Shipley Speech - 'Jobs'
RT HON JENNY SHIPLEY
Luncheon address to
ASB AND WELLINGTON REGIONAL
CHAMBER OF COMMERCE
St James Theatre, Wellington
12 noon, Thursday 28 October 1999
central to our sense of well being. They contribute to our
sense of self worth and they provide the means to a better
Not having a job is extremely debilitating. The pressure is even worse for those with children. The personal hardship faced by the unemployed is easily forgotten when we discuss job figures.
But it is these same stories that drive the National Party to do everything possible to promote more jobs. It is these same stories that lead National to unashamedly champion the job creators.
We acknowledge the contribution of those in business, who have taken the risks and created jobs for nearly 300,000 New Zealanders since the early 1990s.
You have helped hundreds of thousands of families to earn a living, to pay their bills and put food on their table, and to live a full life. That's what job creation is about. And I commend the business owners for their commitment and their contribution.
While businesses create jobs, the National Party believes the Government must create the right conditions for growth.
That means implementing sensible economic policies to create low inflation, low interest rates, lower taxes, and lower business costs.
The recent PREFU shows that if we continue with our policies, business should be able to create another 115,000 jobs over the next three years, bringing unemployment under 6 per cent. That means fewer stories of hardship for New Zealand families.
The point to remember is this:
It is businesses that create jobs, NOT governments.
Some attempts by Government to create jobs actually cost businesses more.
Fancy job schemes must be paid for through taxes and debt which destroys jobs as fast as they are artificially created.
The Government can and does influence three key areas in terms of jobs:
1. the cost of
2. the skills of job seekers; and
3. the rules that govern employee and employer relations.
1. The cost of employing people
The Fiscal Responsibility Act and the PREFU now make the consequences of higher spending much more obvious.
We know that higher business costs mean low or even negative job growth. We know that higher taxes and higher costs inhibit growth. And we know that many of Labour's policies rely on these factors to pay for their promises.
Labour has an 'A' list of policies (that they plan to introduce and fund) and a 'B' list of policies (that they say they’ll introduce, but not fund).
Labour has gone to the limit of affordability on its promises in list 'A'.
The party is in sufficient trouble with their costings that they won’t be able to put money into their much trumpeted superannuation fund in the next term of government.
Labour is silent on how they will fund list 'B' because they have no room to move. It’s no surprise they are looking at a third option – list ‘C’ - policies that Labour, Alliance and the Greens will be billing businesses directly for. They include:
Increasing personal taxes by $800 million a year. Not only will skilled graduates leave New Zealand, but the cost of employing the people who remain will increase.
Reversing ACC changes, costing $200 million a year.
Removing the Employment Contracts Act and increasing the role of unions and multi-employer negotiations, costing $200 million a year. Work stoppages for the June quarter are at the lowest level for a decade. Before the ECA they cost $50 million in lost wages. Production losses could be twice that amount, and the cost of disruption to business from other people’s strikes could double that again.
Introducing paid parental leave, costing employers' $100 million a year (Alliance).
Four weeks' annual leave, costing employers $400 million a year (Alliance).
Increasing the minimum wage by $20 a week, costing employers $60 million a year, and costing young people 3,000 jobs.
These imposts are taxes in all but name. They are a tax on jobs.
But this is not the worst of it. Labour, the Alliance and the Greens seem to have forgotten the simple fact that higher costs mean fewer jobs.
The list of Labour and Alliance promises will put up the cost of employing people by nearly 3 per cent. This might not sound like much, but it could result in 20,000 fewer jobs, or a 1 per cent increase in unemployment.
This is more than the whole work force of Nelson needlessly losing their jobs over the term of the next Government.
Remember that behind these figures are people, many of whom are young Maori, whose self-esteem and sense of participation in our society will suffer as a consequence.
A National led government will continue to seek ways to reduce the cost of jobs and reduce unemployment. Not by cutting wages and salaries, but by reducing wasted effort and finding smarter ways to reach our goals.
2. The skills of job seekers
When people are unemployed the costs are high. The unemployed need our support, but at the same time National believes they have an obligation to society in return for that support.
Over the last two years we have bought the Employment Service and Income Support together to create WINZ, which has proven very successful at helping people off the benefit and into work.
We have introduced the community wage, and created obligations on the unemployed to undertake community work, if their circumstances allow.
All of this has been done in an effort to keep those who are looking for work in touch with the labour force - to help them get the skills required to win and keep a job.
Not only have the unemployed benefited from these policies, but so has the community through help with community projects.
Labour has lower expectations of people out of work and doesn't believe in community work programmes.
I predict that Labour will actually move towards adopting our community work scheme by the next election as they have with most of our welfare reforms.
I also predict Labour will eventually have to adopt our "Bright Future" initiative because it is a commonsense approach to building better links between the business and education sectors, and is seeing our tertiary education system teaching people the skills they will need for the labour market of tomorrow.
A good example is the Enterprise Scholarships in which Government contributes $20 million a year to jointly fund 1500 tertiary scholarships with industry.
We believe this initiative, and others like it, will change the way the two sectors relate to one another.
Under National "Bright Future" is the first step to a much more active engagement by the education sector in helping to supply skilled people needed for a knowledge economy.
3. Labour market rules
By any analysis the ECA has been a stunning success. Not just for job growth and reduced disruption, but also for emphasising the importance of individual work places solving their own issues without recourse to Wellington or to trade union officials.
You will see National retain and strengthen the ECA to promote further job growth.
The pressure on individual firms to meet international competition in unique and clever ways is increasing, and the challenge now is how we can further improve our employment law.
We want to encourage employers to take the risk of taking on new staff, and we want employees, particularly those new and returning to the workforce, to take up job offers.
People coming off benefit risk significant stand down periods if the job doesn’t work out. Employers risk the costs of disengagement and starting again.
We believe probationary arrangements in the ECA need discussion and attention so more new workers are offered jobs in a fair way.
National will establish a process to get agreement among employers, unions and young people as to how we can best get this outcome without eroding rights or entitlements.
Two other technical areas also need looking at. The first is the Holidays Act. As the Simpson Grierson report released yesterday shows this legislation was designed for an era that has long past, when employment was much more structured.
Because both the demands of the market place and our social expectations of work have changed, so have the arrangements surrounding holidays.
The legislation has not kept up. We will revamp the Act so it integrates better into modern employment law. We will not reduce entitlements but make them clearer and fairer so people do not have to go to the Courts to get them defined.
The second area requiring attention is the personal grievance arrangements under the ECA.
A common complaint from employers is that a mistake in the personal grievance process can see the substance of their case overturned.
Case law is now coming through that is re-establishing a more appropriate balance, but we do not believe minor breaches of the personal grievance process should outweigh the substance of an employee's misconduct.
Too often in discussions of employment matters we lose sight of the human dimension.
Those people I have talked about who are without work, who have low self esteem and lack good role models, need all the help they can get to make the transition to work.
The last things they need are:
A government that has no expectations of them in their journey back into work, and
Employers who think it is too costly or risky to give them a go.
In other words, the last thing they need is a Labour, Alliance, and Greens Government.
Our greatest priority must be to help those in greatest need, and to give them the best opportunity to find their way back into work. The more people in work, the better off we all will be.
Going back on our employment law is not just about giving control back to the unions, it is about turning our backs on some of the most vulnerable people in New Zealand. We must not go back.