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PM Speech To Employers Federation

Address to

Plaza International, Wellington
Wednesday 25 August 1999 at 9.15am

New Zealand is doing well. We're growing at 3 percent a year. New jobs are being created each day.

New Zealanders want jobs for their kids and themselves.

They also want a healthy economy to secure those jobs and improve their living standards.

Economic growth and sound economic management delivered by effective and responsible Government can do just that.

National is the lead party that has delivered jobs, growth and success for New Zealanders this decade.

It's very easy to take for granted exactly how much has been achieved in nine years and how important the gains are to our future success.

I don't complain about that. It's the nature of Government that you don't very often get thanked for what you have achieved.

The risk though is that we talk ourselves down and destroy our success.

There's also a risk that employees and employers alike will take for granted the key things that underpin our jobs and forget the gains we have made. Just as importantly, there are further gains we plan to make.

For National, leadership and effective economic management is the accepted norm. They are the starting point for yet better achievement.

But that requires a successful Government to deliver this. Think back to where we were a year ago! Decisive government action has put us in full recovery mode today.

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The right industrial relations regime helped drive that turnaround. We confront an election that stands to be a stark, absolute watershed for industrial relations.

Make no mistake of it. A fundamental pillar supporting everything we have achieved since 1990 is the Employment Contracts Act. It will continue to be a pillar for the future I see if National leads New Zealand. Take it away and New Zealand's success will be dangerously undermined.

The ECA unlocked the blockages that kept our economy in a timewarp of the 1970s, despite the advances made in other areas in the 1980s.

Remind yourselves of the industrial relations environment we inherited in 1990.

Unions made the rules. Union officials in Wellington had the ultimate sign-off on decisions businesses wanted to make.

Multi-employer awards and agreements, centrally negotiated in Wellington, fixed pay and conditions of employment independently of the needs of individual employers and workers.

Employers and employees were denied the opportunity to be innovative and to make real progress.

Strikes were the pre-eminent bargaining tool. They robbed workers and employers of millions of dollars in wages and lost productivity.

The results were low productivity, loss of jobs, wage stagnation and endless conflict.

One of the big risks New Zealand faces today is that some of you here do not remember that world well. The new environment of the ECA has been in place so long that the newest generation of employees and managers know nothing else.

Employers and employees are now closer together, and both benefit.

Look at the facts. In 1990 Labour left an environment where strikes accounted for 331,000 lost workdays – or $55 million in 1998 dollars lost from the wages and salaries of New Zealand working families.

By 1998, with a National Government and the ECA, those figures were down to just 12,000 lost days or $1.8 million lost from pay packets of New Zealand workers.

Strikes have all but been silenced as the monotonously tolling bell of industrial relations.

And we have recorded a far more positive achievement. Between June 1991 and June 1999 we've added 278,000 more jobs to the New Zealand workforce. That is the equivalent of nearly 670 jobs a week – or more than the entire labour force of Canterbury. That is thanks to the flexibility of the ECA.

At the same time, living standards have improved at the same time as the growth in jobs. In the 1990s we have broken the trade-off between wage growth and jobs. This is a huge achievement.

What is more, the Reserve Bank is projecting 90,000 more jobs to be created by growth over the next three years – that's more than the entire Otago workforce to be added to the economy.

Employers can now take on new staff when the demand exists or the business opportunity arises – not when the collective demands of union bosses say so.

There's a new attitude abroad in industrial relations. And rightly, it has become the norm.

Staff expect to be able to talk directly with their managers for the best pay and conditions for their job.

As the world economy has changed and markets have changed, workers and employers have taken to this new world with Kiwi relish and ingenuity. New Zealanders also support the modern conditions delivered by the ECA.

The new attitude in industrial relations is encouraging staff and their managers to take joint responsibility for decisions that once were made across the no-man's-land of trench union warfare.

I was fascinated to see the findings of the recent A.C. Neilsen survey on attitudes toward the ECA.

Among a group of 1000 employees, three-quarters were satisfied with their working conditions. Just 15 percent were not.

Seventy four percent were satisfied with their employers.

Eighty four percent were satisfied with their job.

Seventy percent were satisfied with their job security.

Fifty four percent appreciated the ability to negotiate directly with their employers.

Just 20 percent wanted an outside party such as a union brought into the negotiations.

And 66 percent don't want change.

National will fight to see that New Zealand doesn't go back to archaic industrial laws.

Thousands of New Zealanders would lose their jobs if we turned the clock back.

Many businesses would lose their international competitiveness.

As you will see over the coming months, National has a strong and well-articulated vision of the environment that has been and will be in place to make New Zealand a more prosperous country in the years ahead.

The platform is there, and we are articulating how we mean to move forward on many fronts.

I see a New Zealand in which people who are prepared to work hard have jobs and are rewarded properly for their efforts. We are consistently working to bring that about.

That is why we are looking at sharpening the focus and the effectiveness of the ECA. There are still areas where the National Party believes we are not getting the best out of our industrial relations regime.

In some key areas National will act to improve current conditions. In particular, expect action on the Holidays Act, a probationary period for new employees to encourage businesses to hire new staff and modifications to personal grievance provisions to put more emphasis on substance rather than process.

We believe each of these areas can be improved for the benefit of all New Zealanders. And it is not merely employers who would benefit from what we are considering, but employees as well. More jobs will result for those who are currently excluded.

National will announce our complete employment policy in the election campaign. But the choice is already stark.

It's not for me to advertise what the Opposition parties plan to do with industrial relations. I'm sure they're capable of doing that themselves.

However, the Workplace Relations Bill, sponsored by the CTU and drafted by Margaret Wilson, would take New Zealand back to the timewarp of the 1970s.

That Bill would take us back to the vocabulary of collectivism, strikes, demarcation disputes and relativity.

That is a New Zealand nobody wants to return to.

Consider the prospects. Unions would once again be afforded pride of place, multi-employer collective agreements would re-emerge, staff would no longer be able to deal directly with the employer, and industrial muscle would take the place of reasoned argument.

The Wilson Bill would create an environment in which Air New Zealand pilots could refuse to carry Ansett passengers out of support for a strike at Ansett.

Do you want wharfies to be able to refuse to handle our vital meat exports if there is an industrial dispute in the meat industry?

Do you want whole industries taken out by secondary strikes or unions insisting on multi-employer deals?

I don't think so. Nor do most New Zealanders.

But that is the stark choice. Don't be seduced by the talk of mere fine-tuning. These are fundamental changes.

National in government has a record of leadership and delivery. This will continue across many areas. They add up to a stark difference between us and the others.

You constantly hear about CER and the single marketplace we operate in with Australia. Our industrial law must be as flexible and competitive as Australia's, if New Zealand businesses are to compete. Under National we are currently ahead. The Labour proposal would put us back behind Australia. More jobs would be washed across the Tasman tide.

New Zealand can and must do a whole lot better and National is the party most able to lead that. We can lift our sights from 3 percent to 5 percent growth a year if we are much, much smarter. Major announcements in education, research and tax last week show the way.

National has a clear difference on tax. Taxes will come down. The others on the Left would increase income tax and introduce wealth and capital gains taxes to fund their ever-increasing promises. If that happened, we'd risk seeing our best people move to Australia.

In trade opportunities National is well ahead in creating new opportunities and finding new customers for New Zealand. To improve our per capita income we must sell to the world. National's leadership in APEC and the World Trade Organisation will deliver jobs and wealth to New Zealand. APEC is our next opportunity. From the springboard of New Zealand's time in the chair this year, we'll be working hard to see that businesses and employees are tangibly better off thanks to APEC's trade liberalisation agenda. Yet the others claim free trade has "run out of steam". Anderton opposes it outright and would introduce tariffs, adding to everyone's costs.

For anyone doing business in New Zealand, National will continue to bring costs down. Employers are now saving millions of dollars in ACC premiums, leading to more growth and business opportunities. This means more investment and more jobs and more profit. The others promise to reverse this gain. Electricity prices are falling for many businesses. The left has opposed every step.

If businesses want to keep these advantages, that benefit them and their employees, you must get familiar with the real options you will face at this election.

National has and will work hard to see more gains like these delivered to New Zealanders at work – whatever side of the old industrial relations divide they stand on.

When a manager opens her office door each morning, when a worker checks in on the factory floor, they are logging into the global workplace – and the global marketplace.

New Zealand must be in touch and forward-looking if we are to succeed

We must be sharp, competitive and successful. My team is committed to New Zealanders' success.

We have the record, the talent and the programme. We stand for something, not against everything.

It is a better future for you, your staff and your families. A clear and decisive vote for National with your party vote will guarantee you this future.


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