Red Alert

Archive for the ‘productivity’ Category

Total Employment Change from 2008 Reveals Imminent Crisis

Posted by on February 21st, 2012

Increase in unemployment under National

Increase in unemployment under National

The Household Labour Force Survey Survey report of the December 2011 Quarter released last week revealed that our unemployment rate slipped slightly to 6.3% from 6.6%. While a rate of 6.3% in itself doesn’t necessarily mean we have reached crisis levels, the focus on the overall unemployment rate does conceal detail about our employment situation that if brought to the surface will shine light on what I believe is an immiment crisis looming in our economic horizon.

Since JohnKey’s National took office in November 2008, 53,000 New Zealanders have joined the unemployment ranks. That’s a 54% increase in the number of people unemployed to a total of 150,000. For these people, National’s promise of a ‘brighter future’ has utterly failed to materialise, especially if you have a mortgage and teenage children you are supporting through school.

While the impact of the recession cannot be ignored, the number of people unemployed has actually increased since the recession officially ended in mid-2009. The official unemployment figures only tell part of the story. Many more people are without work but are not counted as being unemployed. Many are described by the Salvation Army as being “discouraged unemployed”. They would like to work and would accept a job offer if given, but they would not be deemed as actively seeking work because for instance looking for work through a newspaper does not meet the threshold of “actively seeking work”. The number of Kiwis jobless has increased by almost 100,000 under National’s watch to now 261,300 people as of December 2011. In the meantime 59,964 people are receiving the Unemployment Benefit as at December 2011 a fall of 7% from 67,084 as of the December 2010.
So is this it? Is this the brighter future promised to all New Zealanders?

Number of people jobless

Nice to have ?

Posted by on June 22nd, 2011

Went to the gym this morning 30 min on bike with no pressure and 20 min walking or hopping  in pool. Leg still hurts.

But that’s not what this blog is about.

The leader of the national party arrived at work as I did. Around 7am. He had five DPS police officers with him.

His car CR1 was left parked blocking the emergency entrance between the Beehive and Parliament while his driver ran along behind with his bag.

I suppose it makes him look important. But it is not necessary.

Toe in the water

Posted by on June 5th, 2011

Never thought I would find myself agreeing with Bill Ralston – or at least hardly ever, but his column in this week’s Listener, where he says that ‘most of what Human Resources departments do is ludicrous” caught my eye.

Ralston says that

HR people are the new corporate shamans, weaving their spells to improve business outputs to the detriment of any real humantity

He describes some  HR tools – psychometric testing for new employees, the setting of KPIs, the annual employee engagement survey, and most insultingly of all – the “exit interview” – even where a worker has been sacked.

I don’t want to denigrate HR people. It’s important to have competent and capable Employment Relations practitioners among firms and unions.

But the worst mistake HR people make is thinking that they are the voice for their employees.  They’re not and that’s where I think this whole fad has gone horribly wrong.

Someone I met recently observed that he had just attended a conference with 1200 employment lawyers and HR specialists. This intrigued me.

When I first started working as a rookie union organiser in the late 1980’s, disputes were negotiated between hands-on lay people. It would have been hard to find 120 employment law specialists and HR people, let alone the thousands that are out there today.

Ironically, the National Government’s Employment Contracts Act (ECA), which lasted a decade in the 1990’s, was designed to bring so-called freedom and individual choice to the workplace contributed to this.  It spawned a whole new growth industry.

It promoted individualism over collectivism and a “contractual relationship”; it was regulation-lite with words like “freedom” and “choice” prominent in the ideological language of the time (sound familiar?). What regulation there was shifted from collective to individual workplace relationships and a deliberate undermining of unions as representatives of working people.

Positive workplace relations – going, going, gone.

Posted by on May 30th, 2011

The more I hear from this government, the more I believe that they think unions and workers have little role in the success of a business, and what’s good for business is good for everyone, regardless of how people are treated.  Paula Bennett said a couple of weeks ago that “any job is a good job“. She means that workers should just be grateful for the generosity of employers who provide work for them, even where it’s a job on minimum wage (or less), has no job security and in some cases avoids workers’ rights by employing them under disguised arrangements such as contracting.

Some of the cuts in the Department of Labour budget are instructive. They may not have made headlines, but they show this government’s priorities.

One major change is the ditching of the Partnership Resource Centre, which has been run out of the Department of Labour in collaboration with independent associates, who have extensive knowledge in industrial relations and organisational development.

The Department of Labour’s Partnership Resource Centre website describes partnership as  :

…….a modern approach to managing employment and industrial relations. It’s about creating new employment relationships based on co-operation and mutual gain. Across the world, and in New Zealand, many organisations have seen the benefits of partnership. That’s why we’ve been working to become a centre for partnership excellence. We’ve developed a collection of useful resources for people exploring partnership practices, and we conduct research and organise events to educate New Zealand organisations and unions about partnership.

Some of the successful NZ projects include those in hotels, Aged Care and even in Kiwirail, and have reported improved productivity, a reduction in serious workplace disputes and improved trust, less contentious collective bargaining and even reduced legal bills. It goes further than that.  Healthy and safe workplaces also require partnership – where workers are trained and confident in identifying and reporting potential hazards to prevent workplace injuries.  Good for the workers, the workplace and the country’s medical costs.

There are two models of employment relationships. One is confrontational, where workers are expected to be subservient and do as they are told.  In my experience, this leads to resentment, protracted disputes and workers standing on the outside picketing the premises.  Some employers get away with it, because their workers aren’t unionised and they are afraid of losing their jobs. It means high turnover, resentful staff who don’t extend themselves beyond the daily grind and if the workers get a chance, individual litigation through personal grievances.

The other is accepting that workers have a role to play in the business, have skills and ideas that can be harnessed to build productivity, innovation and efficiency.  That means accepting that the workers must have a say and role in what happens at work, and be treated and remunerated fairly for their contribution.

I’ve seen both models at work.  Partnership doesn’t mean either side subsume their views or ideas, and there won’t be disagreements from time to time.  It does mean accepting that both sides have their own independent voice.

There are other cuts in the budget to employment relations education funding which enables unions and employers to provide education on productive employment relationships and rights at work.  That’s been significantly cut for the second year in a row – a small amount now reduced to almost nothing.

Productivity increases require the involvement of workers.  If the government doesn’t get that, then we are doomed to be a long hours, low wage, low skill economy for the foreseeable.

Mind you, Bill English thinks our low wages are a competitive advantage.  These cuts just confirm his views.

The 2025 Taskforce

Posted by on May 24th, 2011

This year’s Budget offered no plan for the future. Full of cuts with no real gain, it was based on a bunch of optimistic predictions about jobs and growth with very little to back it up. Which makes you wonder why the government have spent over $325,000 on Don Brash’s 2025 taskforce? Clearly none of his recommendations have been adopted.

Following news that the Taskforce was to be scraped, I asked Rodney Hide (the Minister responsible for it) a few questions on how much it had cost, whether he was satisfied with it, and what it had delivered. I asked him whether he was satisfied with the performance of the Chair, to which he gave the underwhelming reply: “Yes, because the Taskforce produced two high quality reports.” Two very expensive door-stops if you ask me.

It also turns out that the decision to discontinue the 2025 Taskforce wasn’t made by the Cabinet but was made after “discussions” between the PM, the Minister of Finance, and Hide. In other words, Hide threw his toys after Brash rolled him and the Taskforce got the chop.

Given that the government have spent $325,000 of taxpayer money to effectively write the ACT Party’s manifesto for this year’s election, perhaps now they are rolling in dosh following the Brash coup, ACT would be happy to pay some of it back??

More R&D to build a smart economy

Posted by on May 23rd, 2011

Bringing in tax credits for R&D is the first part of Labour’s package to put NZ back on the path of growing the economy. Its key aim is to incentivise our exporting companies to invest more in new research, lift skills and build the clean, green and clever society.

National’s decision to axe the R&D tax credits in 2008 to pay for personal tax cuts, when the scheme was already in operation, was incredibly shortsighted. It highlighted Bill English as a bookeeper not a leader of the economy. But it ignored what is seen as international best practice. Only a handful of OECD countries don’t offer their private sector tax credits on R&D.

Ironically, Australia has lifted our tax credit policy brought in by the Labour Government and is currently passing through their Senate now.

Tax credits incentivise business to do more R&D. They boost our private sector R&D spend – currently languishing at about one-third of the OECD average. And, at 12.5%  if the full budgeted amount exempted tax is reached, the R&D spend by our companies will lift to more than $2 billion.

All the literature shows that increased R&D translates into greater productivity and lifts economic performance.

The grants and vouchers announced by Mapp last year – after a wait of two years after axing the tax credits – are effectively handouts from government. They lift government R&D spend slightly, but encourage business to put out their hand for a hand out.

And who gets a grant is decided by a Wellington bureaucrat not an entrepreneur. Only 40%  of those applying for grants were successful. Those who missed out are the innovative entrepreneurs with smart ideas and need that lift.

 It’s a first step to increase our productivity, but don’t underestimate the importance of pushing R&D.

Skills development – another 2010 issue for 2011

Posted by on January 9th, 2011

The Government’s performance must be measured not only by what they have done but also by what they have not done.

In my mind one of the most appalling omissions of the Key National government is in the area of skills development.   In 2010 $55 million was cut from industry training and went instead to increasing the number of university places.  While I support greater investment in our Universities and Polytechnics and while there may be areas of underspending or poor performance by some Industry Training Organisations the answer is not to take money away from a focus on developing the skills of  those already in the workforce but to look at improving performance and new iniatives.  There has been an absence of action by Government.  The agreed Skills Strategy was dropped, the Skills Forum scheduled to meet 6 times in 2010 did not met once and no new initiatives around upskilling the workforce have been actioned (or even announced).

At every level the need for investing in people and providing ongoing opportunities for upskilling is compelling and yet this is an area of almost complete lack of action.  At a time of low economic growth and high unemployment this is an essential component required to lift our economic performance.  This is recognised by many other countries and indeed has been part of stimulus packages in many of them.

Increasing skill levels is well understood to lift workplace productivity – it is not the whole answer but a significant element.  Higher skills, higher productivity and higher wages are inextricably linked.  The structural problems in all of these areas are clear.   Increasing skills provides greater employment opportunities for individuals and also the potential for greater employment security.  Along with David Cunliffe, Trevor Mallard and Grant Robertson we have been doing a lot of thinking about the links in these areas and will have good policy options to put to the country this year.

The positives are not just economic.  Skills development includes improving literacy, numeracy and IT skills; it includes the so called ‘soft skills’ like problem solving, team work, self management as well as technical and trade skills. Skills development can be industry specific or generic and must be seen as an ongoing need.  Learning pre-employment, on the job and in the community as part of life long learning.  As people develop their skills they have the opportunity to increase in confidence and in their ability to participate at work, at home and in the community.   Just imagine the benefits to a family if a parent’s literacy is improved so that they can help their children learn to read or help with their homework.

The importance of the workplace in skills development through apprenticeships, through industry training generally and through deliberate pathways to progress both skills acquisition and skills utilisation and improved pay is fundamental.   There must be a commitment to providing opportunities to re-train to reflect changing needs including situations where people become unemployed through redundancy.  Most of us spend a significant portion of our adult lives in the paid workforce.  80% of the workforce of 10 years time are already in work so this area warrants a great deal of investment.  The respective contributions of businesses and government is something that needs to be agreed as does the respective role of employers, unions, Industry Training Organisations, Universities and Polytechnics. All have a role to play.

What is clear is that National has no vision about the potential of skills development , no real commitment to this area and certainly no understanding of the need to have significant investment in the skills development of New Zealanders.  Labour has a strong track record in this area and we will provide a much more ambitious approach.

Fran’s hoping for too much

Posted by on November 10th, 2010

 Don’t always agree with Fran O’Sullivan but her analysis this morning gets to the core of the choice we are facing in Economic Development.

Is John Key preparing to inspire New Zealand to make the leap from a consumption-led economy to one driven by a smart investment ethos?

A bit like Singapore, perhaps, with its strong focus on using domestic savings to fuel growth via the Government-initiated investment and savings funds which have provided much of the cash that has propelled the development of its companies in the past couple of decades.

and :-

So far there is little questioning – at least in public – of why the country has to wait until the oilfields are proven before taking a leaf out of Norway’s – or preferably Singapore’s – book to increase sovereign wealth.

The purists will inevitably chime in that the Government should retire its own debt before setting up another investment vehicle.

This is the kind of thinking that led Finance Minister Bill English to slash transfers to the NZ Superannuation Fund which is supposed to help offset the bigger burden super will impose on Government accounts in future years.

Super Fund boss Adrian Orr has already earmarked some of the fund for what is arguably a nation-building purpose by investing in various New Zealand entities like Shell’s downstream business and Auckland International Airport shares when each looked likely to be sold abroad.

Orr now wants to invest in New Zealand farms. The fund is also expected to co-invest with Fonterra in expanding its farms business overseas.

But the problem is that the fund is set up with an over-arching purpose of offsetting superannuation costs – not to help grow the economy by providing strategic investment capital.

Key yesterday dropped a rather strong hint that the Government would announce new policies to increase the savings rate in next year’s Budget.

English made a start in that direction in his May 20 Budget when he unveiled a tax-go-round that put more money in the pockets of working New Zealanders and reduced the tax rates on various savings vehicles.

Many Kiwis are now retiring personal debt at a faster clip.

But the Government is in a classic Catch-22. Does it continue to inject a large fiscal impulse into the economy by borrowing up large to fund Government spending (including the major construction projects) and middle-class tax cuts?

Or does it begin cutting Government spending faster so it gets on top of its burgeoning deficit?

This is not an easy decision – particularly as there is now considerable evidence that not enough of the additional money the Government has borrowed to fuel the fiscal stimulus is being spat back into the economy via growth-fuelling consumption.

At some point the question will have to be asked: is there any point in borrowing more to fund tax cuts if taxpayers simply use the extra to retire personal debt?

Maybe we would be better off tipping some of those “cuts” into a Government investment vehicle to provide extra capital for our companies to help fund their growth and create jobs.

I don’t think Key has the balls to veto English’s objections and run with it – happy to be proven wrong.

High wage work vital to fairer outcomes and economic development

Posted by on October 18th, 2010

One of the very exciting aspects of conference for me was showcasing  the work that has been done on bold new economic policies.  Policies that are prefaced on the belief that fairer economies are more successful economies and that there are fundamental structural problems in our economy that require a fundamental shift in approach. 

One important policy area that is key to both fairer outcomes and changing our economic performance is our employment relations policy.  A lot of work has been done by the CTU, Labour affiliated unions and Labour MPs to re-cast our policy.  There is a recognition that while the Employment Relations Act was a necessary response to the damage of the Employment Contracts Act, it was not sufficient to really shift outcomes for wage and salary earners.  In particular the ability to collectively bargain has proven to be an elusive right for most New Zealanders.  As a consequence wages have lagged and many have been dependent on  changes flowing from increases to the Minimum Wage.  

Low wages have huge negative impacts – for families, for communities and for our economy.   Low wages mean many struggle to make ends meet (or can’t make ends meet).  Low wages mean that essential investment in lifting productivity by investing in technology and lifting skill levels has not had the necessary economic imperative.  If you have to pay decent wages you become focused on getting the best possible results.  Low wage workers are seen as readily replaceable commodities.  Low wages pushes our families to Australia to get a better deal (on average wages are 30% higher).

So the new employment relations policy is focused on delivering the benefits of collective bargaining to more New Zealanders and importantly the mechanism for doing so is created through extending negotiated outcomes to become industry standards.  This will require industry level negotiations. What this does is to facilitate focus on industry wide issues like training and qualifications and standards. It requires cooperation at the industry level. 

In my mind this is vital to shifting our economic performance.   If firms can compete on driving down wages and conditions inevitably a productivity enhancing investment approach comes under pressure.  Short term cost reduction becomes the driver.  We cannot become a high wage, high skill and highly productive economy with this approach.

CTU President Helen Kelly gave a very clear and passionate elaboration of a new employment relations framework.   As she says ” It is time for a new look. While this Government has proven to be a disaster in all of these areas (high unemployment, low wages, long hours, unfair taxation, reduced social security and public services – my summary) , it has been able to get away with it because the current economic paradigm is completely dominant and unchallenged.   That paradigm tolerates poverty as a natural partner to wealth, that paradigm values wealth over any or all social values and that paradigm makes working people the victims of all and any of its failures”.

A new employment relations framework is necessary. It is necessary because it is vital to shift to the type of economy we need,  it is necessary from a rights perspective (real rights to collective bargaining and to having an independent voice) and it is necessary to deliver a decent standard of living for all New Zealanders.

more, More, MORE

Posted by on September 30th, 2010

While Red Alerters have been debating tax and GST this week, Carol Beaumont and I have been wading through the submissions to the Select Committee on the Employment Relations Amendment Bill and Holidays Bill.

Yesterday and today were long days with submissions from a mix of employers, unions and individual workers.  What’s disappointing is how employers seem to go onto autopilot – not only supporting National Party legislation, but wanting more still.

After weeks of the Minister of Labour claiming that the 90 day trial period is “voluntary” and that “employees don’t need to have a trial period if they don’t want one” her business supporters are saying that’s not enough.

Business New Zealand, EMA, the Hospitality Association, Air NZ, the Meat Industry Association, Ports of Auckland and a whole raft of other employers are saying the 90 day trial period should be the default provision for every worker in New Zealand.

What that means is your job will be subject to the 90 day trial automatically.

Depressing.  I often wonder if employers actually think, because if they did, they would know that this is not the way to productive workplaces and closing the wage gap with Australia.

However, there’s been some lighter moments.  Our Chair, David Bennett is struggling with the notion of unions and their role, even although the whole basis of the Employment Relations Act is around building productive employment relationships through good faith, trust and confidence and the promotion of collective bargaining.

His boss, John Key is quite happy to recognise unions as “social partners,” to engage with them to tap into the ideas of workers to get the economy through a recession.  The Government (along with Business NZ) confidently fronts up to the ILO every year and boast about NZ’s tripartite relationships – yet Mr Bennett thinks that unions are like lawyers – offering a service – and as such, should have no “special” rights.

Clearly, such old thinking is still alive and well in the National Party.

The consequence of the radical change in the early 1990s and the low levels of unionisation and collective bargaining is that New Zealand now has a thriving employment law industry with literally thousands of lawyers – all of them making good money out of employment relations.

We’ve heard from some of them on the select committee and while I have respect for their profession, quite frankly, few of them have a clue about the day to day relationships that are needed in the workplace to make it operate productively.

The Employment Relations Amendment Bill (No 2) and the Holidays Amendment Bill are a lawyer’s gold chest. I predict we’re going to see quite a few more of them in the Employment Authority and Employment Court in the coming years if these bills go ahead.

Hi-Tech generates $5 billion

Posted by on September 15th, 2010

The hi-tech sector is in the NZ Herald today – telling a story that many of us already know, but doesn’t get much coverage.

Our top 100 hi-tech companies earn $6.7 billion and still show positive prospects for growth. Greg Shanahan, the founder of the Technology Investment Network predicts the sector could outstrip dairying. Bold words, but wouldn’t it be good see this sector growing – and diversifying our economy?

If we want to catch Australia (a pretty naff goal if you ask me) we’re going to have to grow dairy 5 times. Can’t imagine 5x more cows or that amount of new productivity. The hi-tech sector – commercialising smart ideas on the other hand has less or no carbon miles, produces smart, high paying jobs and generated export revenues. It has more potential if we get behind it.

Nearly 80% of what our top 100 hi-tech companies produce is exported.

A good story that gets too little attention.

Karoshi – could it happen in NZ?

Posted by on August 25th, 2010

When it comes to working hours, New Zealand is among the least regulated countries in the OECD. Once, we had a 40 hour week, 8 hour day, but not these days.  New Zealand workers work longer hours than any other country in the OECD, other than Japan. Bizarre as it sounds with our level of unemployment and under-employment, the only working hours regulation NZ has is in regard to meal and rest breaks, which is currently under attack from the NACts.

But working harder and more hours for less money during the recession is starting to take its toll. Job satisfaction is declining, with many workers — including top performers — saying it’s time to find a new job.

Of particular interest is the description of death by overwork in Japan – called “karoshi” and in China “guolaosi” which has become such an extreme problem that those countries have introduced legislation that allows surviving family members to sue companies involved.

In Japan, a typical karoshi victim is that of a businessman who dies at his desk after too many 80-hour workweeks. But several international studies (in Finland, Israel, New Zealand, the United Kingdom and the United States) have shown both men and women are at high risk for “overwork” consequences — heart disease, obesity, insomnia and persistent fatigue, but women are far more likely to suffer mental health consequences, especially when they do not take holidays.

A  recent US survey found that 40% of  professionals are thinking about quitting their jobs. They’re tired of not being promoted, bosses that don’t share company goals, being overworked and having bonuses slashed.

And surveys in NZ ths week show that NZ employers made who deep cuts into their skilled workforce during the recession are now regretting it, because finding replacement workers is much tougher than they thought.

NZ employers are getting to the point where they have maxed out workloads for existing staff, with rising work hours for those who still have jobs.

The result?  Too much hard work – whether unpaid or paid overtime — really does hurt (and kill) people. Workers’ lives have gone from bad to better to bad all over again. So, is it time to to ensure (again) that we don’t have to feel guilty (or fearful about losing our jobs) for taking time off?

With the National Government intent on selling the fourth weeks leave of annual leave and weakening the regulations around meals and rest breaks, I suggest that we are heading backwards, and perhaps toward a NZ version of karoshi.

Plain old fairness

Posted by on July 25th, 2010

I’ve been thinking a lot about the Government’s proposed new Labour laws. And why they are being introduced. There’s no evidence, other than anectodal, from employers to change the way sick days are handled. There’s no evidence of more jobs being created through the 90 day law, there’s no evidence that making it harder for unions to enter workplaces and talk to members will make workplaces more productive.

There’s no evidence that suppressing wages and working conditions for all New Zealanders who work will make New Zealand a more productive country.

In fact, there’s more evidence that shows it will make us less productive, more fearful and inhibited and less innovative.

And leaving aside the fact that it makes a complete mockery out of the “aspirational” goal to close the wages gap between NZ and Australia.

It’s basically about fairness. Lack of fairness. That’s what’s touched a cord with people. And that’s why Labour has to fight.  A strong sense of what’s fair, what’s right and decent lies at the heart of what it means to be a New Zealander. Everyone gets that.

Why then is this government making working people feel as if they’re a bunch of slackers who are taking advantage of their employers?

Why, are they deliberately changing the dynamic between employer and employee to give employers a lot more power, particularly when a worker is at their most vulnerable; starting a new job.  Why would this government be promoting insecurity and fear within our nation?

What possible benefit will this bring?

Productive employment relations?

Posted by on July 17th, 2010

Members of the National Government say the word productivity a lot.  I certainly agree there is a need to lift our productivity as a nation.  However I get annoyed that there is little real action and no focus at all on workplace productivity.

In fact the track record of this Government, including the recent announcements on extending the 90 Day No Rights provisions and limiting union access to workplaces, has taken a cost reduction approach to employment relations.  Lifting employment standards and improving the quality of our workplaces doesn’t feature. 

In my speech on the Prime Ministers Statement to Parliament in February I made the following comments :

Where is the government investment in industry and regional economic development?  Where is the recognition that we need to lift the quality of workplaces – the wage rates, the work conditions, the quality of interaction. Productive employment relations. This Government sees workers and their rights as a cost to be reduced.

Look at the double speech in the PMs statement. Under the section on Better Regulation we have:

“Whether labour laws are imposing excessive costs on the country and holding back opportunities to create jobs”

Holidays and PGs not to mention union access to workplaces and collective bargaining. Remember what this meant last time and if we want to find reasons for the gap in income between Australia and NZ  this is a good place to start.

Attacking workers rights and reducing current standards will not encourage the motivated workforce we need. Failing to invest in improving skills in our workplace will  similarly not provide for a motivated workforce able to work smarter.  There were no new initiatives in the area of workplace learning in the Budget.  In fact under the Labour portfolio we see money moved from the Skills area to a completely different area of work.  The Skills Forum spoken about very positively by the Prime Minister at the CTU conference last year has met once under this Government (still we know how reliable undertakings made by John Key to the union movement are!)

A recent report on management practices in the manufacturing industry showed that NZ managers surveyed are “average to middling by global standards”  Furthermore people management emerges as the weakest area.  And we are going to give poor people managers the right to fire at will for 90 days (except for discrimination covered by the Human Rights Act)!

 A specific need identified in the Skills Strategy agreed by the last Government, Unions and Employers was around the need for more management training.   We need forward looking people management that recognises that paying more not less, improving conditions of employment and genuine flexibility and respecting the need for independent worker voice that is engaged in improving the workplace and the products and services created/provided  is what is required. Workplaces that are focussed on lifting productivity and where productive employment relations are seen as an integral part of this. We have some of these businesses but we need many more.

Fundamental to this approach is respect.  I know from my own experience as a union organiser that workers value and desire respect at work.   Respect for them as individuals but also respect for their unions.  They also want to work with and for employers they respect.   

I would like to see a real focus on productive employment relations but it will not happen under the approach being promoted by this National Government.

Key shows true anti-worker/anti-union colours

Posted by on July 15th, 2010

The  announcement today of the removal of the right of  workers to have union officials on their workplace is an attack on workers and their internationally recognised rights to organise in unions, to have an independent voice and to collectively bargain.  This is back to the bad old days of the Employment Contracts Act during which many workers did not know about their legal rights, including their right to join a union and to collectively bargain to improve their wages and conditions. For those who need reminding this was a time where for many workers wages and conditions of employment were reduced, and when a significant gap in wages between Australia and New Zealand was established.  

This announcement is a clear move to keep onside with Key’s more extreme employer mates at the expense of workers.

The Minister of Labour’s comments on TV1 News tonight were telling.  She explicitly stated that employers are in charge of their workplace and that they should have the right to restrict access of union officials to enter their workplace.  She is clearly showing her attitude that the workplace is not a place where workers and employers interact to create highly productive and well rewarded outcomes or indeed where worker participation and say have value.  For her the workplace is a place for management control of resources including the human resources (workers). It is worth noting that the current right of  access to workplaces has to be used in a reasonable manner.

Furthermore the Minister of Labour is either naive or on another planet if she believes what she said that restrictions “wont happen often”.  As a union organiser during the 1990s my own experience and the experience of most union officials I know was to be repeatedly denied access to workplaces.  In non unionised workplaces or workplaces with high worker turnover the problem was particularly acute with many workers not being given a genuine opportunity to join a union and gain all of the protections and opportunities provided by union membership.

Access of union officials to workers at their workplace ensures that protections including health and safety and compliance with employment standards are more likely to be honoured.  Access of union officials enables workers to choose to be represented by a knowledgeable person in grievance situations (by the way I know many employers who acknowledge that grievances are dealt with more effectively when there is a union organiser involved).  Access of union officials provides support for workers to organise in their workplace including the training  and support of on site worker representatives.  Importantly these representatives are often able to work with employers to both identify and deal with workplace problems. They are certainly essential to facilitate a more engaged workforce where workers can contribute their ideas to improving the workplace and the products or services created/provided there.  Access of union officials provides support for workers to organise collective bargaining  for improved wages and conditions (collective bargaining provides for better and fairer outcomes for workers as well as providing certainty for employers).  The reality is that most employers do not genuinely negotiate with most workers on an individual basis.  For many workers the imbalance in bargaining power is clear which hampers genuine negotiation on an individual basis. 

This short sighted attack on workers has negative consequences not only for workers but for initiatives to change our workplace into the productive, well rewarded places they need to be for real growth in our economy.  Underlying the attack is an negative attitude to unions (so much for the rhetoric about the valued relationship the government has with the union movement) and a view that workers are a cost to be controlled (young and vulnerable workers will be most hurt).  Once again New Zealand will join the ranks of those countries that are held up as breaching international labour standards.

Better management needed

Posted by on July 11th, 2010

Rod Oram has written this week on the poor quality of NZ management. Really just confirms what we know. The potential to govern and manage better is one of the reasons NZ firms get taken over.

But most New Zealand companies are weak on strategy and management, according to two recent reports here. As a result, they are a drag on the economy.

New Zealand ranked 10th out of 17 countries in terms of quality of management in Management Matters, a government-funded study that used methodology from the London School of Economics and McKinsey, the global management consultants.

If a New Zealand company lifted itself from the 25th percentile of the 17-country ranking to the 75th it would increase its output by the same amount as if it had deployed 41% more labour or 77% more capital, the study concluded.

BUDGET 2010: Jigsaw Pieces Click

Posted by on June 1st, 2010

The jigsaw pireces of the Budget are starting to click in the public mind if recent polls are any indication.  In the last week :

  • The IMF described NZ’s savings gap and net international indebtedness as “among the largest of any advanced nation”
  • Analysis shows a $9.2bn additional fiscal hole in the Budget by 2023 arising from the tax changes
  • Budget documents show expenditure as a % of GDP falling from 33% to 28%
  • Bill English floats Kiwibank sale as one example of a number of SOEs ripe for partial privatisation.

In other words: give away taxes up front (very largely to their mates); run an out year deficit (deliberately); compress spending (as ‘prudence ” then demands); and flog off what is left of the family silver to fill the remaining gap (dressed up as mum and dad savings products, of course).

What does all this mean for the average Kiwi?

  • despite the govt spin, they are worse off for the next four years at least due to the toxic cocktail of GST, inflation, other govt charges and taxes, and slow wage growth;
  • public services like Heatlh and Early Childhood Education will be slashed as new spending lags inflation ($300m short in Health) or deliberate policy changes bite;
  • the outlook for public services gets dramatically worse as the National Party tries to resize the state to 28% of GDP – although they won’t want to talk much about that before the election;
  • the underlying economic problems reamin unresolved and get more intractable over time.   There is no credible plan for growth and jobs.

Moral of story: do NOT let National get a second term   Stop the malign juggernaut before it does irrepairable damage.

More nasties in Budget 2010

Posted by on May 21st, 2010

As we get into the fine print of the Budget documents, we are finding other nasty things that will affect workers. I’ve already posted on the cut to the redundancy tax credit, but here’s a couple of other things :

Employers who use the Job Opportunities subsidy will be able to sack workers in the first 3 months under the 90 day Act. Last year, when Paula Bennett introduced the Job Ops scheme, she and Kate Wilkinson quickly backed down when they were asked in the House about whether the 90 day trial period would apply to these temporary positions that the taxpayer is subsidising. Here’s the quote from the MSD Department’s web site :

A Job Ops opportunity cannot be accepted if the employment agreement attached to the job contains a 90 day employment trial provision. If the employer removes the 90 day employment trial provision from the employment agreement, then the opportunity can be accepted on the basis that this is a 6 month opportunity.

So what’s changed? I suspect that the government is readying itself to open up the 90 day trial period to all workers. But this one doesn’t make sense, when the jobs are fixed terms of six months only – it’s highly suspect and I am deeply worried about vulnerable young workers being treated like this.

The second nasty is the slashing of employment relations education funding from $2 million to $889,000 will deliberately undermine education for in areas such as employment rights, representative training, and health and safety.

This cut affects both employers and workers.  It shows that the government thinks there is nothing more to be learned about the importance of workplace relationships in improving productivity and that workers have nothing to contribute.

It also leaves wide open the question of health and safety training in the workplace.  With one worker a week dying in workplace accidents, and many more injured, I think the government’s commitment to ensuring workers are healthy and safe at work must now be seriously questioned.

BUDGET 2010: Pass the Berocca

Posted by on May 21st, 2010

After the beehive-spin induced euphoia wears off and the hangover sets in, middle New Zealand will reach for the Berocca and try to work out what the Budget really means for them.

Not to add to the inevitable headache, but here are a few of the facts of life for the morning after.

  1. For at least 3/4, and maybe 90% of the country, by the time they eat a whopping 5.9% inflation next year (Treasury Budget forecasts, not NZLP numbers!) they will be worse off until at lesst 2012/13.   For a family with 2 kids on $72k for example, $55 a week worse off.
  2. That inflation will feed into mortgage costs and rent rises.  It will result, quite rightly, in pent up wage demands from workers who have gone without wage rises for the last two years. 
  3. While its ok that the middle income brackets got some income tax relief, and would have likely got more relief from us, the tax cuts are way too skewed to the top.  You just can’t get around the fact that someone earning a $million a year gets $1000 a week back.  That is going to make the haves/have nots gap wider.  And that gap will inevitably worsen over time, undermining the Kiwi dream and taking us further from the “fair go for all” kind of place we want to be.
  4. That is made worse by the underlying agenda of shrinking the state and the services it can provide.  We have already seen home help for the elderly branded “low quality” spend and cut.  Health’s new money in the Budget is, we reckon, about $270 m short of standing still given next year’s inflation forecast.  That means more cuts to the services and more pain for the vulnerable.
  5. My personal gripe is early childhood education.  What has the Govt got against quality preschool education?  Why is it swiping $100m pa from that?  Labour will lead in this area and every family with young kids will hear us. 
  6. Rebalancing the econmy is way undercooked.  Take away the smoke and mirrors of the tax switch, and we are still left with residual taxt incentives for property and LAQC avoidance mechanisms.   Proof:  LAQCs sheltered $2.3 billion of taxes in 2008.  The tinkering in the Budget trimmed only $70m p.a. of that.  
  7. There is STILL no credible plan for growth in this Budget.  The National Govt seems intent in relying on “passive” instruments. I have no problem with dropping the company rate – provided the fiscal balance can support decent public services (personal view – see “About” on the blog site) – but that cannot be enough to get the export sector going on its own.  What about the R and D tax credits?

The strucutral problem remains: we don’t export enough, we don’t save enough, and we don’t innovate enough.  As an economy we are short on capital, technology, skills and IP.  Budget 2010 does not fix that.  Time is short and the job is urgent.  When NZ wants positive action, Labour will be ready to lead.

As the bubbly wears off in the Beehive and the Berocca gets passed around the country; the poor, the forgotten middle class and the structural problems of the economy have not been moved forward by this Budget.

It remains a suger-coated tax swindle.

It remains a step back, not a step up, and certainly not a step change.

BUDGET 2010: Neither Fair Nor Fixing

Posted by on May 20th, 2010

It’s Budget Day.  You’ll be hearing lots from us over the next few days and I hope many of you will join our Finance Team live here on Red Alert tonight at 8.30 pm.

Most New Zealanders already understand that a Budget that (at best) delivers only marginal gain to middle and lower income earners and a whopping great windfall to the top end, is not fair.  It is however, precsely what you would expect from National.

Equally important, the Budget as it has been foreshadowed will not fix the underlying problems of this economy: lack of savings, skills, innovation and exports.  These are exactly the themes Labour is pushing – as reflected in todays Dominion and Herald (note the Herald got the headline wrong).

If you don’t believe me on this – just refer to Swtizerland’s IMD World Competitiveness Ranking, which shows NZ slipping back for exactly the reasons Labour has been saying. 

Think about it, if the problems are insufficient savings, exports, skills and innovation, how on earth is raising GST and an income tax windfall for the wealthiest possibly going to address that?

It proves our underlying critique of this visionless National Government –  they had “nine long years” to think up policies to take the country forward, to deliver on the step change they campaigned for – and so far, nothing.