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Employers Federation Political Update - 29 Sept

POLITICAL UPDATE Fri 29 Sept 2000 (No. 34/00)

Export rise cutting into trade deficit

A 15% jump in exports in the June year raises hopes NZ's 6-year trade deficit may become a surplus in the future. Annual exports topped $26 billion for the first time. The June year rise was the biggest annual increase in exports for 8 years.

NZ only OECD nation without growth

Today's GDP figures for the June quarter show a contraction of the NZ economy. Seventeen other OECD countries have so far posted their June quarter results; all show economic growth (average rate of 1.8%) except New Zealand, whose rate was -0.7%.

TUF intentions may lead to interest rate hikes Claims reported today that the Trade Union Federation will go "full-tilt" to get wage increases matching inflation plus a catch-up for what TUF believes workers have lost in the last 10 years raise concerns that this would trigger increased interest rates. The Reserve Bank has said it will raise interest rates to hold back inflationary pressures if wage demands are made that are not based on productivity increases.

Inflation may break Reserve Bank's 3% threshold

Meanwhile, inflation is about to crack the Reserve Bank's 3% threshold for the first time in 5 years. An average of economic forecasts by 13 agencies says inflation is expected to hit 3.1% in the year ending March 2001. The National Bank's September business outlook shows 44% of businesses surveyed expected to raise their prices in the next year, including more than 66% of businesses in the retail sector. The Reserve Bank is set to review the official cash rate next Wednesday.

Multi-employer agreements threatened

There are reports of union intentions towards multi-employer agreements in two industries once the Employment Relations Act comes into force on Monday. Members of the Engineering, Printing & Manufacturing Union are reported to be looking for a collective agreement across all INL subsidiaries, and nurses are said to be looking at a multi-employer agreement across a number of hospitals. From Monday it will be lawful to strike to try to persuade employers to enter multi-employer agreements.

Public sector main winner from ACC deregulation

Statistics NZ's Labour Cost Index shows that workplace accident insurance costs fell 22% from the June 1999 quarter to the June 2000 quarter - the period when ACC was deregulated. EMA Central says there's irony in the fact that government agencies benefited even more than the private sector from the short-lived reform. The public sector enjoyed a 34% reduction in costs compared with 19% for private businesses.

Make ACC costs transparent

ACC's 1999-2000 surplus of $817 which has allowed the organisation to consider lower premiums will hopefully be sustainable in the longer term. ACC has not made public the cost of reintroducing lump sum payments but says it will be able to meet the cost. Employers say transparency and a greater consideration of individual enterprise risk in premium setting are still important and the full cost of changes in the second ACC Bill should be made public.

Review of industry training

Employers are being asked to provide input to a review of industry training starting early next year. A consultation document will ask for views on the capacity of Industry Training Organisations, the problem of firms needing to relate to multiple ITOs, uneven coverage of ITOs, the funding formulae for state-subsidised training and other issues.

Looking to India for IT people

The Immigration Service, Trade NZ and the Information Technology Association of NZ start a recruiting mission next month in India to find IT professionals who want to migrate to NZ. NZ companies are unable to find enough people skilled in Java, Oracle databases, web design and e-commerce. India produces 600,000 science and technical graduates a year compared to just over a thousand a year such graduates.

Australia looks at growing IT skills

The Australian government has allocated $158 million to a Building IT Strengths programme to promote the growth of information and communications technology businesses. Its Beyond 2000 report says the rapid adoption of e-commerce by business will add 2.7% to Australia's GDP by 2007. The joint winners of the 2000-2001 Australian University of the Year award are the University of Wollongong, for preparing graduates for the e-world, and the University of Southern Queensland, for developing the e-university.

Seminars to address online payment fears

Clear Communications is running seminars on online transactions next month, saying fear by customers of payment fraud and a lack of payment options available to businesses are holding back e-commerce. Clear has an online payment system which allows businesses to process credit card transactions over an Internet connection with their bank, with a sweetener deal for newly established companies.


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