Home > Various > Johnny’s Report Card – National Standards Assessment y/e 2012 – incomes

Johnny’s Report Card – National Standards Assessment y/e 2012 – incomes

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises.

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Incomes

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John Key says I'd like to raise wages but I can't

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The rhetoric: (and gawd almighty, there was plenty of it…)

We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008

See: National policy – SPEECH: 2008: A Fresh Start for New Zealand

“One of National’s key goals, should we lead the next Government, will be to stem the flow of New Zealanders choosing to live and work overseas.  We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere.

To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.” – John Key, 6 September 2008

See: National policy – Speech: Environment Policy Launch

“I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.” – John Key, 15 July 2009

See: Speech: Key – business breakfast

“Science and innovation are important. They’re one of the keys to growing our economy, raising wages, and providing the world-class public services that Kiwi families need.” – John Key, 12 March 2010

See: National policy – Boosting Science and Innovation

We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key,  8 February 2011

See: Statement to Parliament 2011

The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more jobs and higher incomes.” – John Key, 21 December 2011

See: Parliament – Speech from the Throne

We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” -  John Key, 19 April 2012

See: Key wants a high-wage NZ

Key was practically out-doing Labour in championing the cause of the Working Man & Woman getting better wages. The spirits of Jim Knox, Norman Kirk,  et al, would have been dancing a happy-jig in approval at Dear Leader’s statements.

The reality:

The reality was 180 degrees polar opposite to Key’s wage-raising statements. But National’s actions were not just opposed to raising wages -  their policies were designed specifically to lower wages; undermine working conditions; and attract corporate interest. Finance Minister even admitted as such when he let slip on TVNZ’s Q+A, in April 2011,

BILL Well, it’s a way of competing, isn’t it?  I mean, if we want to grow this economy, we need the capital – more capital per worker – and we’re competing for people as well.

GUYON So it’s part of our strategy to have wages 30% below Australia?

BILL Well, they are, and we need to get on with competing for Australia.  So if you take an area like tourism, we are competing with Australia.  We’re trying to get Australians here instead of spending their tourist dollar in Australia.

GUYON But is it a good thing?

BILL Well, it is a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.

GUYON So let’s get this straight – it’s a good thing for New Zealand that our wages are 30% below Australia?

BILL No, it’s not a good thing, but it is a fact.  We want to close that gap up, and one way to close that gap up is to compete, just like our sports teams are doing.  This weekend we’ve had rugby league, netball, basketball teams, and rugby teams out there competing with Australia.  That’s lifting the standard.  They’re closing up the gap.

GUYON But you said it was an advantage, Minister.

BILL Well, at the moment, if I go to Australia and talk to Australians, I want to put to them a positive case for investment in New Zealand, because while we are saving more, we’re not saving more fast enough to get the capital that we need to close the gap with Australia.  So Australia already has 40 billion of investment in New Zealand.  If we could attract more Australian companies, activities here, that would help us create the jobs and lift incomes.

See: TVNZ Q+A: Guyon Espiner interviews Bill English – transcript

English initially admitted that ” it is a good thing ” if wages are lower, to ” attract the capital  ” – and then, realising his faux pas, goes on to correct himself in his next response to Espiner. But the truth is out; National sees  lower wages as a means by which to attract corporate investment from overseas. Especially in competing with Australia.

Then he attempts to extricate himself from the hole he has  dug by likening our cheaper wages as competitiveness similar to  sporting games, ” rugby league, netball, basketball teams, and rugby teams out there competing with Australia “.

(If this sounds like sheer lunacy, you are [1] Sane and [2] Not a National voter.)

English’s slip of the tongue is backed up by National’s on-going campaign against workers in this country.

As detailed in an earlier blogpost (see:  John Key’s track record on raising wages), practically every aspect of National’s policies; law changes; and other actions have been deliberately designed to reduce wages and conditions.

The following are excerpts from that earlier blogpost. (For full details, simply click on the heading-links.)

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1. The “Hobbit Law”

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The “Hobbit Law” took precisely two days from First Reading to Royal Assent. An Olympic record in law-making. (See: Employment Relations (Film Production Work) Amendment Act 2010 – Legislative history)

The law change made film industry workers independent contractors by default – thereby changing the definition in employment legislation of what constitutes an “employee”.

In effect, for the first time in our democracy, a government has legislated away a  workers right to determine their own employment status. They no longer have any choice in the matter.

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2. The 90 Day Employment Trial Period

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An amendment to the Employment Relations Act 2000, Section 67A, allowed employers to sack – without just cause or a chance for an employee to improve performance – within a 90 day period.

It gives unbalanced power to employers who can blackmail an employee or get rid of them at the slightest whim.

It also makes workers less willing to be mobile in the workplace. Why change jobs at the risk of being fired within 90 days of taking up a new position?

When the 90 Day Trial period was first introduced in March 2009, it applied only to companies employing 19 staff or less.

See: Will the 90 Day trial period make a difference?

By April 2011, this was extended to all companies regardless of staff numbers.

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3. Ports of Auckland Dispute

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Putting aside from the myth of  POAL maritime workers earning $90,000 – so what?

Even if it were true (which is doubtful) – POAL has never released the workings of how they arrived at that sum, despite requests), isn’t such a good wage precisely what Dear Leader was advocating in his quotes above?

POAL management sought to reduce costs;  casualise their workforce; and compete with Ports of Tauranga for shipping business. Unfortunately, competing on costs would, by necessity, involve driving down wages.

Rather than supporting the workers, Dear Leader bought into a situation where international shipping companies were playing New Zealand ports off against each other, to gain the  lowest possible port-charges.  Even local company, Fonterra, was playing the game.

Here we have a situation where New Zealand workers were enjoying high wages – something John Key insists he supports – and yet he was effectively allowing international corporations to create circumstances where those wages could eventually be cut and driven down.

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4. Rest Home Workers

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On 28 May 2012, Dear Leader explained why rest home workers weren’t getting an increase in pay on his watch,

It’s one of those things we’d love to do if we had the cash. As the country moves back to surplus it’s one of the areas we can look at but I think most people would accept this isn’t the time we have lots of extra cash”.”

See: PM: No money for aged care workers

Seven months later, Key and his fellow Ministers and MPs were given a pay rise of 1.9% by the Remuneration Authority.  Key himself pockets $3,895 in backpay, and an extra $150 per week payrise.

This isn’t the time we have lots of extra cash,” eh?

See: Christmas rise gives PM $3900 backpay, $150 more a week

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5. The Minimum Wage

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From 2004 to 2008, the minimum wage rose from $9 to $12 – an increase of $3 in four years.

From 2009 to 2012, the minimum wage rose from $12 to $13.50 – an increase of $1.50 over three years.

See: Dept of Labour – Previous minimum wage rates

Last year, Labour, the Greens, NZ First, and Mana campaigned to raise the minimum wage to $15 ($16 for Mana).

When a worker at a fast-food outlet asked John Key to raise the minimum wage to $15 an hour, he  rejected the proposal, saying,

It will go up, but it won’t go up straight away.”

See:  Raising minimum wage won’t cost jobs – Treasury

Key’s right. At the glacial speed that National increases the minimum wage, it will take another three years to deliver $15 an hour.

Yet it took only a couple of years to implement two massive taxcuts that gave hundreds, thousands,  of dollars a week, to the top income earners.

Priorities, eh?

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6. Youth Rates

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On 9 October, Labour Minister Kate Wilkinson announced that National intended to introduce a new Youth Rate, to take effect in April, next year. The rate would be set at $10.80 an hour – compared to the minimum rate of $13.50 an hour currently, and would include 16 to 19 year olds.

As Scoop.co.nz reported,

That equates to $10.80 an hour, or $432 before tax for a 40-hour week. From April next year, the ‘Starting Out Wage’ will apply to 16- and 17-year-olds in the first six months of a job, to 18- and 19-year-olds entering the workforce after spending more than six months on a benefit, or 16 to 19-year-olds in a recognised industry training course.”

See: NZ teens face $10.80 an hour youth wage rate

It is doubtful if National’s Youth Rate will actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.

As David Lowe, Employment Services Manager for the Employers and Manufacturers Association, inadvertently revealed,

Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time.”

See: Starting-out wage will help young people onto job ladder

So there’s no new job for the  younger worker – s/he is merely displacing an older worker. Which probably results in  older workers joining the migration to Australia.

End result; a loss of skill and experience for New Zealand, and a gain for our Aussie cuzzies.

Nice one, Mr Key. Remind us when you took on the role of staff recruiter for Australia?

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7. Part 6A – stripped away

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One of the most far-reaching aspects of National’s covert agenda to make the country’s workforce  “more flexible” (translation; more exploitable)  is their stated intention to remove Part 6A  of the Employment Relations Act (ERA),  which continues (or transfers under similar conditions and pay) the employment of  low-paid employees such as caretakers, cleaners, catering workers, hospital orderlies and laundry workers,  after a business is restructured or sold.

See: Part 6A – Continuity of employment if employees’ work affected by restructuring

Part 6A gives vulnerable, low-paid workers, the right to keep their jobs on the same terms of employment when  transferred to the new contractor.

See: Labour law changes announced

Labour Minister Kate Wilkinson has assured the public that this law-change will apply only to  small and medium-sized businesses with less than 20 employees.

Pardon me? Didn’t they say the same thing for the 90 Day Trial Period law? Oh yes, I believe they did,

Trial employment periods for up to 90 days for workplaces with fewer than 20 employees will be available from April 2009.” – Kate Wilkinson,  11 December 2008

See: National policy – 90-day trial period to provide job opportunities

Once National’s so-called “reforms” were bedded in, they changed it, implementing the real policy  they had wanted all along,

The 90-day trial period is to be extended to enable all employers and new employees to have the chance to benefit from it.” – Kate Wilkinson,  18 July 2010

Once Part 6A is removed from the lawbooks, the lowest-paid workers in our communities will be vulnerable. A new employer will  be able to re-write their contracts at whim; reduce  their pay; change their conditions, or dismiss them altogether. There are many such small business and the impact on their workers could be severe.

Green Party industrial-relations spokeswoman, Denise Roche, was 100% on-the nose when she described these – and other “reforms” as,

This decision is straight from the Bill Birch era of industrial relations.”

This is indeed a return to the Employment Contracts Act – by stealth. National is too gutless to face the country by honestly presenting a manifesto returning to the ECA.

Remind us,  Mr Prime Minister, how scrapping Part 6A  will raise wages, as per your promises?

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8. An End to Collective Agreements

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National’s covert agenda to resurrect the Employment Contract’s Act involves the following,

  1. The Employment Relations Authority can declare in certain circumstances that collective bargaining has ended.
  2. A duty of good faith does not require the parties to conclude a collective agreement.
  3. Employers can opt out of multi-employer bargaining.
  4. Partial pay reductions in cases of partial strike action.
  5. Removing the 30-day rule that forces non-union members to take union terms and conditions.

Items 1, 2, and 3 have only one purpose; to ensure that an employer can walk away from the negotiating table; scrap any collective agreement; and re-hire workers on individual contracts.

It is solely designed to destroy unions once and for all.

Had Items 1, 2, and 3 been in force this year, POAL (Ports of Auckland Ltd) would have been able to abandon the bargaining table after a mock “negotiation”; locked out any worker on strike; and issued take-it-or-leave-it individual contracts.

The worker’s negotiating agent,  the Maritime Union, would have been dis-empowered and destroyed.

Only the current provisions of good-faith bargaining in the Employment Relations Act 2000 and the Employment Relations Authority were able to stop POAL from unilaterally walking away from the negotiating table. (On 27 March this year, the Employment Court issued a judgement severely admonishing POAL for their actions, and ordering them to return to negotiations.)

This may satisfy free market fanatics, but it does nothing to fulfill Dear Leader’s pledges to raise wages, or create new jobs.

As usual, Key promises one thing whilst his Ministers work quietly in the background to achieve the polar-opposite.

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9. Conclusion

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Thus far we have seen no concrete  indications that John Key is implementing his  promises in 2008, 2009, 2010,  2011, and this year,   to raise wages.

Instead, Key and his cronies in National have been studiously  implementing law-changes that will inevitably result in the opposite;  a dismantling of hard-won working conditions; an  undermining of worker-representation in negotiations, and an eventual lowering of wages .

The only conclusion  that can be made is that Key has wilfully deceived voters. His public statements advocated raising wages whilst in back-rooms, he and  National Party ministers have been contriving to achieve a diametrically opposite agenda.

It serves National’s undisclosed agenda to lower wages, to attract international ‘investment’, and to allow corporations to increase profits on the backs of low-paid workers.

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10. A New Government’s Response

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Once in power, a Labour-Greens-NZ First-Mana Coalition must act decisively to undo and repeal every single one of National’s  “reforms”.

Not one strand  of their repugnant legislation must be allowed to stand – not one.

Incomes – 2000 – 2012 – The Stats

Wage Growth – 2000-2012Year (June-June) % increase/decrease

2000

1.3%

2001

1.8%

2002

2.1%

2003

2.3%

2004

2.2%

2005

2.7%

2006

3.2%

2007

3.2%

2008

3.5%

2009

2.8%

2010

1.6%

2011

1.9%

2012

2.0%

Source: Statistics New Zealand: Labour Cost Index (Salary and Wage Rates): June (Annualised) quarters

As the stats above show, National has some way to go before wage increases match those under the previous Labour government.

However, nothing that National has done  thus far, in the last four years, will go anywhere near raising wages for ordinary workers.

Instead, the expectation is that a minority of sought-after skilled tradespeople, professionals, and technicians will enjoy moderate increases, whilst the rest of the country either stagnates or goes backward.

So sayeth “Market Forces” under  National.

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Report_Card_incomes

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= fs =

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Categories: Various
  1. Theodore
    9 January 2013 at 11:54 pm | #1

    In real terms my income has dropped since 2008/09. People just aren’t spending as much as they used to and my businesses is treading water. If this keeps up I might as well relocate to Australia.

  2. 10 January 2013 at 1:48 am | #2

    This one was another particular pleasure to read …. :) Or not, as the case may be. Repugnant legislation indeed…

  3. 10 January 2013 at 6:34 pm | #3

    Theodore your right on the button.

  1. 9 January 2013 at 5:38 pm | #1
  2. 28 December 2013 at 11:25 am | #2

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