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Maharey Address: Maximising Northland employment

Steve Maharey Address: Maximising employment in Northland

Comments at the Northland Region Employment and Skills Forum. Barge Park, Maunu.

Introduction

“A person who aims at nothing is sure to hit it."

It is an essential human truth that work is not merely the path to economic independence. It provides the opportunity to gain a sense of achievement. It offers self-worth and self-pride.

Work, then, is a noble target. Something well worth aiming for.

Kia ora ladies and gentlemen.

Providing people within the Northland Region with the opportunity to participate in the workforce is the path to long-term and sustained economic health. To achieve this takes action. Action focused on practical solutions. Action that addresses causes not symptoms.

Success will take commitment by us all. The government very much sees the need to continue building strong links with all the parties represented here if we are to answer the challenges this country faces.

And, thank you all for attending. (Acknowledge VIPs, kaumatua, employers, regional commissioner, MSD, DoL and TEC representatives.)

The drive for employment

In presenting the Employment Strategy in 2000, the government’s desire was to widen the doorway for more New Zealanders to the benefits of being part of the workforce. The Strategy introduced initiatives designed to create the conditions to maximise employment.

Strong economic growth has since seen unemployment reach an historic low, with increases in both the number of available jobs and the rate of labour force participation.

Other initiatives are helping to strengthen the effectiveness of the strategy.

The $131 million, ‘Making Work Pay’ package of initiatives offers incentives to help people move off welfare and into work. This package targets sole parents, long-term beneficiaries with dependent children, low income families already in the workforce and seasonal employment requirements. As its name suggests, the package aims to make getting into – and remaining in – employment a more viable option for people.

The establishment of the Tertiary Education Commission in 2003, to fund tertiary providers and oversee the Tertiary Education Strategy, is another significant initiative. Why? It’s quite clear that in this increasingly globalised world that growth can be best fostered by the development of a knowledge economy. The Commission’s task is to ensure that tertiary education and research better support strategic priorities such as developing the skills New Zealanders need for a knowledge society. The government has also reaffirmed its commitment to improve youth transitions from school to work. By 2007, we aim to have all 15-19 year olds engaged in appropriate education, training, work or other options, which will lead to their long-term economic independence and well-being. These initiatives are part of the government’s refinement of the strategy, this year, to place a greater focus on sustainable employment. We’re not interested in generating simply any job for job seekers. We want jobs that will build the economic independence of job seekers. And we want job seekers to have access to high quality jobs.

This government’s vision for the country is a prosperous, inclusive and environmentally sustainable society. A society characterised by opportunity for all. A society where, no matter your gender, your ethnicity or even where you live, you can make your own way.

Such a society must be fueled by economic growth and innovation. And New Zealand’s competitive advantage in the global economy in the future will be affected by our ability to encourage a wide range of people to participate in the workforce.

Some groups face significant barriers. The Employment Strategy recognises this and includes specific goals for Maori and Pacific peoples. Now, it also includes a specific goal to address the inclusion of youth, mature workers, women and people with disabilities.

Why we’re here today

This Employment and Skills Forum is one of series we are running throughout the country to progress the Strategy and tackle the new issues of the labour market.

A strong and growing economy has brought different challenges to the employment sector. The labour market forecasts from the first quarter of this calendar year have all pointed to the bite of labour shortages. And not just of skilled labour, but also of unskilled. Low unemployment across New Zealand is creating difficulties that we have not experienced for some time. Some firms are citing a lack of staff as constraining their potential for growth.

At the same time there is a pool of people looking for work who lack the appropriate entry-level skills for these industries.

Looking further out, there’s a need for government, community and industry to work together as the labour market shrinks with an ageing population, and as economic success boosts demand for skilled motivated workers.

While a challenge, these factors present us with a real opportunity to make further inroads in getting more New Zealanders who are currently outside the workforce into jobs.

New issues mean new remedies are the order of the day.

New remedies

We’re already on the path to developing new remedies to address the current and future challenges – earlier regional development plans set out the early steps. We now need to consolidate our efforts on that journey. And this is the purpose of today. It’s the platform for robust discussion and debate about what we – together – need to do; and about how government can help you move forward.

Firstly, information is power - we need to take stock of where we are. And quality information on the labour market is one area in which the government has invested to fuel regional growth activity.

So let’s take a look at the Northland region:

With an increase of 5.6 %, job growth over the year to March 2003 was strong. This is well above the national average of 2.4% and is the second highest growth rate recorded across all the country’s regions. The increase contrasts strongly with the fall of 1.4 % recorded over the same period in 2002.

This strong growth in employment has been fueled by a robust improvement in the regional economy over the past few years. The National Bank estimate that the Northland economy has grown by 4.7% in 2001 and 3.9% in 2002.

The regional economy experienced high growth in 2001 and the first half of 2002 as a result of an upturn in exports. This boosted agriculture and primary processing, two of the region’s largest economic drivers, with forestry also showing strong growth. Retailers, real estate and construction have all benefited from the spending of higher farm incomes. Population growth was moderately strong, up 0.7% in the year to June 2002 to 145,400. This compares to 0.1-0.4% growth over the previous three years. Statistics New Zealand predicts this growth will continue, projecting the region’s population to reach 157,000 by 2021.

The rate of Northland’s labour force participation rose sharply to average 61.9% over the year to March 2003, up from 60% in 2002. This is the highest rate recorded in the region since 1994. However, this remains well below the national average of 66.5% and is, in fact, the lowest across the country.

Northland historically has the country’s highest unemployment rate. While the job seekers register has reduced significantly over the last four years, at 8.7% for the year to March 2003, the official unemployment rate remains the worst in New Zealand. By comparison, the official unemployment rate nationally is 5.1% for the same period.

While construction has not risen as sharply as in other parts of the country, the number of new dwelling units authorised increased 13% in the year to March 2003. The rise nationwide was 33%. However, Northland’s increase was considerably stronger than in 2002 when dwelling consents fell by 7%.

Strong growth of 19% was recorded in house sales in the year to February 2003. Median house prices rose 4%, compared the national rise of 7%.

Though below the national average of 52.9%, at 41.3% to March 2003, the accommodation occupancy rate achieved a high for the region.

Cumulatively, this data paints a picture of a region that’s enjoyed reasonable growth over the last two to three years. This is encouraging for a region in which economic growth and opportunity has previously been limited. However, it also telegraphs the need for action as the conditions fueling that growth appear on the decline.

A region of two halves

For most New Zealanders, think of Northland and you think of white sand beaches, warm blue sea and towering kauri forests. Tourist-luring, picture postcard stuff.

And that’s all true. You live in an enviable natural environment and, understandably, tourism is an important part of the industry mix generating the region’s economic wellbeing.

The other main economic drivers for the region are pastoral farming, forestry and wood processing, marine construction and horticulture.

With the exception of a few large employers, Northland’s economy is dominated by small businesses.

According to the 2001 Census, the industries employing most Northland people are the primary sector, retail trade and manufacturing. Health and community services, education, property and business services and construction closely follow these.

The region’s predominant industries are, generally, seasonal in nature and this is a notable characteristic of the Northland labour market. The difficulties of such seasonally-driven industries are often exacerbated by Northland’s sub-tropical climate, as work is often of an ‘on-off’ nature due to frequent rain.

Certainly a closer look at the different areas making up the region reveals a picture of two halves…

Whangarei is Northland’s urban and administrative centre, and accordingly, is where government services and most of the region’s industries are based. The city’s main industries and therefore employment opportunities are boatbuilding, construction, wood processing, as well as farming in the areas around the city.

There are limited employment opportunities in the Dargaville and Kaipara area. This is a mainly rural area featuring kumara farming and Richmonds meat processing factory.

Employment opportunities are similarly limited in the Mid North – in Kaikohe and Kawakawa. This is a rural area experiencing poverty. The Work and Income client base comprises more than 80% Maori. One positive though, significant local employment opportunities are on the near horizon with the construction and establishment of the new prison at Ngawha.

By contrast, Kerikeri and the Bay of Islands is a prosperous area, very different in character from the rest of the Mid North. Home to the region’s tourism industry, this area offers good employment opportunities, even experiencing worker shortages in tourism and hospitality, and fruit growing.

Tourism is also a feature industry of Hokianga but that is its only similarity to Kerikeri and the Bay of Islands. Unlike its wealthy neighbour, Hokianga faces the challenge of rural poverty, isolation and limited employment. Its population is mainly Maori, many of whom are living in sub-standard housing on Maori land.

In the Far North the main employers are wood processor giant Juken Nissho Ltd and individual tourism operators. This area has a high Maori population and, like Hokianga, also grapples with the problem of sub-standard housing.

From wealth to poverty, the Northland region reflects extremes.

The outlook

Much of the region’s growing economic health over recent years can be directly attributed to the good returns experienced in farming and its support industries.

However, the agricultural sector has had some significant set backs recently. Drought has struck in many areas - even those normally considered ‘drought resistant’ - with no significant rainfall between mid-December 2002 and early April 2003.

Beef and sheep farmers have been able to minimise the impact by selling stock. Dairy farmers, though, have been forced to dry off stock early, which will constrain their income.

Farming in general remains vulnerable to factors such as a high New Zealand dollar.

And making a gloomy situation worse, Fonterra is predicting reduced milk solid payouts.

Tourism too, is expected to contribute to slowing economic growth as the impact of the Sars virus begins to bite on travel worldwide.

The Department of Labour’s Labour Market Policy Group reports that a slowing down in economic and labour market growth was evident for this year , even before the drought and Sars took effect.

Despite the expected slow down, economic growth is still likely to remain moderately positive. However, growth in Northland is expected to continue tracking under the national average.

Though slower, the forecast continued growth means that unemployment is unlikely to rise significantly, as the number of jobs will increase – just at a lower rate than the last two years.

Like other rural regions the expectation of a slowing of growth has been reflected in both a slowing of retail sales and a fall in consumer confidence. Interestingly though, Northland was one of only two regions in the country to record a rise in confidence in the March 2003 quarter.

Social development - the tension between demand and supply

In essence, long-term, sustained economic well being is the central goal of social development. The key to that development is the careful balancing act of the supply of skills to the demand for labour.

For New Zealand to thrive economically each region must attempt this balancing act according to their own unique circumstances.

So what is the demand situation in this region?

The most recent survey conducted by the Ministry’s work brokers points to a severe skill shortage in seven occupational categories: agriculture fruit picking accounting and finance computing and IT forestry vehicle service and repair drivers.

Information from the Ministry’s latest work brokers’ survey showed that the industries demonstrating the highest levels of optimism were hospitality, agriculture and horticulture, and administrative services.

The fruit growing industry has certainly made clear the difficulties they are currently experiencing in securing workers.

Looking ahead, there will be significant demand for skills generated by your region’s legendary ‘wall of wood’ - the massive timber plantations that will come on stream within the next five years.

The construction of the prison at Ngawha, also, will require skilled construction and trade workers.

And on the supply side? Generally speaking, the pool of available labour currently outside the workforce includes: 31% who have been unemployed less than six months 32% who have been unemployed for between six months and two years 22% between two and four years 15% for over four years.

Predominantly, qualifications do not feature – some 74% have no formal qualifications or less than three School Certificate passes.

A mere 10% have bursary or higher qualifications.

The highest proportion of Northland’s available labour – 39% - is aged between 25 and 39 years.

This is closely followed by those 40 years and over who make up 37%. Those who are aged 15 to 24 years make up the remaining 24%. Significantly, Maori, who are 30.5% of the Northland population, are over represented in the job seekers register. They comprise some 62%, with the higher proportions being youth and the long-term unemployed.

Many Northland employers say they would be prepared to take on unskilled people and train them, provided they have a good attitude and appearance, and a good work ethic.

However, employers across the board frequently cite problems of motivation, basic life skills, and literacy and numeracy amongst job seekers.

So, now we have a picture of what employers need and a picture of the available pool of labour and skills. The task before us is to find solutions to bridge the evident divide.

Solutions in action

The recognition of a need for a different solution was behind the establishment of the Ministry of Social Development nearly two years ago. The Ministry has been founded on the adoption of a different approach; an approach where we tackle the causes behind peoples’ problems rather than throw money at the symptoms.

Such an approach requires a focus on the long term. It means working in partnership with New Zealanders to help them find their potential as productive people in society. It requires providing help across a wider range of areas in peoples' lives.

In responding the Ministry has worked hard to gain a better understanding of the economic drivers in each region; to assess the opportunities and barriers. Its efforts in this area are encapsulated in the various regional economic development plans.

Plans are one thing. But it is people who mobilize them. The Ministry is also increasing its efforts to build genuine partnerships with other government agencies, community leaders and groups, industry and individuals. People who share a common vision and who are committed to working together to achieve it. And working together is the key.

Work and Income here in the Northland Region understands this. They know that we can only achieve sustainable employment through industry-driven, demand-led strategies. This requires improving connections with industry and employers. This requires putting employers in the driver’s seat.

A key component of the Northland Region strategy builds on the successful industry-based opportunities for job seekers, which provide employers with a workforce trained and educated to their specific needs.

Other programmes increase the marketability of clients to employers.

Let’s look at some of the specifics…

The fruit growing industry presents challenges and opportunities for the region. Growers have experienced difficulty in finding able or willing workers within the local environment and have sought to fill the gap with overseas workers.

On the worker side there have been claims of poor pay and working conditions.

In recognising the significance of this industry to the region, Work and Income has recently appointed a seasonal work co-ordinator to find solutions to the unique needs of growers. This co-ordinator reports to the Northland Fruit Growers Association and is working on developing a more strategic approach to seasonal employment and training.

As another significant regional employer, the forestry industry is also a focus for Work and Income. Work and Income took part in a scholarship scheme with the Kaipara District Council and Northland Polytechnic to provide a scholarship to meet the course fees for four successful forestry students.

The collaborative forestry-focused project Work and Income is undertaking with Ngati Hine Forestry, Northland Polytechnic and North Farm Labour is showing great results. It’s producing people who are not only work ready but are an attractive employment proposition.

In many ways, this collaboration offers a potential blueprint for similar regional initiatives targeting sustainable employment. These developing employment opportunities offer a real boost, especially to the region’s young people, who gain the chance to stay in their own communities and take up skilled jobs.

The establishment of the new Ngawha prison presents the Mid North with a considerable employment opportunity. Work and Income is working closely with the Tertiary Education Commission and Mainzeal, the contractor, to upskill locals to supply sufficient employees for the complex’s construction. Work and Income is also working with the Department of Corrections to provide staff for the prison when it’s commissioned.

Debbie Power, Northland’s Regional Commissioner, is currently the chair of the Northland Intersectoral Forum. This high level collaboration brings together the CEOs and regional managers of a wide range of organisations and promotes strong links between social and economic development in the region. Established in 2002, it is already sowing early seeds of alignment between agency service delivery models and business plans, all of which focus on addressing Northland’s complex issues.

Northland’s three Mayors are members of the Mayor’s Taskforce for Jobs, and each has funded a project aimed at reducing unemployment. In the Kaipara district, six long-term unemployed have helped create a riverside wharf at Dargaville, gaining valuable skills, motivation and work ethics.

In Whangarei, a team of four, also long-term unemployed, have created walking tracks and restored sand dunes as part of the district council‘s Whangarei Heads project.

In Kaitaia, over 50 Work and Income clients have taken part in Project Wheels, a multi-agency initiative aimed at reducing the number of young people driving unroadworthy cars and without licences. The police-supported project recognises the importance of transport as an essential factor in gaining and retaining employment in a remote rural area.

These are just some of the collaborative initiatives laying the foundation for genuinely sustainable employment in the region.

Partnerships beyond employment

But the Ministry’s focus in Northland is broader than solely generating employment opportunities. There are various reasons why people feel unable to participate in the workforce. To engage people in employment we need to address these too.

Despite its proximity to Auckland, Northland suffers from a severe lack of infrastructure. This is particularly so for roading, which is carrying increasing numbers of heavy and logging trucks. And with the latter, this will only increase as the processing of the wall of wood begins.

A percentage of Northland residents are without phone or email, and there is no public transport apart from a minibus service for Whangarei.

Then there are issues such as access to childcare.

All these factors can inhibit otherwise willing workers from gaining and holding down a job.

The region has a range of firmly embedded social issues and high social needs:

Northland has the country’s highest morbidity and mortality rates.

The number of people suffering mental health problems is significant.

Northland’s school children record low levels of educational achievement.

The lack of transport compounds rural isolation.

Well played out in the media, the region has considerable drug and alcohol issues.

Also well canvassed in the media, the region has a high proportion of sub-standard housing and poor infrastructural support.

Northland’s social problems are as complex as they are persistent. There are no quick fixes and solutions require an extensive multi-agency focus.

Northland’s government agencies and community groups have been working together to tackle these issues. Work and Income has been active in inter-agency collaboration before agencies were mandated to do so, as it recognised early on that partnership was the only way forward.

However, now, this activity is enshrined in Social Development in Northland, a strategy addressing the region’s complex social issues.

The strategy is centred on the tenet that sustainable social wellbeing does not occur without economic growth. It set outs the practical steps we all need to be involved with to take the region forward.

These include new initiatives identified by Northland groups that require a cross-sectoral approach as well as existing initiatives to which cross-sectoral co-operation would add value.

The government has high expectations of this strategy and I encourage you to get hold of copy – there is a supply available here today.

One area the strategy focuses on is that of the region’s standard of housing. Sub-standard housing, with all its associated factors, especially health and fire safety, is a major issue in Northland.

In addition to Housing New Zealand Corporation’s substandard housing initiative, Social Development in Northland will see government agencies concentrate, firstly, on three district-specific collaborative initiatives: Kaipara District Community Development Whangarei based Community Project Whangaroa Community Development Plan.

As part of its role as a leader of social development, the Ministry is already closely involved in a number of housing-related initiatives.

These range from a Fire Service-led project to install free smoke alarms in at-risk homes to the secondment of two case managers to work as housing support co-ordinators. These co-ordinators assess overall household needs and make the appropriate referrals.

And, working in concert with industry, another initiative involves unemployed clients upgrading relocatable housing units. This excellent initiative provides two spin offs – that of upgrading the standard of housing while upskilling the unemployed so they are able to move into related employment.

Again, the common thread running through all these initiatives is that success depends on the involvement and co-operation of all parts of the community.

Helping the momentum

To help build the momentum in forging stronger links with the community at large the government has developed particular tools that can be used to work alongside other initiatives. One tool - specifically available to employers and others such as training providers - is the Skills Action Plan.

In a nutshell, the Skills Action Plan aims to reduce skill and labour shortages, now and in the future, especially in the regions. The plan incorporates a range of initiatives: industry and regional initiatives education and training initiatives information matching initiatives immigration initiatives.

The plan recognises that no one response will meet all needs.

Time to move forward

As I said in my opening, providing people within the Northland Region with the opportunity to participate in the workforce is the path to long term and sustained economic health.

The principal reason why we are all here today is to build on the journey already begun; to take knowledge that we gain and apply it.

Our success will depend on the strength of our partnership and our commitment to realising the vision for an enduring, strong economy for the region.

Today we need to identify further what we think needs to be done.

And today we need to identify and commit to what we’re going to do.

It’s time that we gave everyone in the Northland region the opportunity to enjoy the reward of participating in the workforce.

It’s time we gave them something more concrete to aim at.

Release of WORKINSIGHT

I have great pleasure now releasing the second issue of WORKINSIGHT, the Department of Labour’s six-monthly skills and work report. This edition of WORKINSIGHT emphasises the crucial need to ensure all young people are in education, training or a job.

It’s especially appropriate that I am able to show the first copies at this forum because Northland has made such a significant contribution to the central theme of this second issue.

The central theme is about the pathways that lead out of compulsory schooling.

Our young people are facing life-changing decisions about whether to stay in school, study and train elsewhere, or begin their working lives. And the better informed they are about these choices the better chance they have of making good decisions.

While most young people are upskilling either through education or in their jobs, a number are still at risk. Particularly those that leave the education system with no qualifications, and have difficulty getting a job.

It’s encouraging to hear about the dedicated people working to help these young people make the transition through education training and into work. I very much enjoyed reading the opening story in this edition of WORKINSIGHT entitled Moving on Up. It is a story of a Northland youth transition scheme that’s been successfully helping your at-risk teenagers.

It’s an excellent example of how collaboration between support agencies can make a real difference and I applaud the staff at Whangarei Career Centre and others that have been involved with Moving on Up.

Copies of WORKINSIGHT will be handed out to you today, and over twelve thousand copies of the publication will be distributed across New Zealand over the coming week. It is designed for career advisors and others whose role involves providing advice about education, training and jobs. But it will be of interest to anyone wishing to keep up to date with the latest trends and developments in the job market.

So in closing I wish you well in your endeavours and I applaud your successes.

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