaded (14pg 212Kb) from here.

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    Skills in the Labour Market - March 2006, by the Department of Labour can be downloaded (6pg 157Kb) from here.


  • Just because people are granted permanent residency in New Zealand doesn't necessarily mean they stay. A study by the Department of Labour challenges the notion that people granted residency remained in New Zealand permanently. People on the Move found that nearly 20% of people who migrated to New Zealand in 1998 had since left. The study found that over time, the incidence of permanent residents leaving increased.

    The study reveals many reasons why migrants leave after taking up New Zealand residency. One is that is a reflection of unsuccessful settlement, such as migrants not being able to find work or work they want to do. Others reasons are that they miss their home countries or their family who didn't come with them. Still others have on-going business commitments overseas. The study also points out that some migrants never have the intention of staying permanently, anyway. But the study also says many of the migrants who stay in New Zealand, even for a shorter amount of time, still make a valuable contribution while they are here.

    Source — New Zealand Herald, 22 March 2006, "Immigration looking up, latest numbers suggest" by Brian Fallow; Dominion Post, 22 March 2006, "NZ keeps losing its migrants" by Rebecca Palmer.

    peopleonthemove.jpg - 6492 Bytes

    People on the Move:
    A study of migrant movement patterns to and from New Zealand,
    March 2006,
    by Philippa Shorland, research analyst for the Department of Labour,
    ISBN 0-478-28035-1,

    can be downloaded (103pg, 529Kb) from here.


  • rnfb.gif - 3601 Bytes The government's intention to move towards a single benefit has alarmed those in the blind community who have jobs. Currently, about 1,320 people receive a Blindness Benefit on top of the wages they receive from their job. They fear that if the simplification of the benefit system continues, the Blind Benefit will disappear — putting working blind people in the same abatement regime as all other beneficiaries.

    The Royal NZ Foundation for the Blind believes this would be unfair, and has released research that supports the assertion that blind people who are in jobs have significant costs that other people don't have. The Cost of Blindness in New Zealand points out that key cost areas are related to carrying out domestic tasks, day to day travel, shopping, recreation and use of specialised equipment.

    The research estimates the living expenses of the country's 11,500 blind people costs them and their families $61 million more per year than it costs the non-blind population. Foundation chief Paula Daye points out the research can't be used to derive a meaningful average of cost per individual, but the research is the best ever done in New Zealand on the cost of blindness and should be useful for the government when considering any benefit changes. Daye: "Everyone involved in the blindness community knows that being blind or vision-impaired is expensive for individuals, families and society — in actual costs, time costs and opportunity costs."

    Foundation chairperson Don McKenzie says that if you are blind and employed, your costs go up, not down, because of adaptive technology equipment, transportation, and the like. McKenzie: "If the goal is to get more blind and vision-impaired people into employment, the Blindness Benefit must remain as it is. You don't want to penalise blind people for succeeding."

    costofblindness.jpg - 8369 Bytes

    The Cost of Blindness in New Zealand,
    public release March 2006,
    published by the Royal NZ Foundation for the Blind,

    can be downloaded (170pg, 1.2Mb) from here.

    Source — New Zealand Herald, 21 March 2006, "Blind have to fork out extra $61 a year".


  • The number of people using the PACE (Pathways to Arts and Cultural Employment) scheme — and those leaving the scheme to go into work in the arts — has halved since 2004. Ministry of Social Development national operations manager Liz Jones says the fall in the number of people on the scheme, and those going into art as a business or job, reflects a similar fall in the number of people on the unemployment benefit. When the scheme was introduced in 2001 there were over 100,000 people on the dole and now there are about 47,000. Jones: "Those numbers have halved so what we're seeing is a mirroring of numbers on PACE. The stats tell just one part of the story. There are hugely diverse opportunities in the arts sector and because they're non-traditional it takes real commitment and talent. Sometimes people choose other options."

    In 2004, there were 1,960 people on PACE. In 2005, there were 1,182. This year, 901 people are registered on the programme.

    Source — The Press, 10 March 2006, "MP queries fall in artists leaving dole" by Beck Eleven.


  • Australia continues to lure New Zealanders with more opportunities and better pay. About 600 New Zealanders are leaving for Australia each week.

    The New Zealanders moving to Australia are not just professionals or young university graduates looking to pay-off their student loans. Many have few, if any, qualifications and are struggling to make ends on the low-incomes they earn in NZ. They are drawn to Australia because they have family or friends who earn twice what they can in New Zealand doing low- or unskilled work. On average, real Australian incomes (adjusting for prices and the exchange rate) are 32% higher than NZ incomes.

    Others who leave for Australia do so because they find their skills are more welcomed there. Many highly experienced New Zealanders in their 50s who have been made redundant find that New Zealand employers are no longer interested in them. Australian employers appear to be much more accepting of older workers and appreciative of the contribution experienced people make.

    Still others are people who have migrated to New Zealand but can't find suitable work even though this country is suffering from serious skill shortages. The chairperson of the Migrant Support Services centre in Onehunga Shankar Nair points out it is no surprise New Zealand immigrants are turning to Australia, given the number of well-qualified migrants working at Auckland petrol stations.

  • Maori are migrating to Australia at twice rate as are Pakeha. By 2001, 13% of all Maori were permanently living in Australia, a proportion that has been steadily rising over the last 20 years. In 1986 there were 27,000 Maori living in Australia but by the 2001 Census there were 90,000. And Te Puni Kokiri — the Ministry of Maori Affairs — says at the current rate, by 2050 the proportion of Maori who will be living in Australia will be 35%.
    Source — New Zealand Herald hews series 21-22 March 2006, "To stay or go — its all down to money", Jobs luring young Maori across Ditch", "Higher wages big drawcard", "It's so much easier to make ends meet", "very different view from bottom of economic ladder", "Kiwis flocking to Oz yet again" all by Simon Collins.

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