Red Alert

Archive for the ‘business’ Category

Hands-off Government let export education drift

Posted by Raymond Huo on March 19th, 2013

Lincoln Tan of the New Zealand Herald reports http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10872104:

A Ministry of Education report to be released this week is expected to show a 6 per cent drop in overall fee-paying student enrolment. The annual Migration Trends and Outlook, released last Friday, reported a 7 per cent drop in international student approvals to 68,980 – the lowest since 2008.

Of course it does not look good because the Government has been hands-off. It just let the sector grow when time is right or deteriorate when it is not, like the situations we are in now. No coordinated marketing, no leadership, no policy to give quality providers a boost and bad apples a boo.

The Labour list MP has a private member’s bill in the ballot that is seeking to tighten rules about small private schools having international or national titles in their business names.

The Bill has already generated some attention. For those who have not seen much of the Bill, here is the Q&A, which is self-explanatory.

Education (Naming of Private Training Establishments) Amendment Bill Q & A

1. Q: What is the purpose of this Bill?

A: This Bill will stop misleading naming of PTEs and provide a boost to the image of the Export Education industry by ensuring that private training establishments (PTEs) are profiled correctly and accurately. The Bill will be one of the measures that are designed to promote NZ education providers collectively in the international market.

Currently there is minimal (and patched-up) regulation for the naming rights of PTEs which is causing great harm to our Export Education market in Asia and around the world. Many countries (particularly in Asia) have strict guidelines which reserve international, national or regional titles to reputable education providers whose names match their international, national or regional status. Therefore PTEs which boast regional or national titles in their names are attractive to Asian students and their families. However, a number of PTEs (although it is a relatively small number) in NZ have abused their naming rights and have created a credibility issue for the NZ Export Education system with the term ‘ghetto education’ being used in China and other countries to describe the state of the educational facilities in NZ, which is detrimental and unfair to the majority of the education providers in NZ.

This Bill will ensure that PTEs are profiled accurately and correctly and that New Zealand remains a top quality international education provider.

2. Q: Who is likely to benefit from this Bill?

A: The majority of New Zealand’s PTEs. This Bill is designed to protect them.

3. Q: Who is likely to be offended by this Bill?

A: A very small number of poor providers in the export education sector who are providing poor outcomes for students, flaunting the rules and damaging NZ’s overall reputation. The “ghetto education” – as so termed in overseas media – referred specifically to them.

4. Q: Will the Bill impose more regulation?

A: No. This Bill seeks to help manage performance rather than impose more regulation.

5. Q: Why this is a scaled-down version?

A: The original Bill was drafted over a year ago and we have since undertaken consultation with the export education sector. We listened to them and have taken their advice. Generally speaking, under the current economic environment, the New Zealand export education sector needs help to compete with the UK, US, Canada and Australia who are seen as top quality international education providers.

The Bill in the current form deals with only one issue, which is the naming rights of PTEs.

The accurate and correct profiling of PTE’s will help promote the image and profile of NZ export education as a whole.

6. Q: Why does the Bill not cover border control in respect of the exemption for offshore education advisers providing advice on student visas and permits?

A: Two reasons: the loophole can easily be closed by removing the exemption by an Order in Council – this is the Government’s call and we urge the Government to seriously consider this.

Secondly, evidence shows that these issues were caused by a small number of poor providers. One of the reasons why these poor providers existed in the first place is that under the current legal regime they were allowed to profile themselves in an inaccurate (or passing off) manner and attract more international students to them than other providers who pay more attention to quality and sustainability of their establishment. Many of these poor providers are also aided by a “larger than usual” amount of commission paid to agents.

7. Q: Will this Bill impose any fiscal burden to the government?

A: No. This Bill will not cost a lot, if at all, to implement. With reliably profiled PTEs, we will attract more top-quality students to study in New Zealand. The flow-on effect will be felt throughout the country. So this Bill is good for NZ’s economy.

8. Q: Will this bill help prevent New Zealand from attracting the ‘bad’ students who tend to fall into trouble in NZ?

A: Yes. This bill will improve the level of export education in New Zealand which will have an instant flow on effect and lift the quality of international students attracted to study in New Zealand.

9. Q: What motivates you to write this Bill?

A: As Labour’s spokesperson for Export Education, my dream is to see New Zealand become a world leader in top-quality export education. As many international students do stay and become our residents after graduation it also goes deeper than just export education.

Because some of these students are our future New Zealanders – we must get it right from scratch and attract the best quality students to New Zealand.

10. Q: Isn’t it the case that no matter how good the Bill is it may not be drawn from the ballot and even if it does, it will likely be voted down?

A: True, but the Government will be forced to address the issue with more urgency.

Filed under: asian, business, economy, education, ethnic, Immigration, members' bills

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Be Careful Who You Quote

Posted by Sue Moroney on October 25th, 2012

In a desperate bid to find a reason to oppose my bill to extend paid parental leave to 6 months, Business NZ rolled up to the select committee citing the opinion of Member of the European Parliament as evidence that employers in NZ might stop employing women of “child-bearing” age.

“Absurd legislation such as this closes the door on opportunities for young women and consigns them to a role as second class citizens, trapped at home by stupid legislators,” said the un-named MEP in Business NZs submission.

A quick google search revealed him to be Godfrey Bloom from the UK Independence Party.

Turns out, Godfrey has a lot to say about women.

“No self-respecting small businessman with a brain in the right place would ever employ a lady of child-bearing age.” For example. Closely followed by:

“I just dont think (women) clean behind the fridge enough” and “I am here to represent Yorkshire women who always have dinner on the table when you get home.”

And Godfrey also has something to say about NZ. Wikipedia reports that he was filmed in 2009, congratulating the French for bombing the Rainbow Warrior.

My advise to Business NZ is simple. Don’t make assertions that denigrate both women and NZ employers and use an MEP of questionable repute to justify your position.

Its a very bad look and the issue deserves better treatment than that.

Filed under: business, children, Employers, employment, family, members' bills, Uncategorized, unpaid work, women, work life balance, workers rights

4 Comments

Employment Matters

Posted by Sua William Sio on August 20th, 2012

The average Kiwi spends a huge amount of time working. An indicative calculation of an average working week of 40 hours, for a 44 year working life, adds up to at least 91,250 hours or 22.4% of their lives working.

As politicians we spend a lot of time looking at the job market from a statistical or policy perspective. We look at the overall unemployment levels and why so many Kiwis are struggling to find work. We look at government policy and how we can grow our economy. We look at the trends of youth unemployment, the numbers of Kiwi workers moving to Australia, and the growing skills deficit.

Unfortunately, we often don’t get the time to highlight the real stuff that is happening day-in, day-out for Kiwis in the workplace. As Labour’s Employment spokesperson I’m going to start posting on a weekly basis about the problems, successes, aspirations and obstacles Kiwis are facing in real-time. I am keen on your feedback and your stories. I think your personal experiences of the challenges and struggles in finding employment, or gaining the skills that will enable you to get a job will be very useful in looking at new ideas for the future.

As an initial focus this week, I thought I would highlight a familiar event in my neighbourhood. Entries for the Westpac Auckland South Business Awards 2012 closed last week. I’m hopeful there were plenty of entries. In all the years I’ve attended these awards, the winners have always praised the dedication and effort of their staff for the achievements and successes they received. There have been many examples from these awards of local manufacturers and exporters who had a clear vision for taking on the world and succeeding. Many of these employers have fought tooth and nail in a tough economic climate to retain their staff and boost their businesses in an area formerly called Manukau City.

One company I would like to point out is Fishpond – founded in 2004 by Daniel Robertson and is estimated as New Zealand’s biggest online bookstore. Daniel launched his company six months before graduating from his electrical engineering studies and his business quickly outgrew the family garage. He had 30 staff working in his first warehouse by the Airport when he won the 2009 Young Business Person of the Year Excellence in Business Award. Today Fishpond has graduated to its fourth warehouse, 3000sqm, still by the airport, selling something to an online customer every 7 seconds, adding a new customer every 51 seconds with about 80 staff.

The Fishpond – Daniel Robertson story is in my view such an inspirational story of Kiwi courage and innovation, generating export earnings, creating high valued jobs, that I think we need to be celebrating its successes widely. I think these kinds of successes are important for New Zealand’s economic future and for the Kiwi workforce. I’ve organised to have David Shearer visit Fishpond soon so that our Labour leader can meet Daniel and his team in person and just learn from their experiences. I’m keen on ideas and experiences on how we can best match the skills requirement of companies such as Fishpond with the skills training opportunities for those currently unemployed in the local workforce.

I’m sure there are many other companies in other regions, just as innovative, just as successful, generating export earnings and creating high valued jobs that we would be just as keen to learn about. Let me know if your happy for a visit. Cheers.

Filed under: business, economy, employment, jobs

8 Comments

Economic development ideas

Posted by David Cunliffe on April 29th, 2012

During the recess I have been working to fill out some ideas around economic development.

These personal views build on caucus discussions and our 2011 manifesto, and take on board feedback from party and business circles as I have been listening and engaging over the last few months.

This oped, published in the Herald on Friday, argues for lifting sustainable economic growth through a more ‘can do’, positive partnership with between government and business. It argues for a clear and credible strategy that integrates economy-wide, sector-driven and regional initiaitives. It warns of the dangers of the kind of one-off ‘deals’ with indvidual corporates now so typical of National.

This speech, delivered today to a meeting hosted by the New Lynn Women’s Branch of the NZLP, goes back to first principles. It argues that, post GFC, the “invisible hand” of neoliberal economics has failed, that New Zealand cannot cut or sell our way out of a hole, and that Labour must therefore present a clear alternative economic approach to the current government based on our own enduring values.

Hope you enjoy them.

Tags: asset sales, economy, jobs, neoliberalism, privatisation
Filed under: asset sales, business, economic, Economic Development, economy, Global financial crisis, inequality, Investment, policy, privatisation

29 Comments

National’s job claims vs reality

Posted by Sua William Sio on February 23rd, 2012

National's job claims vs reality

Even though the Household Labour Force Survey report reveals that John Key’s ‘brighter future’ promise has utterly failed to materialise in terms of jobs for a growing group of New Zealanders, it hasn’t stopped Mr Key claiming it won’t still come true. Yet we know he has no overall plan, no vision for how this will happen. Last year he made the incredible claim that Budget 2011 would create 170,000 jobs over the next 5 years. He continued to make this claim despite not being able to show anything in the Budget that would actually lead to job creation other than low interest rates and ECE funding. Simply managing the economy and ticking off boxes and hoping that market forces will deliver on the jobs is unbelievable. As expected the Govt is on track to once again fall short of its promise. The 2011 Budget documents predicted 36,000 jobs would be created in the year to March 2012. As at Dec 2011 just 10,000 jobs have been created, leaving the Govt to create a massive 26,000 jobs in the final quarter. If JohnKey keeps promising New Zealanders the world but not delivering, his credibility will be on the line, and we all know the story of the boy who cried wolf, don’t we?

Filed under: Budget, business, economy, employment, jobs, Unemployment, workforce, youth

8 Comments

What it takes

Posted by Darien Fenton on February 16th, 2012

It’s great to see the formation of a new group of businesses and the CTU working together to find resolution to the PoAL issues.

The group, which includes Mainfreight Group Managing Director Don Braid, Heart of the City, CEO Alex Swney, CTU President Helen Kelly and Michael Lorimer, Director Grant Samuel & Associates, say they believe there is a demand from a range of groups in Auckland for a

“new approach that balances the need for the Port to make a return and the Port’s role as a service to business, in Auckland, employer of Aucklanders and guardian of the beautiful Auckland space it occupies”.

They have called a meeting in early March to develop a Charter for the Port that calls on the Council to take a broader view of the Port’s future and a vision of a triple bottom line approach to the Port , which includes :

A Port that meets the needs of both those onshore (the importers and exporters of New Zealand) and offshore (the shipping companies) now and in the future;
A Port that shares its land with the public, protects its environment and sees itself as part of the development of Auckland including encouraging use of the waterfront and harbour for recreation; and
A Port that adopts a modern approach to employment relations which maintains an efficient and productive Port including retaining decent jobs and is not part of a “race to the bottom” in employment practice.”

Yes to all that.

Michael Lorimer says :

“The current approach means the Port Board is being forced to cut costs and capital expenditure. This impacts on us all. Now is the time to put up a new vision for the Port that recognises its primary role as a service to this City and New Zealand and its return to the Council must be based on a longer term understanding of its unique role in the City.

The need to increase earnings is being used to justify the current plans to reduce working conditions on the Port including contracting out labour. We support decent work conditions and oppose casualisation in the manner being proposed by the Port. Not only is it unnecessary but it could cause major disruption to its customers and contribute to increasing inequality.”

I’m heartened to hear this from major Auckland businesses and the CTU. We’ve got some smart people working together here who understand that the key to a productive Auckland port isn’t as simple as selling off jobs to the lowest bidder.

I congratulate them all.

Filed under: Auckland, Budget, business, CTU

26 Comments

Women on Boards – NZ’s dismal record

Posted by Sue Moroney on February 9th, 2012

Yesterday recruiting company Korn Ferry released a survey showing New Zealand running last in the Asia/Pacific Region for female directors on boards.

Its embarrassing that China, India, Malaysia, Siganpore, Hong Kong and Australia all fare better than us. We used to lead the world when it came to representation of women. Kate Sheppard must be turning in her grave.

I thought Institute of Directors Ralph Chivers hit the nail on the head when he said:”There is no shortage of women who aspire to work at that level, or potentially suitable candidates. Women have told us they have difficulty getting noticed for opportunities to be promoted.” How refreshingly honest! He wasn’t prepared to use the tired, worn-out excuse that the problem is women dont want to be directors, or that they weren’t good enough and needed “mentoring.” If I had a dollar for everytime I’ve heard that one, I would be a wealthy woman.

Despite the National Government having a glitzy launch of a “Women on Boards” initiative aimed at the private sector in 2009, the reality is they had just scrapped the target Labour had set of getting 50% women on public sector boards. And so the survey shows that there has been no increase in the proportion of women on our boards and in the public sector (where the Government itself appoints board members) there has been no improvement on the 41% representation Labour had achieved by the time we left office. And its important, because research shows that companies do better with women involved in their decision-making. Women directors are better at risk management, less prone to group thinking, better at problem-solving and better able to link to diverse customers. That’s what research tells us.

Across the ditch, they have made some quick progress on this issue by simply requiring companies to report the facts of the organisation’s gender balance. The result has been that women now make up 25% of new appointments to ASX company boards, compared to just 5% in 2009 before the measure was brought in. In less than a year, the number of women appointed to Australia’s corporate boards has gone from 8% to 14% by just taking this simple measure.It seems that when companies are required to look at their own dismal records, that’s when women start to get noticed. We could do the same – actually we were doing something remarkably similar to this with pay equity audits in the public sector before National scrapped it when they came into Government.

Funny that!

Filed under: business, Uncategorized, women

33 Comments

From social partners to bit players

Posted by Darien Fenton on February 3rd, 2012

The emphasis of the Department of Labour Briefing to Incoming Ministers has significantly changed in 2011.

In the 2008 Briefing, the Social Partners (Business NZ and Council of Trade Unions) were referred to frequently. Not now.

The notion of social partnership and tripartism is one that our government initially signed up to. The Jobs Summit, early in John Key’s new government was an example. Kate Wilkinson, Minister of Labour described this in her speech to the International Labour Organisation in 2009, saying :

….”We are setting out a credible road to economic recovery, so we can emerge stronger from the recession than we went into it. ….. In this, we’ve taken an inclusive, tripartite approach, recognising that the problems arising from the current situation affect all New Zealanders. In late February, our Prime Minister, the Honourable John Key, hosted a national Jobs Summit which saw unions, business and Government united by a common desire to do as much as possible to keep New Zealanders in work during this recession….”

The 2008 BIM described the purpose of the portfolio as :

productive, rewarding, and safe employment relationships, including bargaining, mediation and dispute resolution
setting, communicating, promoting, inspecting, and (where necessary) enforcing minimum standards of health and safety, and employment conditions
raising the value and quality of work, by promoting good practice and positive change in workplace cultures and practices
cooperation and interaction with other interested parties – including industries, sectors, and regions – in collaboration with social partners (Business New Zealand and the New Zealand Council of Trade Unions)
ensuring New Zealand both benefits from, and contributes to, international labour standards and fora.

But the slimmed down description of the role of the Labour portfolio in the 2011 BIM says the focus of the Minister and the Department is ensuring :

the labour market regulatory system is effective
employers and employees understand their rights and comply with their obligations
workplaces follow effective and sustainable employment relations and health and safety practices
New Zealand benefits from, and contributes to, international labour standards and forums.

Businesses are mentioned 43 times. Unions are mentioned once. Social partnership is over, it seems.

And significantly, there’s no mention of low pay, of addressing the ever-growing wage gap with Australia and the issues for self-employed and vulnerable contractors. All are workers trying to make a living and have the right to expect more from their government.

I’m looking forward to hearing Kate Wilkinson’s explanation on her annual trip to Geneva this year.

Tags: BIM
Filed under: business, CTU, Employers, labour, Workers

4 Comments

Trade policy to be released tomorrow

Posted by Maryan Street on October 27th, 2011

I will be releasing Labour’s trade policy tomorrow at my campaign launch in Nelson. That is a good place to do it because the Nelson region is built on fine primary tradeable commodities. And yet our exporters, from pipfruit growers to the forestry sector, are having difficulties of one sort or another. It should be up on the website by about 5.30pm. Watch this space – or one like it!

Filed under: #ownourfuture, agriculture, business, economy, international, Manufacturing, trade

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Sir Paul Callaghan – Mapping our Future – here is a plan

Posted by Trevor Mallard on July 6th, 2011

Sir Paul Callaghan – StrategyNZ: Mapping our Future – March 2011

This is a great presentation. Watch it all. Or just skip to 7.47 to look at why we go backwards if the focus of the leader of the national party is all on tourism.

Filed under: business, inequality, Investment, Research & Development, science

13 Comments

The Business Codgerati

Posted by Darien Fenton on June 26th, 2011

There’s been a lot of flak about Alasdair Thompson’s comments last week (and rightly so). He’s shown the worst side of the business codgerati. Business organisations and right-wing acolytes like Jenny Shipley have been distancing themselves big time. The organisation he heads, the Employers and Manufacturing Association (Northern) is having a Board meeting tomorrow to decide his future.

The Sunday Star Times editorial says today that “it’s reminded us silly we used to be” and how this kind of standard sexism was once standard in New Zealand politics and business…….“it’s so 1950’s.”

The SST goes on to say :

“But we should not be too complacent about this. If bosses have become more enlightened and workplaces more friendly to women and minorities, in some ways they are more worker-unfriendly than they used to be…… in some ways workers have less power to push for change than they had in the 1950’s. Some employers think this is fine; they regard unions as obstacles to commercial progress. That is about as crass a stereotype as the one about the skiving menstruators.”

That is so true and well done to the SST for nailing this. While every business organisation now spouts their policies on equal employment opportunity, flexible working hours, work life balance and their opposition to discrimination their prejudices are still there for all to see among many of them.

Every time there’s talk about giving workers more bargaining power or strengthening their rights, the codgerati are out there, saying “it’s a return to the past” or “it’s going to ruin us”.

Witness the reaction to the $15 minimum wage and ACT’s backward looking ideas that youth rates are going to solve youth unemployment.

Still a long way to go.

Tags: Business and workers, Business NZ
Filed under: act party, business, economy, Employers, labour, minimum wage, union, workers rights

9 Comments

Honours List

Posted by Trevor Mallard on June 6th, 2011

Used to be on the Cabinet Committee that made the honours decisions. Always interesting. Often ten times as many nominations as slots available.

There was a big call involved in stopping knight and damehoods. In retrospect I don’t think Kiwis were ready for it. Doesn’t bode well for moving to a republic.

Always easy to criticise a list, for those who are there and those who are not. This one is no exception.

But this one has more individuals who I regard as personal friends than any I was involved in as a Minister. Over a dozen. All deserved. Feels a bit weird. And using Facebook to congratulate also different.

Tags: honours list
Filed under: Arts and Culture, business, education, history, sport

23 Comments

Top NZ companies back R&D tax credits

Posted by David Shearer on May 24th, 2011

There’s an interesting contrast in today’s NZ Herald between its rather muddled editorial that appears to poo-poo the R&D tax credit and what our two largest and most innovative companies, F&P Healthcare and F&P Appliances, are saying in the business pages. Both companies speak of the research benefits they gained from labour’s previous tax credit scheme.

I’ve yet to come across a high-tech company - and I’ve visited a lot - that doesn’t believe tax credits are a great thing. The top 100 of these companies generate $6.5 billion and high value jobs. Inevitable perhaps they would say that because they benefit, but with those sorts of numbers, it’s not rocket science to work out that we all win.

Filed under: business, economy, science, technology, Uncategorized

17 Comments

Budget FAQs #5: Growth Hockey Stick

Posted by David Cunliffe on May 19th, 2011

The New Zealand economy has failed to fire under National. As a result successive rosy Treasury forecasts have been revised downwards. The starkest example is between last year’s May Budget and December Half Year Update.

2010 GDP Track Revision

Implications: The growth upturn “hockey stick” just keeps getting pushed out into the future. The so-called GST tax switch had no discernable positive impact on growth. And the same rosy forecasts will be embedded in today’s Budget. On this track record Budget 2011 growth projections will not be worth the paper they are written on.

When the 2009 growth projections are added the picture gets even more interesting. As this graph shows the actual GDP growth track has been so bad that it is back down to the proections made by Treasury during the darkest days of the 2008/9 global financial crisis.

2009-2010 GDP Track

In other words, despite the international crisis having passed 18 months ago and NZ receiving record prices for our agricultrual commodities, our economy has performed so badly that it is back down to the track Treasury predicted during the darkest days of the crisis. Quite simply, whatever the Govt has been doing is not working.

In a future post we will decompose the relative impact on debt of this under-performance and otehr factors like earthquakes.

There is no coherent plan from National on how to manage debt reduction alongside needed investments in economic and export development, closing the savings gap, repairing the damage to middle New Zealand, and giving all Kiwis hope and confidence for the future.

Labour has an integrated economic strategy that will achive that withi a fully costed programme that will reduce net debt over a 10 year economic cycle. You can see the direction we are heading in set out in a recent speech I gave to Business NZ here.

For the wonks among you, here is the underlying data – all the Government’s own numbers.

	GDP per capita, 95/96 dollars
	Actual	Half Year Update 2009	Budget 2010	Half Year Update 2010
30/12/2008	7,805
30/03/2009	7,700
30/06/2009	7,683	7,683
30/09/2009	7,677	7,694
30/12/2009	7,716	7,721	7,716
30/03/2010	7,741	7,741	7,758
30/06/2010	7,734	7,768	7,802	7,734
30/09/2010	7,701	7,795	7,909	7,747
30/12/2010	7,694	7,830	7,883	7,799
30/03/2011		7,873	7,928	7,859
30/06/2011		7,916	7,973	7,904
30/09/2011		7,967	8,026	7,948
30/12/2011		8,027	8,088	8,010
30/03/2012		8,055	8,118	8,039
30/06/2012		8,091	8,156	8,085

Sources: Budget relevant documents and Statistics NZ series

Tags: Bill English, Budget, economy, Tax, tax cuts
Filed under: Budget, business, Cost of Living, debt, economic, economy, finance, Global financial crisis, Inflation, Investment, jobs, monetary policy, Tax

14 Comments

Texts from Auckland

Posted by Trevor Mallard on May 10th, 2011

Tags: John Banks, Simon Lusk
Filed under: act party, asset sales, Auckland, blogs, business, by-election, Electoral Law Reform, finance, history, humour, informal economy, internet, ipredict, jobs, national, New Chum, parliament, whaling

16 Comments

State subsidised wages or bargaining equality?

Posted by Darien Fenton on April 29th, 2011

I’m doing this post knowing that it will send the right wingers scurrying to their keyboards in a high dudgeon, but it’s a risk I’m prepared to take. Because, like it or not, we have to have the conversation about the how the inequality of bargaining power has contributed to NZ’s low wages.

I was surprised to find this article in the NZ Herald which very succinctly outlines the link between weakened collective bargaining rights and low wages. The authors, Andrew Gawith and Susan Guthrie, describe how the era of the 1930s and 1940s were labelled the “Great Compression” because the gap in incomes between the haves and the have-nots narrowed significantly.

“The policies that delivered this compression – including a strengthening of collective bargaining regulations, which provided a floor to wages and high tax rates on capital – were follow by unprecedented income and output growth that persisted until the 1970′s.”

By contrast, economist Professor Paul Krugman describes the post-1980s as resembling the “gilded age” of the 1920′s – one characterised by a high and rising concentration of income in the hands of a narrow elite.

Gawith and Guthrie ask :

“Do our current labour market laws and institutions deliver the wage “floor” that Krugman (and the IMF) see as valuable to lifting output and incomes?
The fact that we have had to introduce a significant income subsidy – Working for Families – suggests not.

The Employment Contracts Act 1991 undermined the bargaining power of workers, which probably goes some way to explaining why from 1992 to 2009 average real output per worker rose on average by 2% a year, but real wages rose at less than half that price…….”

They go on to describe how the Labour Government recognised that wages were too low, particularly for those trying to raise a family and how Working for Families was introduced to top up the incomes of low and middle income wage workers.

Gawith and Guthrie acknowledge that Working for Families has definitely alleviated financial stress among low and middle income families, but they say it has distorted “market signals”.

“Low paid jobs are a traditional route for younger workers to get more experience. However, under Working for Families, low-paid jobs are more likely to be accepted by older workers with dependents; their living costs are higher and not normally covered by a low wage, but unlike younger workers, their take-home pay (thanks to Working for Families) can far exceed what the employer pays.“

That’s an interesting proposition. Not sure if I totally agree, because my experience of low wage workers is that’s it’s far more complex than that. However, they make the point that experienced workers being employed in jobs that don’t use their full potential detracts from productivity growth and because of Working for Families, they are employed at “artificially” low wages to the detriment of workers without dependents.

And I like this :

“Rather than chasing the dream of matching Australian incomes, let’s first make sure workers with families can live with dignity from the wages their employers pay them instead of having to rely on selective income subsidies from the Government. That may involve giving workers more bargaining power to negotiate an increase in their share of national income. That should be a step towards narrowing the distribution of income and wealth in New Zealand which has broadened over the past three decades and may be cramping our ability to grow.”

And this :

“Joseph Stiglitz states that ….”growing inequality is the flip side of something else : shrinking opportunity. Whenever we diminish equality of opportunity, it means we are not using some of our most valued assets – our people – in the most productive way possible.”

Expect to hear more from Labour on these themes.

Tags: wages
Filed under: business, economy, Employers, inequality, Workers

17 Comments

Tell the Government: Don’t Cut Our Future!

Posted by Trevor Mallard on April 27th, 2011

Flyer

Mediaworks sweetheart deal – more to come

Posted by Trevor Mallard on April 11th, 2011

It is interesting how stories come back to bite governments on the bum when they attempt to cover them up.

Remember how Steven Joyce told us the funding was a a result of an approach by the RBA. We now know that is not true.

Remember how Joyce indicated the funding was spread around the broadcasting community. We now know that over 99% of the funding went to his old company Mediaworks.

And John Key denied involvement. Said in reply to a parliamentary question that he hadn’t discussed the issue with any Mediaworks executive. Now he has admitted discussing it with the Mediaworks CEO.

And that resulted in the $43m sweetheart loan.

It is a bit like the BMW story, he is either exceptionally sloppy and has a very poor memory or he doesn’t tell the truth.

Both TVNZ and the Herald are running the story.

And better still there is more to come.

Tags: John Key, Mediaworks
Filed under: business, media

16 Comments

Economy Stuck in a Rut

Posted by David Cunliffe on March 24th, 2011

Near-zero gross domestic product (GDP) figures for the December 2010 quarter prove how badly the New Zealand economy is stuck in a rut.

Treasury and the Reserve Bank had both forecast zero growth for the quarter. I have taken the view that was about right and that minor variation either side would not change the story.

It doesn’t. Today’s 0.2% is within a shade of that, and is still subject to revision.

The big picture is that the economy is going nowhere because National has no plan.

A breakdown of the statistics is instructive – wholesale trade is down, retail is down, accommodation and restaurants are down, confirming the message that businesses in New Zealand towns and cities have been giving us — that for them 2010 was even worse than 2009.

Cost of living pressures were also clear. Goods and services purchased by Kiwi households are almost flat even though prices rose 2.3 percent in the December quarter alone. This shows Kiwi families are hard hit by the rising cost of living and are having to tighten their belts month by month.

There is no good news on the external side either. Imports rose faster than exports, and the fastest-rising export, raw logs, effectively represents exporting Kiwi processing jobs along with the timber.

Kiwi families and firms are borrowing more than ever before to stay afloat, and the Reserve Bank says this will continue until 2013.

Bill English is presiding over an old-fashioned slump, and clearly has no idea what to do about it.

Last week he wanted to put the whole cost of the earthquake on the country’s credit card, but Prime Minister John Key rolled him a few days later when announcing a zero budget this year.

Economics 101 says that savage budget cuts in the middle of a deep recession will only put more people out of work, undermine confidence, reduce demand and drive down tax flows.

This isn’t a plan. It’s a recipe for continuing economic failure.

Tags: Bill English, Budget, economy, GDP, Tax
Filed under: business, debt, economic, economy, finance, Tax, Uncategorized, wages

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