Category: Council Of Trade Unions

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Government science cuts take New Zealand even further backward

Source: Council of Trade Unions – CTU

NZCTU Te Kauae Kaimahi President Richard Wagstaff is deeply concerned about the future of investment in science, following the latest announcement of another 60 jobs cuts at Environmental Science and Research (ESR). The Government has now axed more than 500 jobs in the public science sector.

“The Government doesn’t seem to believe in the value of science and isn’t interested in making the investment required. Instead, it is taking us backwards and slashing funding in favour of tax cuts for landlords and tobacco companies,” said Wagstaff.
 
“We should be increasing investment in science and properly funding Crown Research Institutes (CRIs) and universities. New Zealand is only spending about half the OECD average on science and research and development (R&D) already.
 
“It’s well known that countries that invest a higher proportion of GDP directly in R&D (both private and public) see greater returns economically, socially and environmentally.
 
“The decision to make these cuts has been made even though the report of the Science System Advisory Group report is due out shortly, which demonstrates the lack of commitment there is to listen to the evidence on the importance of science investment.
 
‘The Government talks about the need to tackle our poor productivity performance, and the need for a longer-term plan to arrest our decline, but their actions continue to take us in the opposite direction.
 
“It’s time we had a serious conversation about science, and we urgently need a government that is prepared to have that conversation and not just bury it’s head in the sand,” said Wagstaff.
 
Note:
The CTU and several affiliated unions are member organisations of the Save Science Coalition. The Save Science Coalition released a report in July this year about the cuts to science funding and staffing so far, which can be found here. The group is now working on an update to this report, to account for the ongoing cuts we are seeing at GNS, ESR and elsewhere. The report will contain more detailed numbers and information and is expected to be released before the end of the year.

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Monthly Employment Data shows weakness in economy

Source: Council of Trade Unions – CTU

Monthly employment data released today by Statistics New Zealand showed our continuing labour market weakness, and particularly challenging conditions for young working people, said NZCTU Te Kauae Kaimahi Economist Craig Renney.

“There are 21,000 fewer filled jobs than this time last year, and the fall has been led by those starting out in work. There are 25,000 fewer jobs being filled by people aged 15-24 than a year ago. This data shows that right now, it’s a hard place to find work for young people.”

“On an annual basis, weakness in the labour market was particularly evident in Auckland (down 10,500 filled jobs) and Wellington (down 3,000). The number of filled jobs fell 2% in Southland, 1.7% in Taranaki, and 1.1% in Manawatū-Whanganui. This data won’t yet reflect the significant layoffs in places like the Smithfields Timaru site or Winstone Pulp International in Ruapehu.”

“Annually, construction seems to be the most adversely affected sector, with a loss of more than 10,000 filled jobs. Accommodation and food services have 7,000 fewer filled jobs, and manufacturing sees nearly 6,000 fewer filled jobs. Administration and support services sees 7,000 fewer filled jobs. Private sector employers seem to be losing staff quickly in this labour market.”

Renney said, “The pressure is also applying to earnings. Annually, accrued earnings rose 0.8%, the slowest September rate since this series began in 2019. Here, unemployment is forecast to rise further to 5.5% in the near future, while job growth in the US and the UK is ahead of forecasts, and Australia put on an additional 47,500 jobs last month.”  

“This data shows that the labour market needs a plan, one that focusses on helping people into good, long-term work. Yet the government is doing the opposite – making work more insecure, taking away essential investment, and it has no employment plan, except more sanctions. There are things we could be doing to manage the pain being felt for working people right now. But the government is choosing not to deliver them.”

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NZCTU alarmed at further cuts to WorkSafe

Source: Council of Trade Unions – CTU

WorkSafe’s announcement that it is planning even further restructuring and cuts just months after losing 15% of its staff has alarmed the NZCTU Te Kauae Kaimahi.

“Our health and safety regulator is a critical component of our health and safety system, and we know it already has an undercooked capacity to deliver on its role,” said NZCTU President Richard Wagstaff.

“Taking more people out to save money to pay for tax cuts is short-term thinking that will have long term consequences for the health and safety of New Zealand workers.

“WorkSafe is now set up to fail. They have stripped down the organisation to its bare bones, throwing whatever they can to the so called ‘front line’ inspectorate, knowing full well that without a well-resourced support function, the inspectorate will be less effective. 

“Everyone in New Zealand has the right to expect a safe workplace and to be able to come home safely to their family at the end of the day. Sadly, these cuts will mean more workers will be at-risk.

“This announcement is all smoke and mirrors. The fact remains that WorkSafe, remains well short of the numbers of inspectors the agency once had when it was created in 2013. At that time, we had 8.4 inspectors per 100 thousand workers (similar to Australia) and now it has been run down to 6.3 – a level we last saw when the Pike River disaster occurred.

“Compounding this problem is the lack of support, and the expectation in this latest proposal for inspectors to pick up more administrative and other functions on top of their day job. This makes a mockery of the claims to move resources to the front line.

“These proposals signal a further shift away from protecting workers from risks to their health and safety and towards a focus to responding to harm. WorkSafe has had to shrink away from its proper role to fit the budget.

“Our health and safety system relies on an effective regulator. This latest announcement demonstrates yet again that health and safety is just not a priority for the Government,” said Wagstaff.

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Workers demonstrate strength of union power

Source: Council of Trade Unions – CTU

NZCTU Te Kauae Kaimahi is celebrating a strong turnout of workers across the country who stood together in opposition to the Government’s anti-worker agenda, with more than 10,000 working people attending hui from Whangārei to Invercargill.

“Today workers from a wide range of sectors and industries came together and demonstrated the strength of union power. Workers told the Government that they are sick and tired of the total disregard for their livelihoods,” said NZCTU President Richard Wagstaff.
 
“It is galling to hear Brooke van Velden try and claim today the coalition is great for working people, when she is overseeing a series of policies that erode hard fought for worker’s rights, and refuses to even meet with unions.
 
“Actions speak louder than words. That’s why we know that this coalition government is in the pockets of the rich and corporate interests and doesn’t care about working people.
 
“We are proud of our movement for uniting together and sending this Government a strong message that will not back down and let them get away with their anti-worker and anti-Te Tiriti agenda.
 
“When unions and working people unite and use our collective strength, we bring people together and transform society for the better. We have a proud history of creating change, even in the toughest circumstances.
 
“We will continue to fight for good work, livable incomes, well-funded public services, health and safety at work, and the rights of kaimahi Māori,” said Wagstaff.

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Government must support workers following Smithfield closure

Source: Council of Trade Unions – CTU

NZCTU Te Kauae Kaimahi President Richard Wagstaff is calling on the Government to show leadership following the announced closure of the Smithfield meat works, and the continued loss of regional manufacturing jobs, by putting in place policies to support workers with retraining and income insurance.

“The loss of 600 jobs will be devastating for Timaru and the communities of South Canterbury, especially during a cost-of-living crisis and an economic downturn,” said Wagstaff.

“It is unacceptable that there has been absolutely no help for the affected workers even though the Government has known since last month that this was likely to happen. We have already seen this lack of support in other situations, such as Winstone pulp and paper.

“The trend we are seeing in terms of the loss of manufacturing jobs in regional communities is going to have a long-term negative impact on regional economic development and on the health and wellbeing of whānau and communities.

“Every forecast tells us that unemployment is going to rise, but nothing is being done at the government level to address it. What we are seeing is a total failure of leadership.

“The Government is happy to underwrite private building construction but will do nothing to underwrite workers incomes.

“We need to learn the lessons of the past and not throw workers on the scrap heap when the manufacturing sector is under pressure. Government has a responsibility to support workers with retraining and pathways into employment.

“It is also becoming clearer by the day just how foolish it was to scrap plans for an income insurance scheme that would have helped tide workers over until they found new work,” said Wagstaff.

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Falling Inflation Reflects a Falling Economy

Source: Council of Trade Unions – CTU

Data released by Stats NZ today showed inflation slowed to an annual rate of 2.2%, reflecting lower petrol prices and a weaker economy, said NZCTU Economist Craig Renney.

“The data shows that petrol prices fell 8% annually, and vegetable prices fell 18% annually. These reflect both softer global demand and a return to normal harvests after Cyclone Gabrielle. Prices for discretionary spending items such as furniture, electronics, or second-hand vehicles fell. This suggests weak demand and low consumer confidence, which is exactly what you would expect when unemployment is rising,” said Renney.
 
“Inflation and rising costs that can’t be avoided by households kept rising much faster than the headline rate. Electricity costs are up 7.4% a year. Rates bills rose 12% last year. Pharmaceutical products rose 17% with the reintroduction of prescription fees. Housing insurance was up 20% from last year.

“Rents were the biggest contributor to annual inflation, up 4.5%. It’s clear that the landlord tax cuts aren’t working to reduce rents. Low-income households, struggling after real terms cuts to the minimum wage this year, will still be feeling the pinch of these increases.
 
“One of the biggest drivers of the fall in inflation was the reduction in early childhood costs associated with the new family boost payment. Without that change quarterly inflation would have risen from 0.6% in September to 0.9%. Yet we know that more than half of all eligible households aren’t claiming that support – meaning that fall is unlikely to be translating into families’ pockets for many. Petrol pricing was supported by the one-off removal of the Auckland Fuel Tax, and with rising oil prices globally that fall is unlikely to be sustained.
 
“Inflation is falling right now, but low-income workers might not be feeling the benefit as inflation they can’t escape keeps rising. Lower inflation is good news if it doesn’t come at a cost of much higher unemployment, which every forecast tells us will be happening.

“With inflation now being back in the target band, the Government has no reason to not invest in making sure that unemployment doesn’t happen. Anything else is a choice,” said Renney. 

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Accounts show Government choosing pain over a plan

Source: Council of Trade Unions – CTU

“The Government accounts released today show that spending and debt continues to grow under the current Government, but there is no plan to deliver a better economy,” said NZCTU Te Kauae Kaimahi Economist Craig Renney.

“Net Core Crown Debt increased by $20bn last year, with revenue from taxation also rising by $8bn. The OBEGAL deficit increased $3.4bn last year alone, to $12.9bn.

Finance Minister Nicola Willis admitted, “The accounts show the corrosive impact of low growth and low productivity…and we are cutting back on the investments needed to lift both.” Yet there is no plan to solve this problem, Renney said.

“The Government accounts showed our overreliance on income tax and GST taxes to balance the books. Source deductions from wages increased 10.1% during the last year. The GST take increased by 4.1%. But other sources of taxation have not increased at the same rate, or have fallen in the form of corporate taxation (-5.9%). We need a better conversation about how taxes are being levied and why.” Renney said.

“Spending on welfare has increased by 8%, with Jobseeker Support expenses rising by 17%. Welfare payments would be higher if the one-off $600m cost-of-living support is removed. Unemployment is expected to rise significantly in the future, meaning that welfare expenses will be higher in the future.”

Renney said “The Government has provisioned $500m for the Cook Straight Ferry (iREX) Costs, which is only the cost of the works abandoned to date. This doesn’t include the cost of cancelling the ferry contract, nor the cost of purchasing the replacement ferries necessary. The Government is likely facing a $bn bill for that decision alone.”

“The Minister signalled new cuts in her speech at the event, while requiring new economic growth to deliver on their financial aspirations. Yet decisions like iREX show that the Government has no means of delivering sustainable growth. Health New Zealand is looking for $2bn in savings right now, yet the Government is looking for further savings in spending on top.”

“The Government’s fiscal strategy needs to change. Government debt is low by international standards, and there is no shortage of projects to invest in. These would improve employment and economic outcomes – both of which will benefit working people. Yet the Government is wedded to plan that will see unemployment rise, and investment fall. It’s time for a better plan.” Renney said.

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OCR decision a welcome relief for working people

Source: Council of Trade Unions – CTU

NZCTU Te Kauae Kaimahi Economist Craig Renney said the decision by the Reserve Bank to cut the official cash rate by 50 basis points (0.5%) to 4.75% will be a welcome relief to workers facing higher unemployment and a struggling economy. “The Reserve Bank has been forced into a significant cut because the economy has failed to fire. Weak consumer spending, weak business investment, weak house prices, and a weakening labour market all put our economic recovery at risk.”

“The Government is expecting the Reserve Bank to do all the work and support economic growth. Rather than supporting the economy and working people through difficult times, this Government has chosen to cut spending and investment, and is happy to see unemployment rise to levels not seen for a long time. These are choices, and the Government could invest now to deliver the growth we need for the future. Simply cutting interest rates returns to the economy of the past – and all the problems it already had”.

“While many people will welcome lower interest rates, and some retailers will welcome the potential for additional spending, the rate cut is not a sign of strength in the economy but is a recognition of its weakness. We need to build a better economy,  one with good work and higher incomes. Nothing in the government’s plan for cuts delivers that.” Renney said.

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Te Whatu Ora report raises important questions for Ministers

Source: Council of Trade Unions – CTU

Quarterly accounts released by Te Whatu Ora raise serious questions about the financial challenges the Government’s claims are facing the health sector, said NZCTU Economist Craig Renney.

“The CTU highlighted at the Budget that the health sector desperately needs more funding. The report released yesterday shows the cuts to health services will go much deeper than previously advertised,” said Renney.

“The report states that $2bn of ‘savings’ are now targeted in health, just in this fiscal year (p.57). That’s a huge potential cut and is clearly not possible from just efficiencies.

“We spend $14.6bn annually on hospital services in New Zealand, and $9bn on primary health services like GP’s. The $2bn ‘savings’ are significantly more than the $130m a month the Government previously claimed. It’s also not clear if this gap is a one-off or ongoing, which would require savings year after year in health.

“It also appears that the Government has underspent on its capital programme (p.54) – spending just $1.6bn from a capital budget of $3.4bn.

“This begs questions about why Ministers are claiming that Dunedin Hospital is now unaffordable when the Government has underspent by $1.8bn in one year alone.

“Ministers clearly have questions to answer about the real nature of the savings now being required in the health sector and why.

“Ministers should be transparent with the public about why pay equity funding is not being provided, why capital investment is not taking place, and why $2bn in savings are now being targeted in health – when the claim at Budget was that health had sufficient funding,” said Renney.

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Gender Pay Gap Not Closing

Source: Council of Trade Unions – CTU

Evidence released by the NZCTU Te Kauae Kaimahi today shows that the gender pay gap is not closing quickly enough. “Calculations of official data show that women are paid 8.9% less than men on average. This fell by less than 1% last year. It is time for bolder action from the Government.” said NZCTU Vice President Rachel Mackintosh.

“It is unacceptable that in 2024 women are still discriminated against. On current trends it will take until 2055 to achieve gender pay parity across the economy – 83 years since the signing of the Equal Pay Act in 1972.”

“As Pasifika women are paid so much less than Pākeha men, they are effectively working for free from today, 27 September 2024. Wāhine Māori start working for free from October 14. All women start working for free from November 8. The average female worker loses $149.20 a week in income due to gender-based discrimination.”

“When women’s work is devalued and underpaid, women live in poverty, and so do their children. The ripples of childhood poverty last whole lives. There is no justification for perpetuating inequality by failing to act to raise women’s pay.” 

“The most efficient way to close the gender pay gap is via pay equity settlements.”

“Changes by this government will make the pay equity process more difficult. By closing the Pay Equity Unit, the coalition Government will make funding for existing and future pay equity settlements harder. They have stopped progress.”

In addition, lifting the Minimum Wage by less than inflation affects more women than men. 

Ceasing progress on pay transparency means the injustice of pay inequity continues to live in the dark. 

“Closing the gender pay gap would benefit the wider economy and deliver $1.5bn in new tax. And it would be an essential step to good work and providing dignity for all. It would benefit everyone. It is clearly untenable for the gender pay gap to continue to exist until 2055. Action is needed now.”