Four unions representing maritime and rail workers have condemned the Government’s decision to effectively cancel the Cook Strait iRex ferry upgrade project, and are demanding the resignation of the Minister of Finance for the decision.
The four unions are the Maritime Union of New Zealand representing seafarers, the Rail and Maritime Transport Union representing rail workers, the New Zealand Merchant Service Guild representing ship’s masters and officers, and the Aviation and Marine Engineers Association representing marine engineers.
Maritime Union of New Zealand National Secretary Craig Harrison says it is not tenable that such a major decision with massive implications for the economy should be made in such a ‘fast and loose’ manner.
“This is far more than a fiscal decision – this decision shows poor judgement and a total lack of understanding of the importance of a functioning Cook Strait connection to New Zealand’s supply chain.”
He says the ongoing technical issues with Cook Strait ferries are a result of end of life vessels being used on a notoriously challenging crossing and had resulted in serious incidents in the last few years.
“The can has been kicked down the road for years and the upgrade has to happen now.”
“This Government campaigned on getting our transport infrastructure sorted and their first move is to basically jeopardize the future of road and rail transport between the North and South Island.”
Rail and Maritime Transport Union General Secretary Todd Valster says the ferry upgrade project was an essential part of maintaining a ‘fit for purpose’ national transport system initiated by the previous Labour Government.
He says the new Government’s decision to dump the project was reckless and indicated an agenda to run down key parts of our transport infrastructure.
“The iRex project would deliver fit for purpose, modern vessels and terminals, that would provide reliability, resilience, low emissions and a safe service.”
Mr Valster says the iRex project would deliver a long term solution for the Cook Strait over decades, which justified the cost of the project.
He says the Minister of Finance and the Government had made an irresponsible decision that would cost millions to rectify by breaking contracts with overseas suppliers, and leave the Cook Strait connection with third rate, ageing infrastructure.
The announced disestablishment of Te Pūkenga shows the Government has no plan for vocational education, says the New Zealand Council of Trade Unions.
NZCTU President Richard Wagstaff said he was deeply concerned about the impact that another change process will have on the provision of vocational education to the workforce.
“The government’s approach to change is to terminate existing arrangements without producing a plan for what will replace it, leaving everyone in the lurch and without any certainty. The consequences of taking this approach at Te Pūkenga are enormous.”
The disestablishment of Te Pūkenga is going to mean several more years of uncertainty in this sector, threatening continuity of vocational training and adding enormous stress for an already exhausted Te Pūkenga staff.
“This is another example of the new government’s absence of vision and its disregard for workforce development and workers’ wellbeing.”
Wagstaff said the Government is underestimating how costly this change process will be, in terms of losing momentum to service delivery, impact on learners, impact on current staff, and financially.
“The new Government has talked repeatedly about being careful with taxpayer money, and about doing evidence-based policy. Yet it is embarking on an uncosted and unplanned restructure of the vocational education sector without providing any evidence as to how this will improve outcomes for learners. This is the very opposite of responsible government.”
Wagstaff said that the Minister for Tertiary Education and Skills Penny Simmonds needs to front up with a plan.
“The NZCTU invites Minister Simmonds to articulate her vision for vocational education, and to explain how the disestablishment of Te Pūkenga will deliver this vision. We also invite the Minister to do some homework and figure out how much this is all going to cost.”
“The NZCTU was categorically not consulted on repealing Fair Pay Agreements by the new Minister.
“It is very concerning that the Minister of Workplace Relations doesn’t understand what consultation is in practice, considering the importance of this concept for the portfolio.”
Wagstaff said that the public announcement of FPAs being repealed before Christmas was made at the same time that the NZCTU first met with the Minister.
“We are unsure if the timing of the meeting was deliberate, and whether it was done so she could pretend that consultation did happen.
“Genuine consultation cannot occur if a decision has already been reached by the Minister.
“At no point did the Minister say she wanted to consult on FPAs. She asked us ‘to explain what an FPA was’ and ‘to give her an update on our thinking on where they are up to’.
“She did suggest she was weighing things up, but we were not invited to brief her properly on FPAs as part of a consultation Cabinet paper process.
“At no point were alternate options canvassed, nor was the government’s position, timetable, or the possible consequences of the end of FPAs discussed.”
Wagstaff said Minister van Velden invited him to a meeting after receiving the NZCTU’s written Briefing to the Incoming Government, and that during the half hour meeting, Fair Pay Agreements were discussed for ten minutes.
Wagstaff said, “We want to have a constructive relationship with this Government, in the way we have been able to do with all previous Governments. This is not the start we would’ve hoped for.”
Unions are heartened by the response to a petition to keep Fair Pay Agreements, which has now reached well over 10,000 signatures.
NZCTU President Richard Wagstaff said it was a sign of how popular the new legislation was amongst workers.
“We are seeing working people standing together to protect FPAs. Workers have been doing it tough during the cost-of-living crisis, and the single most effective protection we have is Fair Pay Agreements.
“FPAs could revolutionise entire industries, lifting pay, conditions, and access to training. We also believe the new laws will stop the brain drain to places like Australia, which have similar systems to FPAs in place.
“This is a game-changer for hundreds of thousands of Kiwi workers.”
The petition milestone was reached after Newshub yesterday revealed that the Government was ignoring the negative impacts of repealing Fair Pay Agreements, and the advice of its own officials. That advice showed the repeal would disproportionately affect already marginalised workers, such women, disabled workers, Māori, and Pasifika.
FPAs have already been initiated in multiple low-paying industries, including bus driving, cleaning, security, hospitality, supermarkets, early childhood education, and port work.
Wagstaff said, “Any Government whose first move is to strip the promise of a better working life away from hundreds of thousands of people is profoundly out of touch.
“They should be listening to the people who would benefit from an FPA, and to the thousands who want to see FPAs protected.”
A cabinet consultation paper provided to the New Zealand Council of Trade Unions by Newshub today, shows the incoming Government is disregarding the negative impact of repealing Fair Pay Agreements, and the advice of their own officials.
NZCTU President Richard Wagstaff said the paper shows the Government ignoring the impact on workers in a cost-of-living crisis and reflected poorly on Christopher Luxon’s management of the policy.
“This demonstrates the profoundly out of touch priorities Christopher Luxon has for New Zealand. Alnd already, it seems like he’s lost control of his cabinet.
“This Government has made a choice to prioritise cutting pay and conditions for hundreds of thousands of vulnerable Kiwi workers, by repealing the FPA Act.”
The paper outlines the process by which Fair Pay Agreements would be repealed. In one section, it outlined who would benefit from improvements to working conditions.
“Given [women, Māori, Pacific people, and young people] are disproportionately represented in workforces where there are lower employment terms, they could have disproportionately benefited from any improved terms obtained by an FPA.”
Wagstaff said Luxon was ignoring the evidence provided by officials about how damaging this move will be.
“By pushing forward with this, Luxon is taking money directly from the pockets of hundreds of thousands of hardworking Kiwis. This comes after last week, where the NZCTU discovered that the Government was prioritising paying out $3 billion for landlords.”
The paper also states that the NZCTU has been consulted on this process. Wagstaff said no proper consultation had taken place with the NZCTU.
“After campaigning to tackle the cost-of-living crisis, one of the first actions of this Government is to make it harder for many workers to get ahead, and to get the protections they deserve. It just proves what we said all along during the campaign that Christopher Luxon is out of touch.”
The Maritime Union says ongoing uncertainty about the future of Port of Auckland is a threat to the economic stability of Auckland City and New Zealand.
The Mayor of Auckland is proposing two options – the sale of an operating lease of the Ports of Auckland (with proceeds going into a fund), or continued Council ownership of the Port with a gradual reduction in size.
The stated preferred option for the Mayor is privatisation – sale of a long term operating lease.
Maritime Union of New Zealand National Secretary Craig Harrison says the Port of Auckland must remain in public ownership.
Mr Harrison says there is danger of massive price hikes on freight if Port of Auckland was privatised, as recently happened in Australian ports operated by global port conglomerate DP World.
“It will be worse than the chickens coming home to roost if we hand over the port to an outfit like this – it will be the vultures coming home to roost.”
Mr Harrison says there is currently no feasible alternative to the Port of Auckland, with other ports operating at capacity, and lack of infrastructure to move freight to Auckland from other ports.
He says it is not realistic to shrink the Port without having a plan in place as how the growing quantity of freight will be handled.
“Any major changes to port location or the supply chain would be a multi-billion dollar, decades long process, requiring central and local Government co-ordination, including coastal shipping and rail links.”
“Put simply, the current value of the Port of Auckland as a trade gateway for the country far outweighs its value to the Council as a one off cash injection.”
Mr Harrison says according to polling carried out for the Maritime Union, a strong majority of Aucklanders oppose any sale of the Port, and elected representatives would be held to account if they went against the will of the people.
“There is no doubt Auckland City faces difficult decisions, but the sale of the port is not a solution.”
“The best approach is to maintain a steady course for the Port of Auckland as a profitable strategic asset for the people of Auckland.”
New analysis has shown the cost of interest deductibility changes will put a further $1 billion in the pockets of landlords, said NZCTU Economist and Director of Policy Craig Renney.
“We have looked at the details of the National Party & ACT coalition agreement, and our investigation demonstrates that the cost of returning interest deductibility will rise from $2.1 billion to $3 billion. Once behavioural impacts are added, this figure would likely exceed $1bn across the forecast period. This is a direct effect of the changes to the policy which bring in interest deductibility earlier and faster than previously suggested”.
This is set out in table 1 below:
Table 1: Mortgage Interest Deductibility
Programme
2023/24
2024/25
2025/26
2026/27
2027/28
Current law
50%
25%
0%
0%
0%
National Party Proposal
50%
50%
75%
100%
100%
Coalition Agreement
60%
80%
100%
100%
100%
Craig Renney said, “Crucially, this change would be retrospective – meaning that landlords would be able to claim 60% interest deductibility from 1 April 2023. That means that they will be receiving a rebate on payments already made. Landlords will be cut a cheque from government, but tenants will not benefit from the rental payments they have already made. That’s hugely unfair and simply rewards landlords for nothing.
“This $1 billion additional cost will pile further pressure on a budget that already is having to cope with the $3 billion loss of the foreign buyer tax. This is money that will need to be found from further deep cuts to public services, more debt, or higher taxes – such as those on the new smokers National is hoping pick up the habit. It’s an enormous and unnecessary expense. This is money that could be used to support free prescriptions or half-price public transport, both of which are being scrapped.”
These numbers have been independently assessed by Terry Baucher, Tax Specialist at Baucher Consulting.
Baucher said “It is a highly unusual move to make retrospective tax changes like this. I can’t recall a tax measure like this being brought in after an election with retrospective effect.”
Renney said, “Nobody voted for this change. ACT’s manifesto had Interest rate deductibility changes starting in 2024, as did the National Party Manifesto. There is no mandate for this change. These changes are likely to put further pressure on the housing market and will advantage landlords against first home buyers. There is no economic reason why you would make this change in the way they have.
“Budgets are about choices, and we are going to have a mini-budget in December 2024. The incoming government could have used this money to pay the pay parity bill for Early Childhood teachers, which would cost just a quarter of this cost-blow out. Instead, landlords are getting an early Christmas present while tenants and the users of public services get austerity and cuts.
“National and ACT should abandon this bad plan and instead use the $3 billion to invest in communities and public services across New Zealand. The value of National’s tax package to middle and low-income households has already been weakened with the loss of working-for-families tax credits. This change simply skews the tax advantages further to those with higher incomes.”
CTU analysis shows that over the forecast period to 2027/28 (the same period used by National in their Back Pocket Boost document) mortgage interest deductibility was due to bring in $3.516 billion in revenue.
With the changes National had proposed, this fell to $1.094 billion – a fall of $2.42 billion. This fall is different from the $2.1 billion set out in the Back Packet Boost report because it uses updated data from IRD (produced in November 2022) which revised the estimates of income.
When the additional changes factored in from the changes set out in the coalition agreement are provided, then the income generated falls to $512 million – a fall of $3 billion. This means that the deal has added a further $600 million to the cost of the changes.
Example
John owns one rental property with a fixed mortgage rate, earning the median rental payment of $580 a week. He earns $80,000 a year in income from his other employment. This gives him a combined income of $110,160.
Over the five-year period from April 2023, the coalition agreement proposals would mean that John had $411,617 in taxable income, against $524,709 on current law. This would mean that they pay $40,385 less in tax over 5 years, before any additional impact of changing the threshold rates for income tax.
The difference between the coalition deal and the National Party proposal adds a further $35 a week in benefit for John.
John’s tenant sees no benefit from these proposals.
The New Zealand Council of Trade Unions has today provided its briefing for the incoming government.
NZCTU President Richard Wagstaff said since 2017, the country has made significant progress on a range of economic and social issues.
“Under the last Government, many measures improved. Child poverty has fallen. Unemployment reached record lows. The minimum wage increased by 44 percent. Benefits were increased and linked to wages rather than inflation. Paid parental leave was extended to 26 weeks, and sick leave was doubled. All of these changes helped to deliver a more equitable Aotearoa and helped to ensure that some of the poorest New Zealanders had a real boost in their quality of life. We hope that the progress made to date continues under this new government.
“New Zealand needs to become the best country in the world to be a worker, by creating good work, and building a more productive, sustainable, and inclusive economy.”
To continue making progress the incoming government should prioritise action in areas such as:
Work to eliminate the barriers that disadvantage kaimahi Māori
Increasing the minimum wage to the living wage
Continue working to improve pay equity
Reform the Holidays Act
Criminalising wage theft
Introduce corporate manslaughter legislation
Eliminate migrant labour exploitation
Ratify all International Labour Organization fundamental conventions
Increase the capacity of New Zealand’s labour and health and safety regulators
Support vocational education and workforce development
Continue to plan for just transitions
Rebalancing the tax system
Increase the supply of affordable housing
Establish a Ministry of Green Works to close our infrastructure gap
Improve competition in key sectors
“There are also a range of areas where the CTU believes that the incoming governments agenda could do with fresh ideas. Reversing progress on honouring Te Tiriti o Waitangi; repealing the Fair Pay Agreements Act; reinstating 90-day trials for all businesses; continuing to misclassify employees as contractors; stopping further work on social income insurance; cutting public sector funding; and repealing the Reserve Bank’s employment mandate are not going to help.
“If implemented, these policies will take New Zealand backwards. They represent outdated ideas that have been proven not to work.
“This briefing is just the start of the work that the incoming government will need to complete. There is much to do, and every day that action is delayed in these areas real workers and families suffer across New Zealand. The NZCTU wants to engage with government urgently on these issues and more.
“We passionately believe in making New Zealand the best country in the world to be a worker through the creation of good work. Regardless of the differences between the trade union movement and the political parties that comprise the new government, we stand ready to work constructively with government, delivering positive policies that will make this aspiration a reality.”
November 26 marks the day women effectively begin working for free, say the New Zealand Council of Trade Unions.
NZCTU National Secretary Melissa Ansell-Bridges said that despite continued wage growth and low unemployment, the pay gap for women remains unacceptable.
“The labour market data released by Statistics NZ shows that we still have a lot of progress to make. The statistics are even worse when ethnicity is factored in. The incoming government must prioritise settling pay equity settlements to close these gaps.”
NZEI National Secretary Stephanie Mills said fair pay for early childhood teachers must be recognised and funded with urgency.
“Women in education have fought over decades to have their mahi and contribution to the learning and growth of our youngest citizens recognised and properly valued. We’ve seen significant pay equity settlements for school support staff, but there is still work to do. The settlement of more than 70 percent pay increases for kaiārahi i te reo shows the even more significant under-valuation of Māori and Pasifika women. “
Melissa Woolley, Assistant Secretary for the Public Service Association Te Pūkenga Here Tikanga Mahi said it was essential that progress continued to be made.
“We must keep up the momentum – thousands of care and support workers are already seeing their pay being eroded because of the failure to progress a fresh pay equity deal. They do a critical job of supporting people every day so they can live with dignity.
“Thousands of community social workers are also facing long delays just getting paid their pay equity payments that have already been agreed. So, our message to the incoming government is that in a cost-of-living crisis it is even more important that there is no backsliding. Let’s keep making progress.”
New Zealand Nurses Organisation President Anne Daniels said the health workforce were trying to reverse decades of historic sexism.
“It has been 130 years since women received the vote in New Zealand, but in terms of pay we are still treated like second class citizens. It is time for this inequity to stop; an inequity especially felt by Māori and Pasifika women.”
The coalition agreements set out by the incoming government are nothing less than an attack on working Kiwis, their rights, and their needs said the New Zealand Council of Trade Unions.
NZCTU President Richard Wagstaff said, “The programme provided today shows that incoming Government is out of touch with the priorities of New Zealanders, and the challenges that they face.”
“It is telling that one of the first areas of work they have highlighted for action is the repeal of Fair Pay Agreements, and the reintroduction of 90-day trials. Both measures are designed to reduce security for workers, and to make it easier to fire employees.
“At a time of economic hardship for many in a cost-of-living crisis, this is simply appalling and insensitive.
“We are alarmed to hear that they wish to revise already weak health and safety regulations, especially in light of the high fatalities and serious injuries experienced in the workplace today. Removing the ability to challenge your employment status as a contractor will also mean that more workers face discrimination and exploitation.
“National’s tax plan now makes even less fiscal sense given that significant parts of it have been withdrawn due to the loss of the foreign buyers’ tax. This puts a $3 billion gap in their plans which is not addressed in the agreements. We are highly concerned that they will fill the gap with even deeper cuts to essential public services like schools and hospitals. The government should provide transparency urgently as to how that gap will be filled.
“The incoming Government makes clear in its documents that public services will be stripped further and faster than previously thought. At the same time new commitments are made for health and education without any new funding. This will mean deeper cuts to services all Kiwis rely upon. The commitment to part privatising elements of health and education should particularly concern New Zealanders.
“All New Zealanders should be deeply concerned at the attacks on Māori, highlighted by the proposals by to remove co-governance and bodies such as the Māori Health Authority. The proposal to Introduce a Treaty Principles Bill risks damaging community relations in New Zealand, and does nothing to support Māori. The government is a Treaty partner and should recognise and honour its agreements to the Treaty, rather than abdicate its responsibilities.
“These proposals confirm the worst fears of the New Zealand public about the incoming government. This programme will damage the lives of many middle- and low-income Kiwis and will set back progress on essential issues. Now is the time for all organisations around Aotearoa to unite to challenge this dangerous and damaging direction for the country.”