Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Jim Peron: Clark Fudges Facts On 4 Weeks Leave

Clark Fudges The Facts On Four Weeks Leave


by Jim Peron *
For The Institute for Liberal Values

Christmas came early in New Zealand. In a generous mood Helen Clark decided that all workers will have 4 weeks of paid annual leave per year.

She said that the change in the law will make New Zealand more competitive when it comes to attracting and retaining labour. That concernt is odd since the Labour government recently tightened up immigration standards making it more difficult to attract labour.

The Prime Minister also said that the new law will put New Zealand on par with ³our major trading partners like Australia and the United Kingdom.²

Her choice of those two nations, out of the list of major trading partners, is a bit puzzling. In terms or either imports or exports Australia is clearly New Zealand¹s largest trading partner. But the United Kingdom comes in fourth, well behind the United States and Japan, which are second and third respectively, in terms of both our export and import markets.

By using the first and fourth place nations Helen makes her case. But she makes it selectively. Some might say, dishonestly.

The UK accounts for only 3.8% of NZ imports, according to Central Intelligence Agency statistics, while the US accounts for 15.9%. In other words the US, when it comes to imports, is four times larger than the UK. Yet Clark mentions the UK and ignores the US when making her case.

The UK falls well behind Japan as a trading partner as well. Japan accounts for 3 times more of our imports than does the UK.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Even in the export market the UK comes in a distant fourth. Only 4% of our exports go to the UK while 12.2% go to Japan and 14.4% go to the United States.

Clark¹s justification still falls short if you add the trading figures for Australia and the UK together and compare them to the combined figures for the United States and Japan. The US and Japan combined account for both more exports and more imports than do Australia and the UK.

So why did Clark latch on to Australia and the UK as examples to justify her new labour policy? Simply because they have 4 week mandatory annual leave and the US and Japan do not.

In the US there is no mandatory leave at all. It¹s a matter of a private contract between employer and employee. But it is considered customary to have two weeks leave.

According to the US Library of Congress Japanese workers are entitled to 15 days annual leave, about half of what Clark is proposing. But it was also noted that the average Japanese worker only takes 7 days annual leave per year. In addition it was noted that the average Japanese worker actually works longer hours per year than does the average American worker.

It appears that Helen was distorting the facts a tad bit by latching on to two trading partners that do have four weeks of leave while ignoring the other two major partners who don¹t have it. Her selectivity is even more suspicious when you realise that the two without the leave are actually, combined, larger trading partners than the two that do.

Clark did say that the new law will only take effect by 2007. That gives smart employers plenty of time to adjust. And she says she wants them to adjust. But how will that be done?

One way is by reducing the need for labour. In other words jobs will simply disappear or not come into existence as employers shift production to less costly, less labour intensive, methods.

Another way of adjusting will be to hold down wage increases for the next three and a half years. The law will, for most workers, merely rearrange their employment package. They¹ll get four weeks annual leave in lieu of higher wages.

Unfortunately many workers would actually be better off with higher wages and less leave time. But Helen has decided that she, not they, should determine how their pay package is structured.

Clark is clearly counting on this move being popular with voters and thus helpful in the next election. And it probably will be popular even though it shouldn¹t be.

But, since most people don¹t understand economics they are likely to see her as their champion. Helen may be playing Santa Claus but the bad news is: there ain¹t no Santa.

******

* Jim Peron is the executive director of the Institute for Liberal Values. This opinion piece is provided as a public service by the Institute for Liberal Values. For more information write peron@orcon.net.nz.


© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On The US Opposition To Mortgage Interest Deductibility For Landlords


Should landlords be able to deduct the interest on the loans they take out to bankroll their property speculation? The US Senate Budget Committee and Bloomberg News don't think this is a good idea, for reasons set out below. Regardless, our coalition government has been burning through a ton of political capital by giving landlords a huge $2.9 billion tax break via interest deductibility, while still preaching the need for austerity to the disabled, and to everyone else...
More


 
 

Government: Concerns Conveyed To China Over Cyber Activity
Foreign Minister Winston Peters has confirmed New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese Government. “The Prime Minister and Minister Collins have expressed concerns today about malicious cyber activity... More

ALSO:


Government: GDP Decline Reinforces Government’s Fiscal Plan

Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister Nicola Willis says... More

ALSO:


Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.