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Business NZ Update

Business NZ Update

Transport Bill Denies Private Involvement

The Land Transport Management Bill purports to allow private sector funding for new roads, but in fact it would prevent that happening, EMA Northern told the transport select committee yesterday. The Bill acknowledges the need for private funding to fix Auckland's roading but it won't allow private investors a reasonable rate of return, EMA said. Under the Bill the Minister will have the power to decide if a project can be developed under a private/public partnership, then once a project's plans are drawn up, he can reject it. No sensible investor would take part in such an arrangement. The Bill also denies private investors the opportunity to develop the sort of ‘build, own, operate, transfer’ (BOOT) projects that have been successful in Australia. Contact mailto:

WILDCAT STRIKES OK, SAYS EMPLOYMENT COURT An interesting lesson about ‘good faith’ was delivered by the Employment Court recently, in University of Otago v Association of University Staff. The university asked for a declaration on the union’s behaviour during recent wildcat strikes - the union wouldn’t tell the university when or where the strike action would be held, and the university thought that breached the good faith requirements of the ERA. But the Employment Court said such notification was only required in essential industries, and that ‘good faith’ doesn’t apply in a strike situation. This will be of interest to employers who would find it hard to manage a business during wildcat strike action, and who would have assumed ‘good faith’ implies communication and common courtesy. Contact: mailto:

HOLD FIRE ON MARINE RESERVES The Marine Reserve Bill should be delayed until major ‘unknowns’ can be sorted out, Business NZ says. In select committee yesterday Simon Carlaw said the Bill contained no economic analysis and questionable evidence on any environmental benefit in extending marine reserves out to the 200-mile exclusive economic zone. He said a legal opinion by international diplomat-lawyer Colin Keating indicated the Bill was probably inconsistent with international law. Contact mailto:

‘UNJUSTIFIED DISMISSAL’ RORTS This year the ERA is being reviewed. Watch out for a bid by the union movement to get higher payouts for unjustified dismissals. This would be totally unacceptable to most small businesses. Neville Waldron of the Restaurant Association says in NBR today: “From firsthand experience I can relate that I have acted for industry members in hundreds of personal grievances where it is alleged the employee had wrongfully and unjustifiably been dismissed. So often a decision is handed down which says something like “you were justified in dismissing the employee but you got the procedure wrong.”

TRUE LIFE STORY This week one of our members sent the story of the sub-standard sales rep: “He presented a very professional CV and I employed him on the basis that what he stated as true was good enough for me. BIG MISTAKE. He basically was illiterate, and had been a 'gofer' for his wife who was the driving force and organised and managed his life. He could talk fine but basically could not string a written sentence together. He said he was 'computer literate' but it took 17 days for him to figure out how to send an email. He stated he was in 'excellent health' but was a chronic long time back pain sufferer. He had dreadful short-term memory and could not write down orders, remember what you told him, relay messages, or communicate with customers. So after 4 months of telling / writing him he was not up to standard, I had a meeting and dismissed him, giving him one month’s paid salary in advance. Then I get contacted by a lawyer, regarding his personal grievance claim, wanting $20,000 for a 'quick settlement', or more if contested. We went to mediation and his lawyer accepted all our claims regarding 'substantive performance issues'. His whole case was that I did not follow due 'procedural' process at the meeting when I dismissed him, and was therefore liable. We paid $10,000 to settle and the biggest laugh is that they stipulated 'confidentiality' over the outcome. So I look at the positives and $10,000 to get rid of him was cheap, but it irks me that a 'liar' can put one across me on a 'procedural' technicality.” Sound familiar? Business NZ would like to hear your ‘unjustified dismissal’ story. Heard of any lawyers acting on a contingency fee basis? Contact: mailto:

GATS PORKIES A number of pressure groups seem to be raising phantom fears over GATS (the General Agreement on Trade in Services). GATS lets NZers sell their services in

many more parts of the world. NZ already makes millions every year from international education services and stands to make even more with further progress under GATS. But pressure groups are making spurious claims about what an enhanced GATS would do. It’s been claimed that GATS would place an obligation on the NZ government to allocate funding to foreign education providers. This is completely false. The government would be totally free to decide how it spent public money on education, as now. NZ has stood up fearlessly for free trade in goods. It would be inconsistent to now run away from free trade in services, and a great waste, since GATS has the potential to substantially increase NZ’s prosperity. Contact mailto:

NEED YOUR CELLPHONE WHILE DRIVING? The Land Transport Safety Authority has released a Draft Rule for public comment and one of the issues raised is the use of cell phones in vehicles. Currently the Rule allows the use of cell phones when driving, but this could change in response to submissions received. The LTSA has received submissions from individuals concerned about cell phone use while driving, but so far few submissions have been received by business people. The LTSA wants to hear from small businesses in particular – e.g. tradespeople and salespeople may find cell phones critical for their jobs and to ban their use in vehicles could seriously impact upon their livelihood. If you have a view, please let the LTSA know before submissions close, on 18 March or ask to make a late submission. Contact: Alison Draine: mailto:


COMMODITY PRICES For the fourth consecutive month, a strong NZ dollar eroded increased commodity prices when expressed in NZ dollar terms. The ANZ world commodity price index increased 0.9% over Feb, its seventh consecutive rise, taking levels 4.5% above those recorded a year earlier. However, the world price still remains 6.6% below its peak in May 2001. Despite the continued increase in world prices, the further strength of the Kiwi meant the NZ$ index fell 1.5% during the Feb 2003 month, to be down 17.9% from a year ago and 28% down on its peak in April 2001. ANZ noted that since July 2002 world dairy prices had turned around from 15-year lows and this had sparked world commodity price increases, although a broad range of commodities has balanced out any sharp movements in diary prices on the overall index. The key issue is till the impact of the stronger NZ$ on export returns, which have been negative for 5 of the past 6 months.

ANZ JOB ADS Job ads in Feb returned to similar levels as a year ago. For the Feb year, Auckland had a 6.6% rise but all other regions declined (Waikato –9.2%, Wellington -6.8%, Hawkes Bay –5.6%, Manawatu -5.5%, Christchurch -5.4% and Otago -4.4%). Job ads over the Internet rose 7.7% in during the Feb 2003 year, in contrast to a 24% drop for the February 2002 year.

OVERSEAS TRADE The merchandise export and import price indexes both fell between the June 2002 and Dec 2002 quarter, by 5.3% and 2.6% respectively. This meant the merchandise terms of trade index fell 2.8%, following a 1.8% fall in the Sept quarter. The appreciation of the NZ$, along with price falls in dairy, meat and chemicals were mostly responsible for the drop in export prices. In comparison, wool prices increased 10.3%, with higher prices recorded for all the main wool categories during the Dec quarter. For imports, the price fall was mostly determined by electrical machinery & apparatus, and mechanical machinery, though these were offset by rising prices for petroleum & petroleum products, along with cereals and sugar. The terms of trade index is now 7.8% lower than the same period last year. The merchandise export volume index increased 2.2% during the Dec quarter, compared with a 0.1% increase during the previous quarter. All sub-indexes rose, especially wool, fish & fish preparations and dairy products. The merchandise import volume index also increased by 2.9%, with import volumes showing continuous growth for the past 5 quarters.

RETAIL TRADE Seasonally adjusted total retail sales for Jan were up 1.1% on Dec, indicating domestic demand has continued to prop up the economy in early 2003. But the growth is uneven with the core retailing group increasing by only 0.2%, and only 8 of the 15 storetypes recording higher sales than in Dec. Of these 8, the largest increases were for department stores (+9.9%) and footwear (+5.0%). The largest decline was in appliance retailing (-5.8%). There were increased sales in all regions except for Waikato (- 0.6%), with Wellington sales increasing most (+2.0%).

WHAT’S NEW on http://

Scaremongering over GATS

Credit recognition scheme gives competitive advantage

Compulsory unionism – no way

The big difference between Australia and NZ

ANZ-Business NZ PMI for January 2003

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