Shipley Speech - 'Jobs'
RT HON JENNY SHIPLEY
PRIME MINISTER
Luncheon address
to
ASB AND WELLINGTON REGIONAL
CHAMBER OF
COMMERCE
"JOBS"
St James Theatre, Wellington
12 noon,
Thursday 28 October 1999
Acknowledgments, etc.
Jobs are
central to our sense of well being. They contribute to our
sense of self worth and they provide the means to a better
life.
Not having a job is extremely debilitating. The
pressure is even worse for those with children. The
personal hardship faced by the unemployed is easily
forgotten when we discuss job figures.
But it is these
same stories that drive the National Party to do everything
possible to promote more jobs. It is these same stories
that lead National to unashamedly champion the job
creators.
We acknowledge the contribution of those in
business, who have taken the risks and created jobs for
nearly 300,000 New Zealanders since the early 1990s.
You
have helped hundreds of thousands of families to earn a
living, to pay their bills and put food on their table, and
to live a full life. That's what job creation is about.
And I commend the business owners for their commitment and
their contribution.
While businesses create jobs, the
National Party believes the Government must create the right
conditions for growth.
That means implementing sensible
economic policies to create low inflation, low interest
rates, lower taxes, and lower business costs.
The recent
PREFU shows that if we continue with our policies, business
should be able to create another 115,000 jobs over the next
three years, bringing unemployment under 6 per cent. That
means fewer stories of hardship for New Zealand
families.
The point to remember is this:
It is
businesses that create jobs, NOT governments.
Some
attempts by Government to create jobs actually cost
businesses more.
Fancy job schemes must be paid for
through taxes and debt which destroys jobs as fast as they
are artificially created.
The Government can and does
influence three key areas in terms of jobs:
1. the cost of
employing people;
2. the skills of job seekers; and
3.
the rules that govern employee and employer relations.
1.
The cost of employing people
The Fiscal Responsibility
Act and the PREFU now make the consequences of higher
spending much more obvious.
We know that higher business
costs mean low or even negative job growth. We know that
higher taxes and higher costs inhibit growth. And we know
that many of Labour's policies rely on these factors to pay
for their promises.
Labour has an 'A' list of policies
(that they plan to introduce and fund) and a 'B' list of
policies (that they say they’ll introduce, but not
fund).
Labour has gone to the limit of affordability on
its promises in list 'A'.
The party is in sufficient
trouble with their costings that they won’t be able to put
money into their much trumpeted superannuation fund in the
next term of government.
Labour is silent on how they
will fund list 'B' because they have no room to move. It’s
no surprise they are looking at a third option – list ‘C’ -
policies that Labour, Alliance and the Greens will be
billing businesses directly for. They include:
Increasing personal taxes by $800 million a year. Not only
will skilled graduates leave New Zealand, but the cost of
employing the people who remain will increase.
Reversing ACC changes, costing $200 million a
year.
Removing the Employment Contracts Act and
increasing the role of unions and multi-employer
negotiations, costing $200 million a year. Work stoppages
for the June quarter are at the lowest level for a decade.
Before the ECA they cost $50 million in lost wages.
Production losses could be twice that amount, and the cost
of disruption to business from other people’s strikes could
double that again.
Introducing paid parental
leave, costing employers' $100 million a year
(Alliance).
Four weeks' annual leave, costing
employers $400 million a year (Alliance).
Increasing the minimum wage by $20 a week, costing employers
$60 million a year, and costing young people 3,000
jobs.
These imposts are taxes in all but name. They are
a tax on jobs.
But this is not the worst of it. Labour,
the Alliance and the Greens seem to have forgotten the
simple fact that higher costs mean fewer jobs.
The list
of Labour and Alliance promises will put up the cost of
employing people by nearly 3 per cent. This might not sound
like much, but it could result in 20,000 fewer jobs, or a 1
per cent increase in unemployment.
This is more than the
whole work force of Nelson needlessly losing their jobs over
the term of the next Government.
Remember that behind
these figures are people, many of whom are young Maori,
whose self-esteem and sense of participation in our society
will suffer as a consequence.
A National led government
will continue to seek ways to reduce the cost of jobs and
reduce unemployment. Not by cutting wages and salaries, but
by reducing wasted effort and finding smarter ways to reach
our goals.
2. The skills of job seekers
When people
are unemployed the costs are high. The unemployed need our
support, but at the same time National believes they have an
obligation to society in return for that support.
Over
the last two years we have bought the Employment Service and
Income Support together to create WINZ, which has proven
very successful at helping people off the benefit and into
work.
We have introduced the community wage, and created
obligations on the unemployed to undertake community work,
if their circumstances allow.
All of this has been done
in an effort to keep those who are looking for work in touch
with the labour force - to help them get the skills required
to win and keep a job.
Not only have the unemployed
benefited from these policies, but so has the community
through help with community projects.
Labour has lower
expectations of people out of work and doesn't believe in
community work programmes.
I predict that Labour will
actually move towards adopting our community work scheme by
the next election as they have with most of our welfare
reforms.
I also predict Labour will eventually have to
adopt our "Bright Future" initiative because it is a
commonsense approach to building better links between the
business and education sectors, and is seeing our tertiary
education system teaching people the skills they will need
for the labour market of tomorrow.
A good example is the
Enterprise Scholarships in which Government contributes $20
million a year to jointly fund 1500 tertiary scholarships
with industry.
We believe this initiative, and others
like it, will change the way the two sectors relate to one
another.
Under National "Bright Future" is the first step
to a much more active engagement by the education sector in
helping to supply skilled people needed for a knowledge
economy.
3. Labour market rules
By any analysis the
ECA has been a stunning success. Not just for job growth
and reduced disruption, but also for emphasising the
importance of individual work places solving their own
issues without recourse to Wellington or to trade union
officials.
You will see National retain and strengthen
the ECA to promote further job growth.
The pressure on
individual firms to meet international competition in unique
and clever ways is increasing, and the challenge now is how
we can further improve our employment law.
We want to
encourage employers to take the risk of taking on new staff,
and we want employees, particularly those new and returning
to the workforce, to take up job offers.
People coming
off benefit risk significant stand down periods if the job
doesn’t work out. Employers risk the costs of disengagement
and starting again.
We believe probationary arrangements
in the ECA need discussion and attention so more new workers
are offered jobs in a fair way.
National will establish a
process to get agreement among employers, unions and young
people as to how we can best get this outcome without
eroding rights or entitlements.
Two other technical areas
also need looking at. The first is the Holidays Act. As the
Simpson Grierson report released yesterday shows this
legislation was designed for an era that has long past, when
employment was much more structured.
Because both the
demands of the market place and our social expectations of
work have changed, so have the arrangements surrounding
holidays.
The legislation has not kept up. We will revamp
the Act so it integrates better into modern employment law.
We will not reduce entitlements but make them clearer and
fairer so people do not have to go to the Courts to get them
defined.
The second area requiring attention is the
personal grievance arrangements under the ECA.
A common
complaint from employers is that a mistake in the personal
grievance process can see the substance of their case
overturned.
Case law is now coming through that is
re-establishing a more appropriate balance, but we do not
believe minor breaches of the personal grievance process
should outweigh the substance of an employee's
misconduct.
Conclusion
Too often in discussions of
employment matters we lose sight of the human
dimension.
Those people I have talked about who are
without work, who have low self esteem and lack good role
models, need all the help they can get to make the
transition to work.
The last things they need
are:
A government that has no expectations of
them in their journey back into work, and
Employers who think it is too costly or risky to give them a
go.
In other words, the last thing they need is a
Labour, Alliance, and Greens Government.
Our greatest
priority must be to help those in greatest need, and to give
them the best opportunity to find their way back into work.
The more people in work, the better off we all will
be.
Going back on our employment law is not just about
giving control back to the unions, it is about turning our
backs on some of the most vulnerable people in New Zealand.
We must not go
back.
ENDS