Category: Employment Issues

Source: Council of Trade Unions – CTU

All new workers will soon to be vulnerable to being fired at will with no reason following the Government’s reckless haste to pass under urgency an extension to 90 day trials to all businesses.

The Employment Relations (Trial Periods) Amendment Bill is poised to be passed today without the possibility of select committee scrutiny and in the face of clear evidence from officials that the trials have no economic benefit.   

“Fundamental protections for workers are again being removed with indecent haste by a Government whose values are clear to all,” said Council of Trade Unions President Richard Wagstaff.

“The right to fire at will and without reason was limited to businesses employing fewer than 20 workers, but now all new workers will be vulnerable to exploitation.

“This Government promised evidence-based policy, but again this is just bluster given Treasury showed in 2017 the 90-day trial policy did not work,”

Treasury commissioned Motu which found ‘no evidence that the ability to use trial periods significantly increases firms’ overall hiring’.  It also said there was ‘no evidence that the policy increased the probability that a new hire by a firm was a disadvantaged jobseeker for a range of definitions of disadvantaged jobseeker: beneficiaries, jobseeker beneficiaries, non-workers, recent migrants, youths under 25 years old, Māori or Pasifika under 25 years old, or education leavers. This result holds both over the economy as a whole, and in the high-use industries’.

Richard Wagstaff said; “What we do know is that the policy leads to job insecurity for new workers, who for their first three months of work know they can be fired for any reason (or none at all) and with no explanation.

“This flies in the face of basic natural justice and leaves new workers especially vulnerable and in a very weak position to challenge their employers every whim, without risking their job.

“This Government is making a habit of this. Just last week it ignored advice from officials that axing Fair Pay Agreements deprived women, Māori, Pasifika and the disabled hundreds of millions of dollars in potential pay rises. It is again letting flawed free market ideology dictate policy.

“There’s simply no gain – only pain in trial periods. It is just a political payoff to the business lobby that is allergic to workers’ rights and collective bargaining and now has the ear of the Government.

“Removing basic legal rights should be an anathema in a modern democratic society and can’t be justified by serving business interests by making it cheaper and easier to fire workers.

“Together with the rollback of Fair Pay Agreements, and risks to reforms to contracting, there is a compelling case that this reform is simply designed to create a more insecure, compliant, and less well-organised workforce,” said Richard Wagstaff.

Source: Council of Trade Unions – CTU

The Government is due to decide how much it will increase the minimum wage at Cabinet today.

“Today’s decision by Cabinet on how much it will increase the minimum wage will be another early test for this Government, providing another telling insight into the importance it places on supporting working kiwis,” said Richard Wagstaff, NZCTU President.

“Ahead of the election, the coalition parties were all over the place on this issue – ACT was against any increases and National was muted.

“We know that the numbers of Māori, women, Pacific Peoples, disabled and other disadvantaged groups are over-represented among minimum wage earners. An increase to the rate makes a real difference to people on the poverty line.

“These are also the very people doing it tough in a cost of living crisis and this Government has made it a priority to support people through these challenging times.

“In the absence of FPAs, large scale collective bargaining, the minimum wage is assuming greater and greater importance over time, as more and more Kiwis are employed on it.”

The previous government consistently increased the minimum wage, bringing it up from $15.75 in 2017 to $22.70 in 2023, a 44% increase overall.

In 2023, a full-time minimum wage earner is getting $278 more before tax than they were in 2017.

Treasury and the Reserve Bank are projecting that inflation will be 4.3% for the year ending 31 March 2024. This means the minimum wage needs to increase to at least $23.67 to ensure that minimum wage earners do not take a pay cut in real terms.

“We urge the Government to have a heart and do the right thing by those earning the least and maintain the momentum of the last few years – now more than ever that should be a priority,” said Richard Wagstaff.  

Source: Council of Trade Unions – CTU

New analysis from the CTU shows the cost of the Government’s tax cuts for landlords will be many times more than the investment required for the much-needed Cook Strait ferry upgrade.

This shows the Government making a clear choice to back unproductive investment in property over investment in critical infrastructure that would help grow our economy and support business, says CTU Economist Craig Renney.

“National says the Inter-island Resilient Connection project is too expensive, but our analysis shows that, over the lifetime of the assets, the cost is only around $11 per New Zealander a year in today’s dollars. Contrast that to the landlord tax cuts, which would cost $139 per Kiwi each year. Landlord tax cuts are more than 12 times the cost of the Interislander project.

“This Government was elected with the slogan ‘get our country back on track’ – yet one of its first acts is to derail a vital transport link between the North and South islands, which carries $14bn of freight and 850,000 people each year.

MUNZ National Secretary Craig Harrison says “The upgrade of the Cook Strait ferries is not an option for New Zealand, it has to be done. The regular technical problems experienced by the ferries are a result of using end-of-life vessels in a challenging maritime environment.

“The failure to modernise this essential infrastructure leaves New Zealand exposed to further delays, service outages, expense for industry, and serious safety issues for crew and passengers. The Government’s decision sets back New Zealand’s transport resilience and will set New Zealand back.”

RMTU General Secretary Todd Valster says “The Government has stated they want KiwiRail to provide a safe and resilient service but that conflicts with aging ferries due for replacement. KiwiRail has had rail-enabled ferries since 1962. Ferries that are rail enabled allow rail freight to be moved without freight having to come off rail wagons to travel the Cook Strait. Rail-enabled ferries are safer and more efficient to load and unload. The proposed new ferries would have produced 40% fewer emissions, and the hull is designed to have a lower impact on the marine environment”.

Craig Renney says “This is a government that claims it is economically responsible while it guts New Zealand’s freight capacity and spends billions on unproductive tax cuts for property speculators. For the future prosperity of our nation, New Zealanders need to be able to move themselves and their goods around the country in ways that get easier over time, not harder. The Government should urgently reverse this mistaken decision at the mini-Budget this week.

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CTU analysis

We have modelled the costs associated with the $3bn programme over a 50-year average life of the assets, using a 4% interest rate which is above the long-run average for long-term New Zealand Government bonds. This conservative analysis makes no assessment of the likely economic benefits of more regular, safe, and reliable crossings, which is likely to be in the range of many billions in the period. Nor does it make any assessment of the cost of leasing the replacement smaller ferries over the same period, which again is likely to be in the low billions.

This assessment also makes no analysis of the environmental costs of taking freight off rail, the extra roading costs associated with more trucking, nor the continuing use of less efficient ferries that produce higher emissions. All of which are likely to be very significant.

We have also examined the cost of restoring interest deductions for landlords over the same period. We have not assumed any new landlords or any new growth in the rental market, simply that the cost of the policy rises with inflation. This is very likely to be an underestimate of the real cost of the tax cuts.

We used the base case population forecasts from Statistics New Zealand.

Nominally, the Inter-island Resilient Connection would cost on average $19.55 per person, per year over its lifetime. Adjusting for inflation over the fifty-year period, this would fall to an average $11.12 per person, per year in 2025 dollars. The landlord tax cut costs an average of $232 per person, per year before inflation adjustment. After adjustment, each New Zealander would be paying $139 per person, per year in 2025 dollars.

Source: Council of Trade Unions – CTU

GDP numbers provided by Stats NZ today demonstrated that the size of the economy fell by 0.3% in September 2023.

NZCTU Economist Craig Renney said “this data is much weaker than had been expected by commentators, and should give decision-makers food for thought. If growth is weakening, additional interest rate increases should be even further from consideration. The coalition Government should also be making sure that it has support for workers and communities ready should unemployment rise quickly as well.

“This data shows worrying signs that important parts of the economy have stalled. Manufacturing (-3.4%), mining (-1.8%), food production (-2.4%), construction (-1.7%), and transportation (-4.5%) all saw significant falls in output this quarter. Goods-producing industries saw their output fall 2.6%.” GDP per capita fell 0.9% in September, demonstrating that GDP figures may have been worse were it not for the impact of population growth.

“Now is not the time for tax cuts that will simply stoke house prices in the housing market and add little value to the real economy. Instead, government can act to counterbalance the impact of this downturn through investment in tackling our chronic infrastructure gap. That would not only have the benefit of making New Zealand a better place to live, it would also support future economic growth.

“GDP data shows weakness in both the consumer pockets, with household spending being down 0.6%. In particular, spending on durable goods (like household appliances) fell by 3.2%.

“This is indicative of households feeling worried about the future, particularly about their employment security. The government should be showing how it is going to support economic demand over the next few months, rather than taking it away through cuts and removing employment protections.”