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Business New Zealand Issue 65

Business New Zealand Issue 65

More transport woes The Green Party’s Road Traffic Reduction Bill promises further transport woes for the productive sector. The Bill aims to reduce road traffic by shifting freight to rail and coastal shipping, and shifting people to public transport, cycling and walking. The freight proposal isn’t workable – business needs fast, reliable door-to-door transport, and rail and shipping can’t provide that. As well, the process of “shifting” people’s transport choices would require extreme measures – either by regulation, higher fuel taxes and road user charges, or by starving the roading system of funding. Any of these would increase the cost of transport, with knock-on increases in the cost of goods and services. Business NZ says the Bill shouldn’t proceed. For more information or to contribute to Business NZ’s submission contact mailto:

Big payout to AWOL employee A Maori mental health worker sacked by Good Health Wanganui for taking unauthorised leave has received a $15,000 payout for stress and humiliation plus six months’ wages. Employment Court Judge Coral Shaw ruled that the Maori mental health worker had suffered whakama (shame) from being asked to pack up and leave and from not being afforded the dignity of a poroporoaki (farewell ceremony). The Judge said being asked to pack up and leave was culturally inappropriate. This is a worry – are there now different standards for Maori and Pakeha sackings? A further worry is the size of the payout: it follows the Employment Court Chief Judge’s recent proposal for bigger payouts (above $10,000) for unfair treatment and distress. Contact mailto:

Govt-dominated committee shouldn’t rule on Privy Council Who should decide whether NZ scraps access to the Privy Council? Some politicians are calling for a referendum - because it would be a massive constitutional change - but Attorney General Margaret Wilson wants the Justice select committee to recommend on the matter. Is this appropriate? After all, Government MPs have a majority on that select committee... Contact mailto:

Greenhouse agreements ‘picking winners’

The government’s policy for helping companies adjust to the post-Kyoto environment is skewed. ‘Negotiated greenhouse agreements’ won’t be available for all companies that need them; very few companies will qualify, and those that do qualify will have to disclose full details of their financial position to the Government. And the final decision on who’s eligible will rest with the Ministers of Finance and Energy – looks like a ‘picking winners’ policy. Contact mailto:

Skills shortages - the free market?

The Engineers' Union is claiming that the free market reforms of the ‘90s are responsible for current skill shortages. They may be right - but not for the reasons they have suggested! A strong argument can be made that today’s high levels of business and employment growth are the result of the reforms of the ‘80s and ‘90s - and these have led to labour shortages. But to suggest that the National Government 'scrapped the apprenticeship scheme' in the 90s is missing the point. 1992 saw the introduction of the Industry Training Act, which established industry training organisations. Industry training has grown steadily since that time, to the point that there are now over 90,000 people involved in workplace learning each year. Labour introduced the 'Modern Apprenticeship' brand as part of the wider industry training system and there are now over 4,000 modern apprentices, forming part of the wider industry training strategy. The reality is that there is broad bi-partisan support for workplace learning, and no one benefits from politicising the issue. Contact mailto:

Marine reserves may be unlawful

Tying up our exclusive economic zone with marine reserves may well be unlawful, says Business NZ. The Government wants to set up ‘no take’ reserves over 10% of our EEZ (Marine Reserves Bill, currently before select committee). But Business NZ’s select committee submission points to a legal opinion saying countries don’t have the right to exclude activities from their EEZ. Also, the Bill includes no analysis of the economic consequences of such a move. Contact mailto:

How the state shackles business

Today’s National Business Review features Business NZ CEO Simon Carlaw’s view on compliance costs facing medium-sized NZ businesses. Reporting on analysis undertaken by Business NZ, he says the total extra costs imposed for 2003 as a result of Government decisions come to more than $43,000. “The cumulative effect of this $43,000 extra impost on a mid-sized business must be to hold back growth,” he says. “It will cut the number of new jobs created as well as the number of small companies that survive to become big ones.” Extra costs arising from Government actions and decisions include changes to holidays legislation (over $20,000), self-insurance and other costs imposed by the Health & Safety in Employment Act Amendment (around $9,000), higher energy costs arising from the Government’s failure to deal with the RMA ($6,000), higher rates ($900) and others. The full analysis is in The Great NZ 7-Day Service Co. Revisited on Contact mailto:

Hazardous substances inquiry ‘duplication’

Business NZ says the Ministerial Inquiry into the Management of Certain Hazardous Substances in Workplaces is not necessary, because: there is enough regulation already to manage those substances (aldehydes and organic solvents used in manufacturing, printing and the health sector) OSH and ERMA are already in charge of those issues OSH has already produced bulletins on the safe use of those substances The only question may be whether OSH and ERMA have the resources to reach their target (the manufacturing sector, for example, includes over 16,000 small businesses with fewer than 10 employees). The inquiry money would be better spent ensuring existing regulations are adhered to. Contact mailto:

Manufacturing eased in December

The latest ANZ-Business NZ PMI (Performance of Manufacturing Index) records a PMI value of 56.4 for Dec 2002, down 8.6 points from the previous month, but still indicating expansion. For most of the last quarter NZ has recorded strong expansion, unlike the US, Japan and the Eurozone whose PMI results signified a period of relative contraction. December’s results mean NZ’s index is now closer to Australia’s. Four of the five sub-indexes recorded expansion in Dec (production, employment, new orders and deliveries). The finished stocks sub-index was again the lowest sub-index for the month, but a low value for finished stocks is an indication of high inventory turnover due to strong sales. Seven out of the eight industry sectors showed expansion, with only one sector (petroleum, coal, chemical & associated products) recording a decline. All regions recorded expansion, although only Otago-Southland’s expansion exceeded that of the previous month. The full PMI analysis is under ‘what’s new’ on

Growth stats

Overseas Trade (Imports)

While the dollar value of both imports and exports dropped during the Dec month, the continued demand for imports due to the current strength of the New Zealand dollar and a strong domestic economy resulted in a trade deficit of $299m. Imports for Dec were at $2,699m, down 10.2% over the month, but up 4.8% over the year. In comparison, the estimated value of exports was at $2,370m, which was down 3.9% over the month and 7.4% over the year. The deficit, at 12.6% of exports, is higher than normal for the Dec month, and merchandise deficits have now been recorded for each of the last six months. Over the Dec quarter the seasonally adjusted value of imports decreased 2.2%. Falls were recorded in intermediate goods (down 3.7%) and consumption goods (down 4.3%), while capital goods increased (machinery & plant goods and transport equipment up 2.4% and 46.6% respectively). While the trend series shows little change in the value of imports over the last four months, exports have been declining, resulting in a widening deficit and placing further pressure on the domestic economy.

What’s new on The Great NZ 7-Day Service Co. Revisited Manufacturing conditions eased in December ANZ-Business NZ PMI for December 2002 Supreme Court proposal raises serious questions Shaping future leaders

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