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Business Update - 29 October 2004

Fri, 29 Oct 2004

Business Update - 29 October 2004

'OVERWORK' CLAIM AIMED AT MORE REGULATION An ILO survey is being used to claim that NZ employees are overworked. The survey released this week says 20% of NZ employees work 50 hours a week or more (similar to US and Australia figures). This is in contrast with European countries where only about 10% work 50 hours or more (because regulations restrict the number of hours worked there). The CTU is about to launch a campaign to get similar regulations here. This would be a bad move, as it would make the current labour shortage even worse. Those working longer hours are doing so of their free will and being paid for it, so why outlaw it? A summary of the survey is on

ENERGY POLICY DIRECTION UNCLEAR Unfortunately there's no clear direction spelled out in the Government report on "sustainable" energy released this week. The report favours renewables (though it doesn't show how these can meet projected demand), but is lukewarm on coal and other thermals. The report is the basis for consultation over the next six months, but doesn't provide enough direction to comment on. Businesses are facing uncertain energy supply because of underinvestment in generation and are facing higher costs through carbon taxes - more clarity and better strategic thinking are needed. Contact

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ENERGY POLICY AFFECTS OVERSEAS INVESTMENT Just how important NZ energy policies are to international investors was highlighted in a recent address to the Japan-NZ Business Council by the Japanese Ambassador: "The low cost of electricity has long been one of the major incentives for overseas firms to decide to set up operations in NZ. Insufficient water levels in the lakes last year, however, caused electricity prices to peak to exceptional levels, and this was consequently damaging to the forestry and manufacturing industries. Faced with these problems, the Government of NZ has been trying to improve the situation by promoting a stable electricity market through actions such as forming the Electricity Commission. I am keen to keep my attention on the outcome of these measures. The second issue relates to the Kyoto Protocol. The Government of NZ has set up a policy in which it intends to maintain the ownership of the carbon sink of carbon dioxide (carbon credits) generated from forestry, even from pr

FIRST HOLIDAYS ACT CASE GOES TO COURT Business NZ has appeared as an interested party in the first Employment Court case on the new Holidays Act - NZ Air Line Pilots Association v Air NZ Ltd, relating to relevant daily pay and a half for working a public holiday. Business NZ was involved because the issue affects many 7-day employers: whether employees who've agreed to public holidays being added on to their annual leave should then also be paid time and a half when working on listed public holidays. The decision was reserved. The NZ Professional Firefighters Union also has a case before the Employment Court on the Holidays Act 2003. Contact < >

IMMIGRATION CHANGES TO HELP EASE LABOUR SHORTAGES Improved immigration rules should help ease labour shortages in some industries. Changes to the 'skilled migrant category' announced this week will mean more points awarded in areas of major skill shortage, and expanding the definition of 'skilled employment' should enable a broader skill mix to qualify for residence. Immigration Minister Paul Swain said: "Our first priority will always be to get New Zealanders into work. But at 4 per cent unemployment, skills and labour shortages are emerging. Quality migrants can help fill those gaps."

CIRCULAR THINKING REVEALED Small businesses employing fewer than 5 people might get financial help to file their tax returns, the Otago Daily Times reported this week. Interviewing local Dunedin North MP Pete Hodgson (currently acting as Small Business Minister), the ODT reported him saying small businesses faced more compliance difficulties than large ones, and the Government might pay part of the cost of an adviser to furnish tax returns or ACC payments on behalf of a small business. This just highlights the circular nature of current Government policy - subsidising some who are suffering under the compliance regime, rather than fixing the regime itself. Cutting back excessive compliance requirements would be a better place to start, to the benefit of all businesses not just some.

KUDOS FOR HOBBS ON HSNO Environment Minister Marian Hobbs says an amendment bill will be introduced before the end of the year to improve the workability of the HSNO Act: "There will be fewer applications for businesses and more user-friendly controls with which to work." She said ERMA will consult with the public when developing standards and controls. Congratulations to the Minister for advocating these long overdue changes. Contact


INFLATION STILL RISING * Inflation results for the September quarter were in line with market expectations, but slightly higher than the Reserve Bank's predictions. The Consumer Price Index rose 0.6% during the Sept quarter, while inflation for the Sept 2004 year was 2.5%, up from 2.4% for the July 2004 year. * Other than food and apparel groups, all groups had higher inflation over the quarter, led by tobacco & alcohol (+2.2%) and housing group (+1.6%). Housing has now made the most significant upward contribution to the CPI for the past 9 quarters, through new dwellings and higher rates and rents. * The biggest individual increases were the purchase and construction of new dwellings (+1.9%), international air travel (+5.9%) and beer (+4.7%). The most significant downward price movement was for used cars (-3.2%). * Although housing-related inflation is expected to slow, other indicators point to further inflationary pressures.

VISITOR NUMBERS CONTINUE UPWARDS * The number of short-term visitor arrivals to NZ during Sept was up 9% on Sept 2003, from 148,400 to 161,200. * The number of stay days for all visitors during Sept was also up slightly (1%) on Sept 2003, with the average length of stay down 1 day to 19 days. * Over the Sept 2004 year there were 2.307m visitors, up 12% on the Sept 2003 year. * There were more visitor arrivals from Australia (+12,900), the US (+1,100) and China (+900), but fewer from Malaysia (-1,200).

NET MIGRATION STILL FALLING * Permanent and long term arrivals exceeded departures by 2,200 during Sept, compared with stronger net gains of 3,700 in Sept 2003 and 4,400 in Sept 2002. NZ and Non-NZ citizen arrivals fell and departures grew in Sept. * There was a net migration gain of 17,800 for the Sept 2004 year, down 56% from 40,400 in the Sept 2003 year. NZ citizen arrivals fell by 1,900, while departures rose by 4,400. Arrivals of Non-NZers decreased by 11,800 and departures rose by 4,600. * Comparing the year ended Sept 2004 with Sept 2003, there were big falls in net migration from China * (-9,273), Australia (-4,299) and India (-2,705). More information is on < >

JOB ADS ON THE UP * Job ads increased 0.9% to 48,504 during Sept, 15.4% higher than in Sept 2003, following a steady upward trend in the second half of 2003. * Internet job ads rose 3.7% and newspaper ads fell 0.2%, though bolstered by levels in rural regions. * All regions except Wellington and Otago had a dip in job ads from August. Wellington had the largest monthly rise for 5 months (up 3.1%), while Otago recorded its largest number for the decade, but overall the trend in the Auckland, Wellington and Canterbury regions has been broadly flat since January. More information is on < >

WHAT'S NEW on < > * Employment Relations Amendment (no 2) Act summary * Holidays Act summary * Minimum wage review submission * Survey shows difficulties in NZ business environment * Debate on health funding needed


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