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Business NZ Update Fri 30 Sept 2005

Fri 30 Sept 2005, issue 125


The latest Business NZ-KPMG survey shows compliance costs have increased over the last year, and highlights tax as the top compliance problem. In 2005 the average firm shouldered around $53,000 in compliance costs (compared with $36,000 in 2004 and $45,000 in 2003).

Small firms were again worst hit. Participants scored the Companies Office as the most helpful agency and the Ministry of Education as the least helpful. Around 1200 enterprises, employing around 163,000 employees, took part in the survey. More info at:

85% OF WHAT?

A recent claim by the engineers union that its industrial action achieved 5% pay increases across 85% of all its collective agreements has been generously misreported by some media as ‘85% of workers got 5%’. In fact, the number of workers rewarded as a result of the industrial action is perhaps no more than two or three thousand in all, since most employers involved are small businesses with only a few employees – hardly the great groundswell claimed by the union.


A recent Employment Court decision contradicts previous advice to employers by the Labour Department. Businesses who have relied on the Department’s advice on communicating with workers during bargaining should take note of the significant change that has taken place. Until now employers have been advised that it is OK to talk to their workers to correct any inaccurate or misleading information a union may have put out during bargaining.

But a recent case (Christchurch City Council v Southern Local Government Officers Union) has brought the ruling that it is a fineable offence if employers communicate with their union member employees about anything to do with the bargaining at all during the bargaining period (which could be as long as a year). From now on, communication with those employees will be allowed only if the bargaining parties start off by agreeing on a bargaining process that allows communication to happen – something that may be difficult to achieve.

The only recourse if inaccurate or misleading information is put out is bringing an action against the union for breach of good faith - but by then the damage would be already done. Great employment law!


Depending on the final election result, we could get very different outcomes in terms of employment law… Labour would reverse a recent Court ruling, in order to require cleaning contractors to take on previous contractors’ employees; would ‘do something’ about redundancy requirements, work/life balance and pay equity; and would legislate for meal and refreshment breaks.

National would remove the 2004 amendments to the ERA; get rid of the union monopoly on collective agreements; allow a 90-day probation period; fix ‘relevant daily pay’ problems in the Holidays Act; let employees cash up the fourth week of annual leave; and reduce health & safety compliance costs.

United Future would push for a review of grievance and dismissal procedures, a 6-month probation period, no more “bargaining bonuses” and a repeal of law that makes employers liable for stress.

NZ First wants to ‘lock in’ 4 weeks annual leave. Greens want a 35-hour week, minimum wage of $12 an hour, and more collective bargaining. Of course, the possible outcome of a minority Government propped up by different parties for different circumstances could mean few or even none of the above policies get actioned….


THRIVE events organised by Business NZ regional organisations continue their successful roll-out through the country. The next one is in Wellington’s Embassy Theatre on 12 October, and features Karen Walker on growing global brands, Tana Umaga on leading high-performing teams, Saatchis’ CEO Andrew on inspiration, Professor Paul Callaghan on nanotechnology, Hell Pizzas’ Callum Davies on extreme marketing, and Trade Me founder Sam Morgan on success through ‘community’ thinking. MC is Mike Hosking. More info and booking at or


The Holidays Act is causing affordability problems for emergency services. The Employment Court has ruled that the employment agreement used by the Fire Service is in breach of the Holidays Act (because it doesn’t allow choice over alternative holidays). The agreement says when firefighters work on a public holiday, their alternative holidays can be provided in a block - i.e. the firefighters don’t get to choose their own alternative holidays. But providing this choice would require ongoing, compounding roster changes, adding millions in payroll costs (more cost to the taxpayer), given the needs of 24/7 emergency services. The Fire Service will appeal the ruling.


The Employment Court has also ruled against the pilots’ employment agreement used by Air NZ, another 24/7 operator. The agreement transfers their entire public holiday allowance (including the equivalent of time and a half payments for public holidays) to their annual holiday entitlement. But the Employment Court says that any public holiday they actually work should get paid at time and a half, as well. This ‘double dipping’ would have a big impact on Air NZ’s wage bill (more cost to the travelling public). Air NZ will appeal the ruling.


Organisations with vehicle fleets may be interested in upcoming Road Safety Awards, with cash prizes for innovation and achievement in road safety. Past winners include Fonterra (for a safety programme that reduced injury accidents in its tanker fleet), Databrake International (developed a retro fit brake lighting system where hazard lights flash more intensely as the braking intensity increases), and Excell Corporation (safety programme that cut its employees' at-fault crash rate).

More info on Also on road safety, AA Driver Education is running courses: ‘Protecting employees and reducing at work vehicle crashes’ – in Auckland, Wellington and Christchurch 25-27 October, including sessions by a UK expert on vehicle fleet safety management systems to protect employees and reduce crash risk. Info & registration form on GROWTH STATS


• Economic activity increased 1.1% during the June 2005 quarter, above market expectations. It was the largest quarterly rise in five quarters, and the strongest June rise since 2002.

• There was strong business investment in fixed assets (up 6.1% over the quarter), led by increased investment in non-residential buildings (up 18%).

Industry production was led by increased activity in wholesale trade and finance & business services. Activity in goods-producing industries rose 0.6% during the quarter, with the main contribution by construction. While non-residential building was strong, residential building construction decreased 2.9%. Primary industries rose 0.5%.

• For the June 2005 year, economic growth was 3.1%, down from 3.8% in the March 2005 year and 4.2% in the June 2004 year. The June 2005 year results represent a gradual fall in growth that is expected to continue over the next year.


The provisional value of exports for Aug 2005 was $2,360m, down 0.2% from Aug 2004, while the provisional value of imports was $3,465m, up 12.7%. This brings a trade deficit of $1,105m (46.8% of exports), the largest monthly trade deficit on record. The August month tends to show a deficit, but this year’s is three times the last decade’s average of $341m.

• Over the last year imports increased for 21 of the top 25 countries we receive merchandise from, while exports increased for only 12 of the top 20 countries we export to.

• Over the Aug 2005 year the value of imports was $36,390m, 7.3% higher than the Aug 2004 year. The value of exports was $30,573m, up 1.6% from the Aug 2004 year, giving a trade deficit of $5,817m, or 19% of exports, for the year. More information on


• Compliance survey confirms business groundswell on tax
• Competitiveness – we could do better
• Submission on product stewardship & water efficiency labelling
• ANZ-Business NZ Performance of Manufacturing Index (PMI) for Aug 2005


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