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Big Business Misses the Big Picture

MEDIA RELEASE
25 March 2004

Big Business Misses the Big Picture

The main message from the New Zealand Herald’s special report for business is that big business is missing the big picture, Council of Trade Unions president Ross Wilson said today.

The paper’s “Mood of the Boardroom” supplement, which reports on the results of a survey of a group of employers, was published today.

“Some of those surveyed have missed the big picture which is that key economic issues are about infrastructure, investment in skill and improving productivity,” Ross Wilson said.

“The deficits in these areas accumulated in the 1990s, along with a massive social deficit, from an economic direction that promised the benefits of growth would be shared but did not deliver.

“It is one-eyed of big businesses to applaud everything the Government does for them and attack everything the Government does for low-income workers, such as better workplace health and safety and improved holidays.”

Don Brash is supporting the employers, and workers knew that if he ever got the chance, he would finish off what Roger Douglas, Ruth Richardson and Bill Birch started, Ross Wilson said.
“I am amazed that Don Brash uses a comparison with Australia to bolster his case for deregulation and tax cuts – Australia has more market regulation and higher taxes.”

The top tax rate in Australia is 48.5 per cent compared with 39 per cent here. The company tax rate is 30 per cent in Australia but they also have a payroll tax of 6 per cent.

Australian workers have a minimum wage of $11.80 ($NZ13.49), their average wage is 26 per cent higher than here, over 80 per cent of Australian workers are protected by multi-employer agreements, they have had four weeks annual leave for 30 years, and their growth and productivity usually outperforms New Zealand.

“In Australia there is evidence of a higher level of investment,” Ross Wilson said. “Even the International Monetary Fund has noted that New Zealand had low growth in physical capital per worker in the early and middle 1990s and that appears to be a very significant part of the explanation for low productivity.

“We know also that NZ listed firms pay out over 70 per cent of profits as dividends. In other words, a major contribution would be made to productivity if New Zealand firms invested more of their profits in sustainable economic growth rather than pay out so much out to shareholders wanting a quick return.

Employers surveyed in the Herald also attacked the Employment Relations Law Reform Bill as being bad for business.

“The changes to employment law are modest improvements to a moderate law,” Ross Wilson said. “The New Zealand Herald is owned by big business and is colluding with its business mates to try to spook the Government into a back down on employment law.”

ENDS

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