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ECA: Nine years of instability

Media Statement

15 May 2000

ECA: Nine years of instability

The Employment Contracts Act, which came into effect nine years ago today, has played a key part in New Zealand's poor international competitiveness, and increased rates of under-employment and joblessness through the 1990s, says Labour Minister Margaret Wilson.

"The ECA, along with the last Government's broader economic policy, has divided New Zealand into clasess of 'haves' and 'have-nots'. It has rent a chasm between workers and employers and has hindered New Zealand's ability to compete with other modern economies," says Ms Wilson.

"Under the ECA the number of jobless rose by 26 percent (175,900 in December 1990 to 222,200 in December 1999). The number of people in part-time work seeking more hours has trebled to 148,600 compared with 48,800 in December 1990.

"In a scale of international competitiveness produced by the International Institute of Management Development in Switzerland, New Zealand dropped from 11th place in 1996 to 21st this year.

"Increased casualisation of the workforce and trends towards more contracting out of work has left many workers in very uncertain employment.

"According to Reserve Bank estimates, New Zealand's annual growth in Labour productivity averaged a mere 0.36% between 1991 and 1999.

"All this is in contrast to the extravagant claims made by former Labour Minister Bill Birch when he introduced the ECA promising increased growth and prosperity and, later on, a more cohesive society.

"The ECA has been a calamity for many New Zealanders.

"No one should be surprised that thousands of submissions have poured into the office of the Employment Select Committee offices supporting the introduction of a more balanced and forward-looking regime under the Employment Relations Bill," says Ms Wilson.


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