Not much good news around about the NZ economy.
Standard & Poor Chief economist David Wyss told Auckland economists yesterday that there is a one in three chance of another crash and while the “recession is over”, it’s a very fragile recovery. NZ businesses say they cut too deep in the recession last year and are struggling to rebuild because many of the skilled workers they laid off have gone elsewhere – and who can blame them? Tens of thousands got the chop with no redundancy pay and NZ wages and conditions are falling further and further behind Australia’s. Confidence is faltering and today, our government will fork out around NZ$1.6 billion in taxpayers money to 35,000 depositers in South Canterbury Finance that were covered under the extended guarantee scheme.
The best our government can come up with? Cut workers’ protection against unfair dismissal, restrict their access to union advice, cut their meals and rest breaks and put their holidays up for grabs.
You don’t have to go far to find some pretty grumpy voters. And they’re set to get a lot grumpier come the 1st October when GST goes up and most find that their tax cut has already been eaten up.
This clip from Jim Stanford (aka Lieutenant Stanfordo), who wrote “Economics for Everyone” has parallels, and also some warnings. Paula Bennett’s Welfare Working Group has been promoting unemployment insurance, but look what happens to the workers who are laid off in this video. Compulsory savings is an attractive idea, but without government guarantees, workers can end up getting nothing. I hope someone makes a NZ version.
@Darien: thanks for the considered response. I actually do agree that Labour did a good thing extending leave to four weeks. At the time, I was a manager at fairly large software company, and we had already given all our staff 4 weeks annual leave a few years prior. So I think it’s a good thing.
Some of my staff had families and kids and whatnot, and they generally used their leave. But other staff were younger, less entangled in family, and saving for their first house. They didn’t want to take all of their leave, so they effectively sold it by accumulating it over the years until they left the company. Of course, the North Shore Aero Club case provides clear legal precedent that employers may not limit accumulated leave, which is good. Employers can force employees to take leave, but I didn’t do this (although I strongly encouraged people to book leave from time to time!).
This situation doesn’t strike me as ideal — people are cashing in some of their leave right now, but it takes years and a change of job. If some of my staff had asked to cash out some of their leave right away (and the mechanism was available) I would have been only too happy to oblige.
So, a) I feel the mechanism is genuinely useful to some people — we’re not all in the same stage of life.
b) I feel the mechanism is very unlikely to be abused. There’s little financial incentive to encourage employers to do this.
c) The 2% pay increase argument doesn’t fly with me at all. Whatever pay increase someone gets during a year, it’s not a trivial matter just to push that up by another 2%.
I don’t have an issue with government specifying a solid set a minimum employment conditions. But it really needs to be done in a way that allows employees the most flexibility to arrange their own affairs in the way they want. I don’t think the option to sell your forth week is the most important policy to debate, but I do recoil from the opposition to the idea. It seems very controlling. You will have a holiday. You will have a holiday and you will enjoy it!
There were reports people were borrowing, large amounts, $1,000,000 for example from the bank at 6% and investing in SCF at 8.5%, earning a risk $25,000 for the year…
@Chris 73
Jeremy
The extended guarantee only coveres amounts up to $250000 so it would be very unlikley anyone would take such a risk for a 2.5% margin, aside from the fact it would be very difficult to borrow this amount for such a purpose.
but hey it makes a great story for those who believe in such trash
Darien
You would know of course having done your homework , that the extended guarantee scheme has yet to come in.
The scheme that SCF investors are being paid under is that bought in by your Labour Finance minister michael Cullen.
Sounds good. Now if this is the case explain why Torchlight is first in line to get $100M in priority payments.
Loota
Firstly the extended guarantee dosent start till October.
Torchlight are getting paid so they dont have a right to appoint their own receivers thereby giving the Government some control over the disposal of SCF assets.
A sensible decision I would have thought wouldnt you
@Chris73 – you won’t get a choice under the legislation if your employer says no. The only thing it does is allow you to ask to cash up the fourth weeks leave – and tug the forelock while you are at it.
Mark Em so the payback limit isn’t $250,000 yeah?
Hayden
“so they effectively sold it by accumulating it over the years until they left the company” Which isnt quite like selling it, if you sell it here you dont get it later, you’re talking about postponing a benefit arent you?
Mark M, if you are right, no one in SCF invested more than $250K, which must be the case because every investor is getting their money back?
“so they effectively sold it by accumulating it over the years until they left the company” Which isnt quite like selling it, if you sell it here you dont get it later, you’re talking about postponing a benefit arent you?
Nope, I mean selling it. When you leave a job, you get your accumulated leave paid out as cash. It’s the law.
Re the $250k limit: my understanding is that doesn’t apply on the original (Labour) guarantee, but the limit does apply under the extended (National) guarantee, which is not yet in force.
@Darien
“@Chris73 – you won’t get a choice under the legislation if your employer says no. The only thing it does is allow you to ask to cash up the fourth weeks leave – and tug the forelock while you are at it.”
As I’ve said before if the employe says no then I get 4 weeks leave anyway = win-win
I like the emotive, dickens-type language of tugging the forelock but why not go the whole hog and suggest the boss will thrash you for asking and then release the hounds to chase you off the estate
So once again I have to assume that the only reason you oppose it is because its come from the right
You know the only reason I come on to these blogs is the hope that someone from Labour might actually sway my position yet you don’t want to (or can’t) answer quite a simple question
Is this the only post about the Welfare Working Group, or are there others tucked away somewhere that I can’t find? Haven’t any Labour MPs wanted to have a swipe at Bennett and Rebstock, or even applaud the alternative group for making a stand? If there isn’t anything tucked away is this a sign that Labour supports what the tories are up to? Thought Labour would’ve been getting stuck into Bennett and co over all of this.
I am in full agreement with the report made by Donna Wynd and Susan St
John, entitled “Enlightening the Welfare Working Group” (Dominion Post, 30 March). http://www.stuff.co.nz/dominion-post/opinion/4825017/Enlightening-the-Welfare-Working-Group
Ms Wynd and Ms St John have have made it abundantly clear why the
Working Group’s final report is unrealistic, unfair, and makes zero
attempt at addressing the core issues surrounding welfare in this
country.
The plain facts are;
* Almost every nation has suffered from the global recession which
began in late 2008, and which resulted in millions losing their jobs
worldwide, as consumer confidence waned; spending dropped; companies
made staff redundant; and many other firms went bankrupt.
* The subsequent rise in unemployment, from 3.9% to 7% was a direct
result of mis-management by corporate elites, half a world away. I
doubt if 160,000 New Zealanders suddenly woke up one morning and
decided to chuck in their jobs for the princely sum of $195 a week,
nett.
* There is no point in bashing the beneficiaries. For all their
expensive education, the members of the Working Group seemingly fail
to recognise that the rise in welfare beneficiaries is a SYMPTOM of an
economy in deep trouble – not a cause.
* And attacking solo-mothers (but seemingly never solo-fathers) is an
insidious, subtle, form of misogyny. It is deeply ironic that
solo-mothers are the ones who take personal responsibility for raising
children – long after the fathers have skipped town or the country -
and yet are the ones demonised for fulfilling that role. Ensuring that
solo-parents are adequately supported seems a reasonable investment in
ensuring that the next generation is well-nurtured and their needs are
met.
* And lastly; Where are the jobs???