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Businesses Disagree With Holidays Bills

Business Update

Businesses Disagree With Holidays Bills

A select committee is now examining submissions on two ‘Holidays’ Bills. Regional business organisations report strong member reaction against both Bills. The private member’s amendment Bill that would give everyone four weeks’ holiday is seen as an unnecessary increase in costs for all businesses. Providing enhanced leave entitlements to every employee, regardless of length of service, skills, qualifications and attributes, means that it is less likely that employers will employ new entrants to the workforce, particularly the young and migrants, notes EMA Northern.

EMA Central says the Bill is inconsistent with the Government's goal of increased economic growth, and is unsupported by any economic analysis. The other Bill - the Government’s Holidays Bill - which purports to streamline holidays administration, fails to do so, says Business NZ. Ideally, the legislation should state clear principles only, because its function is to set out minimum statutory requirements that underpin freely negotiated employment agreements entered into between consenting adults – but the Bill is overly prescriptive with a one-size-fits-all approach that will increase compliance costs for all businesses, especially small ones. Contact bburton@businessnz.org.nz.

RMA FAST-TRACKING? The Government may be looking at changing the RMA to fast-track big infrastructure projects (e.g. electricity generation plants). Prompted by the Cullen-led infrastructure committee, the Ministry for the Environment is investigating processes for the environmental assessment of major and/or complex projects under the RMA. Environment Minister Marian Hobbs: "Unlike earlier proposals, the processes we are considering would ensure the project was decided upon in months rather than years by providing a focused Government position and increased assistance for local decision makers." While the Ministry’s report is due this month, it should be noted that policy input to date has not, to our knowledge, been sought from investment or business quarters, those with most knowledge of the RMA’s current shortcomings. Contact pwhitehouse@businessnz.org.nz.

DIFFICULTIES OF REFORM Structural reform is still needed, this week’s G8 Economic Summit in Europe was told. A report by the Business & Industry Advisory Committee to the OECD said growth was declining in many countries because of ‘classic’ policy defects – rigid labour systems, protectionist trade policies and unnecessarily high taxes and social security contributions. The difficulty of fixing those issues was highlighted as protests simultaneously washed across Europe – French and Austrian workers went on strike over plans to reduce pension benefits, East German industrial workers walked off the job to make their case for a 35-hour week, and thousands of protesters clashed with police in Switzerland over globalisation and free trade. See www.biac.org.

‘STRESS’ CASES RISING ‘Stress’ is flavour of the month, say many employers attending EMA Northern’s ‘New Kiwi Workplace’ conference this week. Conference participants reported rising numbers of employees claiming stress when faced with disciplinary proceedings or as part of personal grievance claims. Business NZ says it’s important to remember that an employer is liable under the Health & Safety in Employment Act ONLY if: the stress is work-related the employer knows or should reasonably know about it it results in a medically diagnosable condition. Work-related stress alone is not grounds for action against an employer - it would be necessary for that stress to have caused some medically diagnosable condition (e.g. heart disease etc). Contact bburton@businessnz.org.nz.

MARKET FOR EXCESS ELECTRICITY As the threat of power shortages continues, the idea of a market for excess electricity is gaining ground. Funding to set up exchange mechanisms so that excess electricity that can be sold back to the grid was one of the progressive elements of Energy Minister Pete Hodgson’s recent electricity package. In Britain a new combined heat and power (CHP) boiler is being developed that would specifically allow householders to sell excess electricity back to the grid. British Gas say the output of one million of the high-efficiency boilers would be equivalent to the output of a mid-sized nuclear power plant. They will be available commercially in late 2004. Contact pwhitehouse@businessnz.org.nz.

FURNITURE GETS DESIGN AUDIT The Government’s recently announced support for the Design Taskforce includes $18m funding for ‘design initiatives’ over five years. (The Taskforce quotes the World Economic Forum's Global Competitiveness Report, which identifies the most competitively successful nations as Finland, US, Netherlands, Germany, Switzerland and Denmark - all of which feature "government initiatives and funding in reference to design".) Furniture is one of the NZ manufacturing industries that fall under the ‘creative industries’ banner - currently 10 furniture companies are involved in a design audit pilot project funded jointly by the companies, Industry NZ and UNITEC. The aim of the project is to look at the companies’ business plans and their current performance, and identify how the organisation can improve performance and growth through improved design capability. Contact mdunnett@businessnz.org.nz.

GROWTH STATS

WHOLESALE TRADE Seasonally adjusted sales strengthened further from the 0.8% over the Dec quarter to rise 1.2% over the March 2003 quarter. Eight out of 16 store types had increases in sales during the March quarter, with the largest increases being for wholesale trade not elsewhere classified (+$174m), and motor vehicle wholesaling (+$147m). Of those store types to experience a fall, farm & construction machinery, professional & business equipment decreased by $122m, followed by unprocessed primary products (-$95m). The value of seasonally adjusted finished stocks for the March quarter stood at $7,578m, which was $135m (1.8%) higher than the Dec quarter. Raw material stocks were also higher by $6m (up 0.7%) from Dec to stand at $442m. Trade stats courtesy www.stats.govt.nz.

ENERGY STATS Total electricity generation fell 3.7% from the Dec 2002 to March 2003 quarter. However, ever-increasing demand for electricity over the long term meant generation was 1.7% higher than in March 2002. Since the series began in 1959, total generation for each March quarter has been higher than in the previous March quarter in all but six years. Breaking electricity down into the two main generation types, hydro generation was down 2.2% over the year, while thermal generation increased 9.7%. Hydro generation is still the main source of electricity generation, but its proportion of total generation continues to trend downwards. Over the last decade its average contribution was 72% of total generation, while the last five years has seen this percentage decrease to just under 70%. Latest results show that hydro generation made up 65% of total electricity generated.

There were continued mixed results in terms of the types of commodities used for energy purposes over the year. The volume of domestic crude petroleum rose 1%, although it remains 39.9% lower than its peak in March 1994. Production of gas, the leading source of thermal energy for electricity generation, fell by 5.3%, although the drop-off in gas production comes after four consecutive March year increases, where the March 2002 year resulted in the highest production of gas recorded. Production of refined petrol increased 1.6%, while diesel production rose even further by 6.8%, continuing the trend (since the year ended March 1995) of the volume of diesel exceeding the volume of petrol produced. Commercial users experienced a price decrease of 0.2% from the Dec quarter, following a 0.7% increase from the Sept to Dec quarters. Over the March year, commercial prices were 1.4% lower. The June quarter statistics are likely to show the impact of the recent energy shortages. Energy stats courtesy http:// http://www.stats.govt.nz.

COMMODITY PRICES The continuing strength of the NZ$, particularly against the US$, has again strongly affected commodity prices.

While the ANZ world commodity price index recorded a 0.5% rise during May (following a 1.1% fall in April), there was a 3% fall when results were converted to NZ dollars. Although there was some weakening against the Euro and Australian dollar between April and May, the modest appreciation against the Japanese Yen and British pound, along with the continued strong gains against the US$ tipped the scales in favour of a decline in the NZ dollar index.

The rise in the world commodity price index during May was helped by higher early season prices for apples, along with increases in wool, lamb, skins and aluminium, leaving the index 6.2% higher than in May 2002. In contrast the NZ dollar commodity price index was 12.4% lower on the same time last year. ANZ noted that while world prices for New Zealand’s export commodities had held up remarkably well in an uncertain global environment, the stronger NZ$ meant negative returns for most commodities. The only exceptions were apples, kiwifruit, pulp and diary products. Continued NZ$ gains, along with mixed climate conditions, are forecast to lead to a reduction in spending and contribute to a slowdown in economic growth over 2003. Commodity stats courtesy http:// http://www.anz.com.

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