Surpluses at risk

August 7, 2018

Treasury is warning the government that forecast surpluses are at risk:

. . . It pointed out the latest set of indicators painted a mixed picture of the economy with wages continuing to grow strongly while retail spending weakened.

It said the slump in business sentiment, a cooling housing market and fears of a trade war could knock the economy and the tax take.

If that happened, the government might be forced to curb its spending plans, Treasury said.

The government keeps saying it’s business-friendly but its actions don’t match its words.

Damien Grant writes about the risk policies like the 10 days leave for victims of domestic pose for your business:

We, the business people of this land, are those who create wealth, build roads and dispense antibiotics at 3am. We are responsible for making the payroll, collecting the State’s revenue and satisfying the tyrannical demands of customers.

We are not responsible for solving this country’s problem with domestic violence. At least, we should not be. When we employ someone we are obliged, by law, to give them 10 paid public holidays in addition to 20 annual leave days and up to five sick days. On average, one day in eight, a Kiwi worker can have off on full pay.

Apparently this isn’t enough.

The Domestic Violence-Victims Protection Bill passed this week. Now an employer, who has the misfortune to employ someone impacted by domestic violence, must gift this person another 10 days paid leave.

Forever.

That’s like providing another whole year’s statutory holiday entitlement for any employee who qualifies.

It does not matter if the employee wasn’t the victim, so long as they were impacted by the violence. Nor does it matter if this crime happened decades before they began working for their current employer.

What employer would question someone’s claim to have been affected?

Once you can prove that you have been a victim of domestic violence you are, forever, entitled to be compensated by those whose only mistake was to offer you a job and you cannot contract out of this right. Which means some employers will quietly avoid employing staff they suspect will seek this new entitlement, limiting the employment options for victims of domestic violence. . . 

National was criticised for not supporting the legislation but it was right to be cautious:

When the bill first came up at Parliament it had a strong National Party backing, but following a select committee process in which amendments were made to reduce an employer’s say in the matter, the party got cold feet.

Justice spokesperson Mark Mitchell said that was mostly because of the impact it could have on small-to-medium sized businesses which, he said, could end up in arbitration or strained for time or finance.

“There’s often a second- or third-order effect, and we have to be careful that we understand what those effects may be. At the moment we feel this bill could have an adverse outcome so we’re being very cautious and very careful with it.” . . 

Domestic violence is a scourge but imposing extra costs and uncertainty on all businesses isn’t the solution, especially when, as Kerre McIvoer writes, it won’t help domestic abuse victims: 

I fail to see how this new provision for victims of abuse will save any lives whatsoever.

Every single victim of domestic abuse who has phoned me on talkback over the years has said they were so ashamed and embarrassed by their situation, they couldn’t bring themselves to let friends or family know what was going on behind closed doors. Particularly the men.

The notion of asking for help was anathema to them and abusers know that. Despite the fact that it’s the abusers who should be feeling shame, they are master manipulators.

So the concept of someone who has been knocked about, emotionally and physically, being able to find it within themselves to approach their boss and come clean about their domestic situation seems unlikely.

And it’s not just the financial burden for small- to medium-sized employers that’s most concerning – what about the health and safety ramifications?

If one of their employees tells them they are living with a violent partner then begs them not to tell anyone, and later that employee ends up dead, will the employer be held liable for not divulging that their staffer was at risk? . . 

I absolutely agree that our domestic violence stats are a source of shame and our violent homes are a breeding ground for future offenders. But I really don’t think Logie’s bill is the answer.

And while I don’t have a solution, I would suggest that others do. When Counties Manukau police attend a violent domestic situation, they give it a couple of days to allow all parties to cool off, then go into the home with trained counsellors and try to work out the root of the problem.

The children are asked their opinion – it’s a holistic, wrap-around approach to domestic abuse which gives the people involved the chance to save themselves and their family.

Putting money and energy into that sort of initiative makes a whole lot more sense to me than making businesses cough up 10 days extra leave.

Business is risky.

The more costs and uncertainty the government imposes on businesses, the more risky they become. The more risky businesses become, the less likely they are to invest, the less secure existing jobs become and the less likely new ones will be created.

Less business investment, fewer hours for existing employees and fewer new jobs for would-be workers all result in less tax paid, that means lower surpluses and that in turn constrains government’s ability to fund existing and new initiatives.


More strikes in last 9 months than past 9 years

June 26, 2018

Labour is supposed to value workers, why are so many striking when that party is leading the government?

The worrying increase in strike action under this union-friendly Government will slow our economy, make it harder to do business and affect the access of New Zealanders to public services, Opposition Leader Simon Bridges says.

Union friendly isn’t necessarily worker friendly.

“After less than nine months of this Government 32,000 workers have been involved in industrial action, or signalled their intention to be – compared to just over 27,000 that undertook strike action in the entire nine years of the previous Government.

“And the strike action is escalating.

“Today 4,000 core public servants at MBIE and IRD as well as 150 Wairarapa meat workers announced they would undertake industrial action, following on from the likes of bus drivers and cinema and port workers who have repeatedly disrupted businesses.

“On top of this, around 49,000 teachers are also considering their options.

“That’s around 81,000 workers involved in or considering strike action this year.

“All this is going to make it harder for New Zealanders to do business and access public services like healthcare.

“National supports higher wages and the average wage increased by $13,000 under the previous Government, but the way to do that is to grow the economy while this unrest unleashed by the Government will just slow it down.

“Already the uncertainty is impacting peoples’ quality of life and ultimately the economy. With business confidence already low Labour needs to put the needs of the public and economy first, not its union backers.

“The situation will only get worse when Labour’s proposed employment law reforms are implemented, which are specifically targeted at strengthening unions and weakening the ability of New Zealanders to run their businesses.”

Kim Campbell, chief executive of the Employers and Manufacturers Association also says proposed changes will make it worse:

In a world in which collaboration and flexibility are key to the modern workplace, it seems strange we are trying to reinvent an industrial relations framework which appears built on a foundation of “them” and “us”.

Let’s get the elephant in the room out upfront. Yes, some employers are poor operators, but the employment relations system is effective at addressing this. The financial and reputational costs are high for employers who breach employment laws or seek ways around them.

But the law does not catch all such operators, many workers are exploited and I agree there are problems to address.

My question is, why address this with a major law change seemingly based on the premise that all employers are bad and all employees are vulnerable?

Enforcement is a key part of a functioning framework and more labour inspectors seems an obvious solution.

We need an industrial relations framework that enables employers and employees to have the flexibility to meet the growing demands of the future of work, not stifle it. Recently, IAG and Lion NZ pushed the need for flexible working policies, saying these benefit both staff and employers. This embodies the sentiment that employers want to work alongside modern, forward-thinking unions that offer solutions to help move the business forward. . .

Proposed changes will take employers and employees back to last century, not equip them for this one.

 


Almost spent the lot

June 25, 2018

Nurses and health boards are continuing to negotiate improved pay and conditions in an effort to avoid strikes.

Last-ditch talks between the nurses’ union and district health boards (DHBs) will continue on Monday in a bid to avoid planned strike action.

The New Zealand Nurses Organisation (NZNO) and DHBs’ negotiating teams attended mediation on Friday after nurses “strongly rejected” the DHBs’ latest offer on Monday.

The NZNO issued strike notice to the DHBs on Wednesday for July 5, with notice of a second 24-hour strike planned for July 12 likely to be issued next week. . . 

A survey sent to NZNO members on Monday to gauge their priorities for any revised deal had received close to 13,000 responses a day before it closed at 1pm on Thursday.

A message sent to union member’s said their feedback had helped negotiators be “very clear on what your priority issues are and what will be required on order to avert strike action and resolve this dispute”.

The three main priorities were remuneration, safe staffing and pay equity.

However, whether the first nationwide nurses’ strike since 1989 can be averted remains to be seen.

Nurses on Monday “strongly rejected” the DHBs’ latest collective offer, a $520 million package described by Health Minister David Clark as the best in a decade. . .

A $520 million package sounds generous but there would be $275 million more this year had they not wasted it on free fees for tertiary students, nearly $40 million of which will be spent on students who fail to complete their first year.

It would be difficult to find anyone who thinks spending millions on students who don’t need help is a greater priority than  improving pay and conditions for nurses.

Teachers are lining up for more pay and better conditions too and it would be equally difficult to find anyone who thinks that wouldn’t be a higher priority than fee-free tertiary study.

The free-fee policy is just one of several expensive policies. Another is the winter power payment for beneficiaries, some of which will go to wealthy retirees. These are extravagances that Labour and its coalition partners have put ahead of funding necessities.

Then-National Finance Minister Steven Joyce was laughed at when he said there was a big hole in Labour’s pre-election spending calculations and that they hadn’t factored in pay increases for public servants.

The trouble the government now has finding enough to satisfy nurses shows he was right.

Remember how Michael Cullen boasted they’d spent the lot after his last Budget in 2008?

The current government has almost spent the lot already if it wants to keep to the budgetary constraints it’s imposed upon itself to counter accusations it’s a poor manager of money.

Cullen left power with the new government facing a decade of deficits.

By contrast the current government came to power with forecasts of continuing strong surpluses.

They could have spent wisely, factoring in the need for fair increases to give nurses and teachers much better pay and conditions.

Instead they’ve wasted money on fripperies like the fee-free tertiary study and power payments for wealthy people and left far too little for basics like improved pay and conditions for nurses and teachers.


Public servants paid too well?

June 21, 2018

The Taxpayers’ Union has some facts to dampen public sector wage claims:

Over the last 25 years, public sector incomes have grown much faster than the private sector, while public sector employees also enjoy a higher rate of sick leave costing taxpayers $173 million, according to Public Sector Wage Gap: The taxpayer-funded premium for working for the government, a new report we’ve released today.

If you work for the Government, you earn a third more on average, with taxpayers footing the bill.

This report seriously undermines the public sector unions’ claim for 9-15 percent pay hikes for their members. It blows to bits claims the last Government did not pay bureaucrats enough.

The public sector pay gap nearly doubled since the 1990s. If anything, a wage freeze, not hikes, would be fairer.

Left wing activists and unions would have the public believe that the public sector has undergone nine years of neoliberal hell. But this shows that to be a lie.

Public servants generally have better job security than those in the private sector.

They are also supposed to have a commitment to public service.

Both these factors ought to be reflected in lower pay rates than in the private sector.

Key findings of the report:

  • The gap in weekly earnings between the public and private sectors has grown since 1990, from 18.9% of private sector earnings to 34.6% in 2017. The gap peaked in 2010 at 38.4%. The premium is even higher for hourly earnings (as public sector employees, on average, work fewer hours).
  • If the Government had retained a public sector earnings premium of 20%, taxpayers would save $2.5 billion per year, or $1,445 per household in lower taxes or reduced Government debt.
  • The public sector took an average of 8.6 and 8.4 days of sick leave in 2016 and 2017, compared to the private sector average of 4.7 days per year.
  • If the public sector reduced its rates of sick leave to private sector levels, the taxpayers would save $173 million per year, or approximately $100 per household per year in lower taxes, or reduced Government debt.

Is there something in the public sector that causes more sickness, are public servants less healthy than those in the private sector or is there another explanation?

The Taxpayers’ Union recommends:

  • The Government should set a goal of returning to a 20% public sector earnings premium by placing constraints on public sector wage growth and focusing on growing productivity.
  • If private sectors stagnate or decline (such as in a recession) the Government should be willing to cut public sector wages to match.

The public service is in competition for staff with the private sector.

If it wants high calibre staff it needs to pay them well but this report suggests it’s paying too well.


Some businesses won’t survive

May 14, 2018

Government changes to employment law will undermine flexibility and goodwill, Federated Farmers says.

Feds Dairy chair Chris Lewis said the 90-day trial provisions are highly valued by farmers as a means of giving them confidence to take on staff when the potential applicant has no experience, or a history of anti-social behaviour or poor job performance.

“Anyone can turn over a new leaf but without the security of the 90-day trial business owners can end up paying the cost of giving someone a chance.”

Recruiting, inducting and training new staff is an expensive and time-consuming business.

Employers want to get it right the first time but try as they might, that doesn’t always happen. The 90-day trial period reduces the risk should a new employee be the wrong choice.


Most farmers employ only a handful of staff but the Federation’s submission said it would be “unfortunate” if this option is removed for larger companies “because it is exactly those businesses that can afford to put resources into extra training and support for those who need it”.

The Federation’s farmer members do not have a hire/fire mentality, Chris told the committee. Many find it hard to attract staff to remote areas, and work hard to bring along employees who have the right attitude.

The Federation’s employment contracts are industry-leading, and farmers make use of an 0800 service and peer-to-peer advice, as they strive to be fair employers moving staff along a career pathway.

When a businesses get good employees it’s in everyone’s interest to do everything possible to keep them and keep them happy.

But if they can’t, or won’t, do their jobs or are simply a bad fit for the business and other employees, it’s better for everyone if they go.

The Federation’s submission said too many clauses in the Bill pit employer and employee against one another rather than facilitating an environment for negotiation and agreement.

 For example, farmers had no quibble that employees are entitled to paid rest and meal breaks but proposed amendments say that unless employer and employee agree an alternative in advance, such breaks must be taken at times set out in the Bill.

This is “unduly restrictive,” Chris said, because unexpected situations can arise on the farm.

 “If a cow requires attention during calving, or there is an urgency to finish harvest before rain sets in, it is reasonable for an employer to ask that an employee works on for a reasonable amount of time, and recoups their entitlement elsewhere.”

Tired and hungry staff don’t work well and can be dangerous, but in farming, and many other businesses, it is not always practical to stop work at prescribed times.

Farmers have no objection to employees joining a union or any other association, but current provisions in the Act requiring union representatives to obtain the permission of the business owner before entering the workplace should be kept.

“These farm properties are our homes,” Chris said.

The proposed law would allow union officials to wander into farmhouses without notice.

This is an abuse of private property.

On top of that farmers are being bombarded with messages to treat their property as a fortress because of biosecurity risks – most recently the devastating cow disease Mycoplasma bovis.

Health and Safety is another reason why visitors should be briefed and escorted into work areas. “Given the hazards on farm, the presence of an individual who is in what could be a very large area without the knowledge or permission of anyone else on the farm is extremely dangerous.”

It’s not only businesses which benefit from flexibility in the workplace, workers do too.

Business NZ chief executive Kirk Hope also has serious concerns about the proposals, which might be good for unions but not workers:

Here’s a simple example. If you are a working parent who needs to leave work at 3pm to pick up the kids, and the collective agreement says your hours of work must be 9-5, and if you haven’t opted out, you will need to negotiate with both the union and your employer to be able to pick up your kids. This is onerous and unnecessary.

Fourth, the legislation would compel employers to provide personal information about a new employee to a union. Given the recent furore around Facebook’s use of personal information for marketing purposes, I doubt if many would see it as fair and reasonable for legislation to compel your employer to provide your information to any third party, no matter who they are.

These are only a few of the issues. Currently unionisation in the private sector is around 12 per cent. As with any other business, adaptation and innovation is important for unions’ survival. Legislating to protect a marketing base for membership won’t help unions to adapt, innovate and survive.  

What the legislation will do is undermine trust by testing the boundaries of what most New Zealanders think as fair.

Business concerns won’t be allayed by the interview with Workplace Relations Minister Iain Lees-Galloway on Q&A yesterday when he said  that some businesses would not be able to operate under  the government’s plans.

It’s not just business owners who suffer if their businesses collapse, it’s also the workers, who Labour purports to support.


Alas poor Fortune I knew it well

May 1, 2018

One of Dunedin’s cultural gems, the Fortune Theatre, has announced its immediate closure:

Employees were told at 9am the theatre company would close today, with no further shows to be performed there.

Fortune Board of Trustees chairwoman Haley van Leeuwen said the board had been through an exhaustive process of reviews, and had closed the theatre because it was no longer financially viable.

According to its website it employed 11 permanent staff.

“We would like to acknowledge our staff during this difficult time who have worked hard towards the goal of securing the future of the theatre.”

“We have looked at many different avenues to avert closure, however theatres and their audiences have changed over the years, and we must now take stock, with the goal of keeping the tradition of local professional theatre alive in Dunedin.”

“Whatever future development arises it will be in a new format that represents the future model of theatre in New Zealand.

Fortune Theatre is New Zealand’s southernmost professional theatre and was established in 1974 at the Athenaeum in the Octagon.

It moved to its present location at the Trinity Methodist Church in 1978. . . 

 This is very sad for those directly affected, the arts community, the city and wider Otago.

The first play I saw at the Fortune was Roger Hall’s Glide Time (which later spawned the popular and long-running TV series Gliding On).

It was the first live play I had seen at a professional theatre and the first New Zealand play I’d seen performed.

I was a student then and continued going to the theatre until I finished university.

When I moved back to North Otago a few years later I began going down to Dunedin for plays when I could.

I returned to university about 10 years ago and for the next couple of years two friends and I would have a quick meal before going to Tuesday’s 6pm performance.

Those early evening performances worked well when I was back home, enabling a car load of us to see a play without being too late home.

But alas, in the last few years I wasn’t a regular theatre-goer and the Fortune’s fortunes show that too few others were too.

I am very sorry to read of its closure and hope that efforts to resurrect it are successful.


Windblown timber should be recovered

April 10, 2018

The government denied National Party List MP Maureen Pugh support for her Private Members’ Bill which would enable the harvesting of windblown trees on conservation land following adverse weather events.

“Today I moved a motion in Parliament, seeking support from Government MPs to have my bill adopted and set down for first reading next week. My bill would allow the Director General of DOC to authorise the removal of specified windblown trees on Conservation Land following a significant weather event,” Ms Pugh says.

“This a practical bill which embraces environmental responsibility and supports regional economic development.”

The proposed Adverse Weather Timber Recovery on Conservation Lands Bill follows on from the legislation implemented following tropical Cyclone Ita in 2014, which saw a number of native forests in the West Coast and Tasman severely impacted.

“This 2014 legislation was supported right through the process by local MP Damien O’Connor and his Labour colleague Rino Tirikatene. These two MPs saw the need for this legislation at the time, but it is disappointing the Government didn’t take a similar pragmatic approach today when they denied my motion to introduce the bill.

“Removing and processing these windblown trees which would otherwise lie decomposing on the West Coast forest floor would provide jobs for region along with clearing space for native regeneration – two areas which NZ First claims to be passionate about.

“Recent Cyclones Gita and Fehi have made this bill necessary, as large quantities of trees were felled. We need to be prepared by implementing legislation to deal with significant events like this in the future.”

The West Coast lost a lot of jobs when the previous Labour-led government axed the sustainable logging of native trees.

The National-led government introduced legislation to allow wind blown timber to be recovered after a big storm in 2014.

Pugh’s Bill seeks to allow that to continue.

If the government is serious about regional development, it should support this bill.

Removing and processing windblown trees would be much for employment, the environment and the West Coast and wider economy than the waste to energy project which experts advised should not be funded.


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