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Political Update Fri 8 Dec 2000 (No. 39/00)

Union breaches ERA
Actions by the Waterfront Workers’ Union appear to be in breach of the Employment Relations Act, says NZEF’s Anne Knowles. She says picket action by the union in southern ports to try and prevent members of another union from loading logs, effectively amounts to undue influence, which is banned under the ERA: “The Employment Relations Act imposes penalties for using undue influence to induce anyone to be part of any particular union, in order to prevent demarcation disputes between unions. Proof that the issue is a demarcation dispute can be found in the fact that the International Transport Workers' Federation is supporting the Waterfront Workers’ Union in calling the Amalgamated Stevedores Union a ‘scab union’. In fact the Amalgamated Stevedores Union is a registered union, recognised under the ERA. The Waterfront Workers’ Union is accusing the Amalgamated Stevedores Union of casualising the workforce in southern ports. Yet the Waterfront Workers’ Union accepts casual labour in other situations. It appears that ‘casualisation’ is just a smokescreen for the Waterfront Workers’ Union attempt to gain a monopoly position at New Zealand ports.”

No hike in interest rates just yet
The Governor of the Reserve Bank has resisted the temptation to increase the Official Cash Rate, which remains at 6.5%, despite concerns over rising inflationary pressures. Despite improvements in the economy, the still low levels of business and consumer confidence have allowed the Reserve Bank to hold off for the meantime. However it is likely that rates will be increased early next year as the economy gathers momentum.

Industry associations want policy differences resolved
Members of the Employers’ Federation’s Business & Industry Advisory Council (BIAC) at the Employers’ Federation AGM this week asked for policy differences between the Employers’ and Manufacturers’ Federations to be resolved before their planned merger goes ahead. BIAC, representing 45 industry associations and 63,000 businesses, wants clarity on policy positions before it decides whether to continue its association with the new body.

Bright future seen for venture capital industry
The chairman of the venture capital consortium Greenstone Fund says the fund is on track to deliver a pre-tax compounded annual return of 20% over its ten-year life. Mark McGuinness said there was plenty of capital around for the right deals, and predicted a bright future for the venture capital industry in NZ.

Second ACC Bill introduced
The Government’s long-awaited second ACC Bill ‘Injury Prevention and Rehabilitation’, has been introduced. The Bill is enormous – over 300 pages. While much of it deals with technical issues and clarifies cover issues, the major policy change is the proposal to reintroduce lump sum entitlements for permanent impairment. The lump sum payments will be available for both physical impairment and mental injury (caused by physical injury or sexual abuse). The lump sum payments will replace the current independence allowance. The Minister of ACC Michael Cullen said the scheme “will be kept under review, and further changes and amendments made as the improved performance of the scheme and the economy allows.”

Review of the Health & Safety in Employment Act
The Government has issued a discussion document on the Health and Safety in Employment Act, showing a much tougher and more interventionist approach to health and safety in the workplace. Major proposals include increasing fines on employers, removing OSH’s monopoly on taking prosecution, and providing for the ability of elected health and safety representatives to issue provisional improvement notices and prohibition notices, which would essentially allow them to close down a workplace. The discussion paper tries to justify some of the changes on the grounds that many other countries have taken this approach. However this fails to take account of the unique nature of the NZ economy and the fact that around 93% of enterprises employ less than 10 staff. The need for flexibility to develop systems and processes that are appropriate to the individual enterprise is fundamental.

Federated Farmers demands compensation for double-billing by ACC
Some employers were forced to pay their ACC premiums twice in 1998/99, against the advice of both the Employers’ Federation and Federated Farmers. The double billing arose from changes to ACC in 1980 which allowed some employers to pay in arrears and some in advance. Further changes in 1999 which opened ACC up to competition then forced some employers to pay both in advance and arrears. Federated Farmers says ACC has creamed off up to $200 million, “and the Government just does not want to know.”

Federated Farmers, Employers’ Federation score highly in lobbying poll Federated Farmers and the Employers’ Federation came second and third in the NBR-Compaq’s recent poll of the most well-liked lobby groups (Greenpeace came first). Federated Farmers has a favourability rating of 61%, while the Employers Federation has a favourability rating of 42% (compared with the CTU’s 37%).

Hi tech sector creates 1.1 million US jobs
A ‘Cybercities’ report says California has the most high-tech jobs in the US, but Colorado has seen the highest percentage of growth in high-tech employment over the past five years. The Nasdaq stock market report said the hi tech sector has created 1.1 million new US jobs since 1993.


Capital gains tax would benefit employers
The Revenue Minister’s decision to remove the issue of a capital gains tax from the forthcoming tax review goes against the interests of most employers. A capital gains tax, while politically unpopular, would help peg back the reliance on investment in residential property and free up more investment for productive enterprises. Dr Cullen’s decision on a capital gains tax comes on the heels of his decision to exclude a flatter tax regime being recommended by the review team. A flatter tax regime would also be of more use to employers than the current highly graduated system.

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