Last Weeks Speech by Employers Fed Vice Pres
Vice President, New Zealand Employers’ Federation
Wellington, 25 August 1999
Rt Hon Jenny Shipley, Rt Hon Helen Clark, other distinguished guests, ladies and gentlemen, welcome.
The key focus for the New Zealand Employers’ Federation is to support a policy framework that provides more growth and more jobs. It is these two simple measures, which help, determine most the success of our people and our nation.
We are not alone.
During March of this year, NZEF employed the International and reputable research company, AC Nielsen, to ascertain just what New Zealander’s concerns were, and just what was important to the average person. The results were fascinating to say the least.
When asked about issues, the most important "first, or, top of mind" response with New Zealanders was clear - employment.
Employment was more important than the next mentioned issues being health, education, which party was in power, the economy, and law and order.
I find that initial top of mind reaction fascinating, because over recent years we have had huge and continuing debate over health, education and the economy, but the only argument which has consistently been advanced in the labour market and employment field, is whether ECA should be repealed or not.
It is noticeable, particularly nowadays, that those advancing the argument for repeal do so only on an ideological basis, and those same persons blithely ignore the real benefits that ECA has delivered to this country.
They ignore the fact that between 1991 and 1999 persons employed in the work force has grown by 18.27%.
They ignore the fact that in real terms the unemployment rate has fallen from a high of 10.62% in 1992 to 7.2% in 1999, and I have no doubt that without the Asian crisis, the subsequent recession, and the drought, this would be lower still.
They used to claim, and you may recall this at the time of the last election, that wage rates were not keeping pace with inflation, but this is now also conveniently ignored, and whereas indexed inflation has risen by 12.89% between 1991 and 1999, ordinary time hourly rates have risen 21.13% - a situation, I suggest, which refutes the claim that ECA in bargaining terms is all one-sided.
But perhaps the most graphic example of the benefits delivered must be found in the statistic of days lost through work stoppages, which in 1998 accounted for 11,778 days, less than half of the previous year and a mere 17% of the 1996 year. To put those figures in context, that is the lowest figure of days lost since 1934 – 65 years ago. In contrast, in 1990, before the ECA when institutions were far more involved and the individual was locked out of the employment relationship, there were over 330, 000 days lost.
Who possibly could pretend, when faced with such statistics, that ECA was not delivering benefits to employees, their families, their employers – indeed to society generally?
It is also noteworthy that in all the arguments advanced for repeal, nowhere is the position of business considered, and the need for business to be able to operate in a flexible enterprise environment. Yet, it is through business growth alone that wealth creation and jobs can be delivered.
The reality, I would suggest, is that if ECA is repealed, it will inevitably cost jobs, and as our research shows, jobs are the single most important issue to New Zealanders. If politicians are really listening to the electorate, they will keep the ECA.
My advice to those who would make change, is to speak with any of those people occupying the 270,000+ new jobs which have been created since 1991, and test their attitudes. To put that figure in perspective, those new jobs created since 1991 are equal to the combined populations of Dunedin, Nelson, Invercargill, Timaru and Blenheim. That number is only 40,000 short of the total population of Christchurch.
What is also important is that indicators suggest that the economy is improving still further and with that improvement we believe unemployment will also decline.
As you will see from the brochures in your conference folders, our research indicated that 66% of voters, that is two-thirds of the electorate, aren’t looking for change. They are content with things the way they are in the labour market.
Despite what some politicians would have you believe, the majority of people also indicated that they want to negotiate directly with their employer – They are not looking for third party involvement. People feel confident negotiating their own employment contracts covering salary and conditions, which is as it should be. Most are happy with the ECA, they know about it and are prepared to work within it – The legislation is seen as positive.
It has always seemed enigmatic to me, that people are free to enter into contracts for marriage, to purchase a house, a car, life insurance, and a myriad of other major life-style decisions, but the ideologists do not believe they are capable of contracting for their own jobs.
When the vast majority of people, as our research indicated, are satisfied with their jobs, their security, their employers, and their wages and conditions, why should politicians be advocating change? The attitudes of our workforce today, I suggest, are in stark contrast with the bad old days where the whole of the labour market essentially involved third party participation.
The message that we must continue as employers to deliver to the political parties is “If the ECA ain’t broke, don’t fix it” or as we have tagged the brochure "New Zealanders say KEEP THE ECA".
However, the ECA is not the only issue on political agendas. We have the spectre of tax increases and the reversal of competitive delivery of ACC, amongst others.
Now if we were to do a straw poll and ask all those to stand up who think that increasing taxes will keep our skilled and educated New Zealanders in this country – those who think that raising taxes will provide more jobs, then I suspect we wouldn’t have any takers?
On the 1st of July this year, after many years of lobbying by the New Zealand Employers’ Federation, we saw some competition brought into the workers compensation for accidents. The initial savings are in the region of quarter of a billion dollars per annum or roughly the same as a two cent corporate tax rate cut. But most importantly the focus on improved employee safety has been heightened dramatically and the incentives on rehabilitating those who do get injured have also increased.
It is puzzling therefore that some politicians want to sabotage this very constructive initiative to improves workplace safety, and reverse it July 1 next year. What’s more, they want to add in additional costs, such as lump sum payouts and coverage for stress and illness. Lump sums alone have been calculated by Alliances Jim Anderton to cost employers over $400 million per year.
Make no mistake; some of the policies that we hope to have further explained today will see dramatic change for the business community. And I have only touched on three areas.
On a positive note, I don’t believe that we should be shy about being positive. Things are not currently as bad as some make out. Our research shows that New Zealanders often think things are worse than they are. This perception, or “Clayton’s grief”, is the function of numerous negative stories run by people who want everyone to think everything is really bad. People think that they themselves are OK but their neighbour isn’t.
This negative culture, I believe, is contributing to the current outflow of New Zealanders. It is not constructive. But cheer up. Things aren’t so bad.
I’ve already mentioned that real wages are up and that employment numbers have increased dramatically
And it isn’t the end of the world on the small business front either. Between 1994-1998 there has been a net 28.1% increase in the number of small businesses. This is an increase of 49,646 more businesses creating employment.
Industry Training is Up. Contrary to what some say, there has been a massive increase in industry training since 1994. This 200% increase in industry training, supported by the ECA is the largest since records were kept. Employers are increasingly providing training as part of their core activities. From just 15,805 trainees in 1994, we now have 47,345 people in training this year. Employees and employers both benefit.
Don Brash tells us that growth is now around 3% and trending upwards. We currently have interest rates at a 30-year low, and if Dr Brash doesn’t get too carried away and the government doesn’t spend up large, these low rates should continue
Inflation is under control. Consumers don’t have expectations of paying higher prices. Competitive pressures, including the increasing influence of e -commerce, are intense, and are working to ensure that this situation continues.
The NZ$ is now at a far more realistic rate. International growth is improving. Along with the proposals to finally free up the marketing of our primary produce and allow an injection of even more innovation and capital, the prospects for our export sector are very encouraging.
However there are always challenges. Technology advances, changes in the international market place, Balance of Payments deficit, our changing domestic demographics, and a propensity for Governments to continually regulate and spend more, require that we keep on the ball.
So today we have pulled together 10 speakers from across the political spectrum. We have asked them to provide you with what they are going to do to help provide more jobs and more growth. You will note from the agenda in front of you that we have a change from our advertised program – New Zealand First leader Winston Peters is unable to speak with us today. And Graham Capill, leader of the Christian heritage party, who have one MP currently in parliament, will be speaking.
I would encourage you to take this opportunity to question the speakers on the reality of their policies. At the end of the day, when the campaign is over and the smoke clears, we as employers, as businesses who create wealth and jobs, have to live with whatever reality the election brings.
move on just a few housekeeping matters.
– Please note that the morning & afternoon teas will be served here on the 6th floor, Lunch will be served in the restaurant area on the mezzanine floor so you will need to go down the lift to get to it.
– During question time there will be two roving microphones. We ask that you state your name as you ask your question
– And finally there will be some post conference drinks to be held here on the 6th floor.
I would now like to introduce the Leader of the National Party, Rt Hon Jenny Shipley, Prime Minister.