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High productivity starts at the top

Labour Issues Spokesperson

19 December 2013 MEDIA STATEMENT

High productivity starts at the top

A report showing labour productivity levels in New Zealand are a third lower than in Australia highlights a need for better top level management, Labour’s spokesperson on Labour Issues Andrew Little says.

The Productivity Commission's report looked at 24 comparable industries and found that in most Australia generated more value for each worker because they had better plant and equipment, including computer technology, and were more highly skilled than their New Zealand counterparts. One exception was New Zealand's food processing sector.

"None of this is a surprise and the reality is our employment laws encourage low value management conduct rather than higher value conduct, such as investment in better technology and upskilling our workforce.

"We have continued to concentrate our economic effort in lower value activities.

"One exception noted by the report is in the processing end of the dairy sector which can be explained by the fact that Fonterra has invested in state-of-the-art processing technology and operates it under a modern management regime that gets the best out of its workforce who see the benefits in above-average incomes.

"That example aside, after 20 years of one of the most deregulated labour markets in the world and when management has had almost complete control of workforce issues in this country productivity is worse now than it was in the ‘70s.

"The future lies in both better investment and better personnel management, yet our employment laws incentivise New Zealand managers and business owners to do the opposite.

"The response, on average, by New Zealand managers to laws that have given management virtually an absolute power to manage is to contract out, casualise, de-skill and generally disaggregate the workforce with greater use of labour hire agencies, all the while reducing the quality of output and driving down wages.

"Labour is committed to workplace laws that encourage investment and high quality labour utilisation, including investment in constant upskilling, as the way to lift productivity and incomes for workers.”


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