Archive for 23 May 2013

Key’s broken promise on raising wages




Once again, the Prime Minister has shown that he says one thing – whilst doing completely the opposite. The implementation of Youth Rates next month will be another in a series of his broken promises.

I think most readers of this blog (and other sources of  political information) will recall certain statements made by Dear Leader over the last four to five  years,

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 has repeated the same pledge every year since 2008.

On 1 May this year, National will be implementing a cut to the wages paid to young New Zealanders. The new youth rates will be  euphemistically known as the “Starting-out wage”.

The cut to wages of young workers will be as follows,

  1. 16 and 17-year-olds in their first six months of work with a new employer
  2. 18 and 19-year-olds who have been paid a benefit for six months or longer, and who have not completed six months of continuous work with any employer since starting on benefit
  3. 16-to-19-year-old workers in a recognised industry training course involving at least 40 credits a year.

Acknowledgement: Scoop – Starting-out wage available from 1 May

On 21 March Labour Minister, Simon Bridges, said,

“…The starting-out wage will provide an incentive for employers to help give young people a foot in the door and start building their skills and experience…


The starting-out wage will help set young people up for a lifetime of meaningful employment.”

Acknowledgement: Parliament – Hansards – 3. Youth Employment—Starting-out Wage

So will  a reduction in wages for young people, 16 to 19, help create more jobs? Or will it simply increase “job churn”, displacing older worker for younger, cheaper labour?

A previous “job creation” initiative from National was an amendment to the Employment Relations Act 2000, Section 67A – the 90 Day Trial Employment Period.

The 90 Day Trial Employment Period was implemented on April 2009, for workplaces with fewer than 20 employees. Labour Minister Kate Wilkinson enthusiastically predicted that the change to legislation would create more jobs,

“ The 90-day trial period will provide confidence for employers engaging new staff and allow struggling job-seekers to get their foot in the door, rather than languish on a benefit…


… The 90-day trial will provide real opportunities for people at the margins of the labour market.”

Two years later, by April 2011, National extended the 90 Day Trial Employment Period to cover  all businesses.  Labour Minister Kate Wilkinson stated,

The Government is focused on growing a stronger economy and creating more jobs for New Zealand families,” says Ms Wilkinson.

There are a lot of people looking for work and the changes announced today will help boost employer confidence and encourage them to take on more staff.


The evaluation showed that 40 percent of employers who had hired someone on a trial period said it was unlikely they would have taken on new employees without it.

Acknowledgement: Government statement – 90-Day Trial Period extended to all employers

So. How did the 90 Day Trial Employment Period work out? Did it create more jobs? The stats reveal the results with unambiguous, damning, clarity,




As the chart above clearly shows, the answer is clearly no.  After the initial introduction of the 90 Day Trial Employment Period in April 2009, unemployment continued to rise. The same occurred after April 2011.

There is no reason to believe that implementation of Youth Rates will yield any different results.

The evidence suggests that tinkering with labour laws does not – and cannot –  create jobs. High unemployment is caused by other factors; entrenched problems in our economy; the high value of the dollar; a flood of cheap consumer goods; foreign workers being brought in to fill vacancies; poor wages; lack of planning between business-labour-government; and an ad hoc approach to on-going training for young people.

Instead of treating on-going education and training in young people as an investment – successive governments have erected barriers such as training and education fees. The situation that New Zealand finds itself in is sheer lunacy. We have thousands of unemployed New Zealanders – and yet government does little to facilitate them into training or higher education.

Why, for example, are unemployed paid a benefit to do nothing – and yet are forbidden to take up further education or trades-training?

To a half-way sensible person, this is madness.

And speaking of madness… National must know that cutting wages for young workers will not help create new jobs.  It may displace older workers in some areas, but otherwise it may act as further de-moralisation and discouragement for young people who are already facing tough times and an uncertain future.

What this does show is that National has no real job creation policies. For National, their sole reliance is on the “marketplace” to deliver new jobs. Sadly, they are mistaken – their market-based faith is half the problem.

Having faith that rain will come on a given day will not make it so.

Sensibly, the fast food industry has already come to the same conclusion that unions and others on the Left have instinctively understood for ages,


Thumbs down by fast-food chains to youth rates

Acknowledgement: Fairfax Media – Thumbs down by fast-food chains to youth rates


The Nats appear to be so wedded to their screwy market-based faith-politics that the failure of the “marketplace”  eludes them.

It’s a shame that National hasn’t caught up with the bleedin’ obvious.  Or… have they? It appears that some people are doing very well from the “marketplace”.

At our expense…


Increase for SOE bosses 'obscene'

Acknowledgement: Fairfax Media – Increase for SOE bosses ‘obscene’



Here’s a clever idea – all those people who vote National should have a wage/salary freeze during the term of that government.  After all, as some National supporters keep insisting, raising the minimum wage “harms the economy”. (I assume the same holds for all  wages and salaries?)


– “Hey, Krystal, let’s freeze our wages, to set an example for everyone else, and for the good of the economy!”
– “Oh, Toby! What an absolutely spiffing idea! Dear Leader WILL be pleased!”


The rest of us, who vote for Labour, Greens, Mana, et al, can have our wages/salaries linked to Australia’s pay rates.

Now I ask you – what could possibly be fairer than that?

This blogpost was first published on The Daily Blog on 12 April 2013.




Previous related blogposts

John Key’s track record on raising wages: Preface

1. The “Hobbit Law”

2. The 90 Day Employment Trial Period

3. Ports of Auckland Dispute

4. Rest Home Workers

5. The Minimum Wage

6. Youth Rates

7. Part 6A – stripped away

8. An End to Collective Agreements

9. Conclusion

10. A New Government’s Response



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Mining, Drilling, Arresting, Imprisoning – Simon Bridges




NZ is prepared for an oil spill






On TVNZ’s Q+A last Sunday, Energy Minister and Dear Leader Mini-Me, Simon Bridges, announced a new law with heavy sanctions against protesters who “want to stop other people going about their lawful business and doing what they have a permit to do and they are legally entitled to do“,




Govt plans hefty fines for offshore mining protests


Acknowledgement: Radio NZ – Govt plans hefty fines for offshore mining protests




In plain english, Bridges was referring to  activists and local people who tried to stop Petrobras and Anadarko from deep-sea prospecting of the East Coast of New Zealand.


To refresh the reader’s memory;


Anadarko is the same company that, it was revealed in November 2011, Dear Leader  John Key was meeting in secret talks,





Acknowledgement: TV3 – Key keeps meeting with Anadarko boss quiet




(Funny how Key habitually meets corporate businessmen in secret…)


Anadarko is the same company that was involved in the Deepwater Horizon disaster on 20 April  2010 in the Gulf of Mexico, killing 11 men on the platform; injuring 17 others; and released about 4.9 million barrels of oil into the ocean from a 10,680 metre deep well.









Judge Rules BP, Anadarko Liable in Gulf Spill


Acknowledgement: Wall Street Journal – Judge Rules BP, Anadarko Liable in Gulf Spill




Petrobras – the target of sea-going protesters in March and April of  2011 (see: Protest flotilla taking on oil giant ) – intercepted and protested against  Petrobras’ prospecting-drilling ships at the Raukumara Basin, off the East Cape of the North Island. The water at the Basin is deeper than those of the Gulf of Mexico, where the Deepwater Horizon drilling rig  blew apart.


During the protest, on 23 April 2011, the skipper of the ‘San Pietro‘, Elvis Teddy, was arrested (see:  Charge laid after oil protest).


With Petrobras’ track record of oil spills elswhere in the world, it was hardly surprising that people on the East Coast were angry that their coastal waters were under threat,




Brazilian oil spill draws attention to drilling in New Zealand


Acknowledgement: TV3 – Brazilian oil spill draws attention to drilling in New Zealand




Six months later, the MV Rena would run aground the Astrolabe Reef, spewing 1,700 tonnes of heavy fuel oil and 200 tonnes of marine diesel into the east coast waters, and onto beaches (see:  Rena ‘worst maritime environmental disaster’)


No wonder many New Zealanders wanted no part of deep sea drilling of our coast. Well, most New Zealanders,




John key - deep sea drilling - rena - oil spill




Meanwhile, on 11 April 2011, Dear Leader Key had a rush of blood to his head and took on quasi-fascist overtones when he threatened to unleash our own military forces on protesters. As Fairfax Media reported,


Prime Minister John Key is not ruling out using the Navy or Air Force to ensure multi million dollar oil exploration work off the East Coast continues.

Key today hit out at groups protesting against exploration by oil giant Petrobas by saying the company should be able to carry out work it was legally entitled to do.


Acknowledgement: Fairfax Media – PM hits out at Petrobras exploration protesters


Not since the 1951 Waterfront Lockout has a New Zealand government used the military on it’s own people.  This is the sort of man that our Prime Minister is.


However, the Nats have become more cunning, and instead  are proposing to  amend the law, criminalising sea-going protests with heavy fines and terms of imprisonment. As Simon Bridges said on TVNZ’s Q+A (31 March 2013),


JESSICA MUTCH I want to start off by asking you your predecessor in a speech, Phil Heatley, said, ‘I’m determined to ensure the mining sector is not hampered by unsafe protest actions by a small but vocal minority.’ You’ve been working on this since taking over. What are protesters in for?

SIMON BRIDGES So, that’s right. So we are acting, and so two offences are going to be put into the Crown Minerals Bill. Look, the first of those is truly criminal offence. Effectively, what it says is that it will be stopping people out there at deep sea, in rough waters, dangerous conditions, doing dangerous acts, damaging and interfering with legitimate business interests with ships, for example, seismic ships, and what they’re doing out there.

JESSICA What fines are we talking about there?

SIMON Well, for that one, 12 months’ imprisonment, or $1000 (please note: the minister meant $100,000 not $1000) or $50,000 fine, depending on whether you’re a body corporate or an individual. Then a lesser, more infringement offence, really, strict liability offence for entering within a specified area, probably up to 500 metres within that ship, again because of the dangers associated with doing that.


Acknowledgement: TVNZ:  Q+A – Transcript Simon Bridges Interview


Jessica Mutch  challenged Bridges on this,


JESSICA Isn’t this just about putting commercial interests, though, ahead of the rights of New Zealanders? We saw this- the Government doing this with The Hobbit as well.

SIMON No, I don’t think so at all. Look, I think what you’re seeing is a desire to ensure that really reckless, dangerous acts out hundreds of miles from the shore don’t happen. I don’t think it’s on. I don’t think most New Zealanders would think it on. They’d agree with me, I think, that it should be treated as criminal behaviour.


And then a glimpse of truth came out,


JESSICA Did mining companies complain to the Government?

SIMON Oh, there have been complaints. Look, I’ve talked with a range of businesses.

JESSICA So isn’t this just basically a sot to mineral companies and mining companies?

SIMON No, I don’t think so. In fact, I think what’s also true is this is best practice. You look at Australia, you look at other countries, they already do this. We’re also, I think, here filling a gap in the sense that to the Territorial Sea – that’s 12 miles out – you already have these sorts of provisions. Even the Exclusive Economic Zone, as I say, a massive area – 4 million-odd square kilometres – there are some provisions for oil rigs and so on. But for these moving vessels, where it was very dangerous and we thought so, that’s where we’re acting.

JESSICA Was this prompted by the Elvis Teddy case?

SIMON Look, that’s certainly part of the genesis of this.

JESSICA Well, that’s interesting because Phil Heatley said, ‘Protest action played no part in the company’s decision to quit New Zealand.’ So what does it even matter?


At which point, Jessica Mutch laid it on for Bridges, who could only deny, deny, deny,


JESSICA Are you basically trying to send a message to mining companies to say, ‘Hey, look, don’t worry. The Government’s got this. We’ll take care of the protesters. Come on down and have a look around’?

SIMON No, because what’s quite clear, as I’ve already said, is that there are many ways that Kiwis can protest if that’s what they want to do – fill their boots with protest. There are many ways they can do that, but as I say, look, when you’re talking about this dangerous kind of activity where lives could be lost, and I’m not putting that too highly, I think it’s right that we make it criminal behaviour and seen as criminal.

JESSICA You’re clearly looking to help out mining companies…


For full transcript, read here: Q+A – Transcript Simon Bridges Interview


Bridges and Key can deny all they like, but the proposed law changes – like the ‘Hobbit Law’, Search and Surveillance Act, etc, are all designed to stifle dissent and increase corporate and State power.


Never mind Labour’s so-called  “Nanny State” that National complained about in 2007 and 2008 – this has the hallmarks of a nasty, petty authoritarian, government.


This is the sort of threatening behaviour we have previously seen from National Ministers. Instances such as Tertiary Education Minister Steven Joyce, who on 27 September 2011,  warned protesting university students to keep their “heads down”,


“My general advice to NZUSA (NZ Union of Students’ Associations) on the cost of living for students is to keep your heads down because actually most people probably think you’re doing OK.”


Acknowledgement: NZ Herald – Minister to students: ‘keep your heads down


If National ministers go ahead with this draconian law, I suspect our jails may soon be filling up with protesters. The ‘martyring’ of protesters is nothing new in this country.


Bridges may find a whole bunch of New Zealanders willing to stand up to this sort of bully-boy tactics.


I suggest he read up on history. Like the 1981 Springbok Tour.


Red Squad anyone?

This blogpost was first published on The Daily Blog on 2 April 2013.








Previous related blogposts


Corporate Welfare under National


Anadarko: Key playing with fire


Petrobras withdraws – sanity prevails


On the smell of an oily rag


Additional reading


Meet Anadarko, The Oil Company Struggling To Get Off The Hook For The Gulf Spill


Judge Rules BP, Anadarko Liable in Gulf Spill


Brazilian oil explorer Petrobras faces refinery pollution charges


Nats plan greater gas and oil exploitation


TVNZ:  Q+A – Transcript Simon Bridges Interview






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