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Brash tax reduction hint disappointing

Brash hint disappointing......More Government newspeak......Business Update attached

BRASH HINT DISAPPOINTING Don Brash's statement this morning that a National government would immediately lower the company tax rate to 30 per cent, to match Australia's, is a step in the right direction, but would not give NZ any competitive advantage - our rate should be several point below Australia's to attract investment to this side of the Tasman.

HIGH COST TO 'PROTECT' EMPLOYEES ILO expert Alan Wild is in NZ taking workshops to prepare employers for new 'contracting out' rules in the Employment Relations Law Reform Bill - employees involved in food or cleaning will have to be 'protected' if their employer sells or contracts out the business. Wild says similar rules in Europe have meant more companies closing rather than being restructured, and excessive litigation to address competing claims by employers and employees involved in transfer of business situations. "Employment protection is a well-meaning policy, but in practice it harms businesses, making the cure worse than the disease," he told Auckland audiences on Monday. To attend workshops in Wellington, PN, Christchurch or Dunedin this week, contact EMA Central, Canterbury Employers' Chamber of Commerce or Otago-Southland Employers' Association.

LAWYER TIM CLEARY JOINS BUSINESS NZ Employment lawyer Tim Cleary has been appointed Principal Adviser Business NZ. He was most recently Counsel for the Meat Industry Association and in private practice. "I am delighted we will gain the benefits of Mr Cleary's standing in the employment law area, his knowledge and contacts in the Wellington scene and advocacy strengths," CEO Simon Carlaw said.

INDUSTRY TRAINING STRATEGY WORKING The record high number of employers and employees participating in industry training shows the strategy is working. With 30,000 employers and 127,000 employees now taking part in some form of formal industry training, a good platform of skills is being created to aid future economic growth. Contact .

SURVEY SHOWS FEAR OF EMPLOYMENT BILL Central region employers have big concerns about the Employment Relations Law Reform Bill. A survey of 365 EMA Central members shows their main worries are: * Having to conclude a collective agreement even if parties disagree strongly) - 68% negative rating * Restrictions on passing on terms and conditions (not being allowed to pay non-union staff as much as union staff) - 80% negative rating * Compulsory arbitration (the Employment Relations Authority gets the power to impose settlements) - 80% negative rating * The new test for dismissals (an employer will have to 'balance the interests' of the employer and employee concerned - what on earth does that mean?) - 86% negative rating Contact: .

NEWSPEAK IN EMPLOYMENT BILL The concept being used to impose all these growth-sapping policies in the employment bill is "good faith". In the bill, anything that might stand in the way of collective agreements is termed "a breach of good faith" (and brings a fine up to $10,000). So "good faith" gets a new meaning - it now means "good for collective agreements"! Contact .

SO MUCH FOR REAL GOOD FAITH Meanwhile, while the bill's still in select committee, the engineers' union EPMU has instructed its negotiators around the country to refuse any settlement offers below 3.5%. The union obviously intends to override any views that a workforce might have. Negotiating in good faith...?

MORE GOVERNMENT NEWSPEAK Customs Minister Rick Barker also seems keen to change the definition of "public good". He plans to make carriers, exporters and importers pay the annual $20m bill for anti-terrorist security on behalf of all NZers. Since security is a public good, shouldn't this cost be footed by all taxpayers? asked National Radio last week. "Oh no, that's not a public good, it's a New Zealand good," the Minister replied. Sadly, National Radio failed to ask what the difference was. The Border Security Bill now looks set to gouge millions of dollars out of the trading sector and further erode NZ's international competitiveness. Contact .

EASY COME EASY GO Not quite in the same league as Newspeak, but a partial truth perhaps.... Small Business Minister John Tamihere has been delivering a series of promotional speeches at Government-sponsored "small business events" where he defends the NZ business regulatory regime by saying NZ is one of the easiest places in the world to start a business. Well yes, but high taxes, high compliance costs and rigid employment laws also make it hard to grow a business.... Contact .


LARGEST JANUARY DEFICIT SINCE 1986 * The provisional value of exports for January was $2,041m, virtually unchanged (+0.1%) from Jan 2003. * The provisional value for imports was $2,591m, giving a deficit of $550m (the early estimate was $571m). This is the largest deficit for a January month since 1986. * The highest value of exports was recorded by frozen beef, live animals (in particular racehorses), cheddar cheese and still white wine. There was a fall in export values for exported crude oil, scoured wool, sheep & lambskins and fish, crustaceans & molluscs. * The trade deficit for the year to Jan 2004 was $3,616m or 12.7% of exports. * The value of exports in the year to Jan 2004 was 7.9% less than for the year to Jan 2003.

WHOLESALE TRADE SALES UP * Seasonally adjusted sales increased 3.7% from the Sept quarter to stand at $17,342m for the Dec 2003 quarter, following an increase of 0.5% from the June to Sept 2003 quarters. * Seasonally adjusted wholesale stocks also rose by 1.7%, following a 0.6% fall during the Sept 2003 quarter.

BIG JUMP IN RETAIL TRADE Seasonally adjusted total retail sales leapt higher than predicted in January - sales increased 2.9% from Dec 2003 to Jan 2004 (10 times larger than market expectations). * For the core-retailing group (excluding motor vehicle services & retailing), seasonally adjusted sales rose 1.9% over the month. * Eighteen of the 24 storetypes had an increase in January, led by automotive fuel (+$32m) and motor vehicles (+$25m). The largest fall was for accommodation (-$12m). * Auckland retail sales increased 0.9% in January; Wellington (-1.1%) and Waikato (-0.8%) continued to fall. Total North Island sales were up 0.5% and total South Island sales were up 0.3%.

MORE ELECTRICITY GENERATION IN DEC QUARTER * Total electricity generation for the Dec 2003 quarter was 9,107 gigawatt hours, a fall of 0.4% from Dec 2002, but still the second highest recorded level of electricity generation in a Dec quarter since the series began in 1959. * Output of hydro electricity generated (as a % of total electricity) grew from 71% to 72% when comparing Dec 2003 and 2002 quarters. * Over the past ten years, the Dec mean contribution by hydro generation has been 74%. The lowest proportional volume of hydro generation to total generation in a Dec quarter was in 2001 (65%), the year of the winter electricity crisis. * Commercial electricity prices increased 2.4% over the Dec quarter and 6.1% in comparison with Dec 2002. Prices for household electricity increased 3.8% over the quarter and 9.3% in comparison with the Dec 2002 quarter. For petrol, retail prices fell 2.1% over the Dec quarter, but were up 0.7% from the Dec 2002 quarter.


* Celebrating business - General Cable NZ Ltd

* Submission on proposed CEP with Thailand

* Business NZ appointment

* Submission on Employment Relations Law Reform Bill

* Quick Guide to the Employment Relations Law Reform Bill

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