Home > Dollars & Sense, Social Issues, The Body Politic > Confirmed: National welcomes low-wage economy

Confirmed: National welcomes low-wage economy

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From the mouth of our Dear Leader, Prime Minister John Key;

We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007

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

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

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

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

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

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

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

Since 2007, Key has been explicit in his pronouncements; his policy is to see wages rise for New Zealanders. He has made those utterance every year.

Then, on  10 April 2011, on TVNZ’s Q+A, Guyon Espiner interviewed  Bill English and we heard this extraordinary admission from the Finance Minister;

GUYON Can I talk about the real economy for people?  They see the cost of living keep going up.  They see wages really not- if not quite keeping pace with that, certainly not outstripping it much.  I mean, you said at the weekend to the Australia New Zealand Leadership Forum that one of our advantages over Australia was that our wages were 30% cheaper.  I mean, is that an advantage now?

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.

Source

Key responded in his typical fashion that we are all familiar with by now; he blamed the previous Labour government;

We inherited a mess from Labour and a real recession. We have a plan.”

Source

Considering that the previous Labour government had posted eight straight budget surpluses in a row, and paid down most of the country’s sovereign debt – it is unclear just what “mess” Key was referring to.

But as we all know by now, Key has zero hesitation in blaming others – especially the previous government – to avoid taking responsibility for any of his own shortcomings (which, by now, are legion).

So was English correct? Is it deliberate National Party policy to suppress wages in this country?

One might have accepted that English’s comments on Q+A were “mis-interpreted”.

However, two years later, National Party backbench MP, John Hayes, wrote this on his website,

Australian workers will get a 2.6 per cent rise to $A622.20 a week or $NZ750.50 at the prevailing exchange rate. That’s $A16.37 ($NZ19.75) an hour for Aussies’ 38-hour working week compared with $NZ13.75 an hour or $NZ550 for Kiwis’ 40-hour working week. I note that the Labour Party spokesperson on Labour issues is wringing her hands in despair at this news. I think we should celebrate because a rise in the minimum wage in Australia makes our labour force more competitive and will be helpful in attracting investment and jobs to New Zealand. About 18 months ago CHB Mayor Peter Butler and I approached Australian based food processors with the suggestion of moving across the Tasman to establish plants in New Zealand to process food produced under newly irrigated areas. We established that Australian food processors are interested to do this when our new irrigation is in place. A driver from the Australian perspective is that the New Zealand labour force is well educated, more productive and less unionised than their Australian counterparts.” – John Hayes, National MP, 5 June 2013

Bill English’s contention, that lower wages are a desirable means by which to be “so much more competitive” than Australian workers,was no mistake. It has been confirmed as covert National Party policy.

This is further backed up by National’s recent introduction of legislation to “reform” our labour laws.

Firstly, National reintroduced youth rates, euphemistically called the “Starting Out Wage” to young workers. Taking effect on 1 May 2013, the new youth rate cut wages  for  16-to-19-year-olds to  80% of the minimum wage.

National further disempowered workers and undermined their ability to negotiate by implementing the 90 Day “Trial Period”. First introduced in 2009 for small business of up to 20 employees, it was extended to all companies in 2011.

Unsurprisingly, the introduction of the 90 Day Trial Period had no appreciable effect on creating jobs,

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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

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

Which was precisely the same tactic used to implement the 90 Day Trial Period law, by degree,

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 (Source).

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.”

Source

This is indeed a return to the Employment Contracts Act – by stealth. National is too gutless to present such radical plans to the voting public at election time.

This is indeed what National MP, John Hayes was referring to when he stated, 

…A driver from the Australian perspective is that the New Zealand labour force is well educated, more productive and less unionised than their Australian counterparts.”

And if National MP (Botany) Jamie Lee-Ross gets his way with his even more extreme Bill,  employers would be able to legally hire scab labour to replace striking workers .

Quite brazen in his actions, Jami-Lee Ross  admitted that he had colluded with POAL (Ports of Auckland Ltd) bosses to draft his proposed  strike-breaking amendment, the Employment Relations (Continuity of Labour) Amendment Bill.

On TV3′s The Nation on 22 June 2013, Ross confirmed that he had been in talks with employers during the height of the industrial dispute between the POAL and MUNZ (Maritime Union).  (source)

Ross’s hatred for Unions is on public record,

Up until recently, cool heads and rational people sitting around negotiating tables have meant that little focus has been placed on the role that unions play in society. However, with the bare-faced mockery that the Maritime Union is making of civilised negotiations New Zealanders will soon begin to question what position unions should hold in the modern Kiwi workplace.

Source

None, it would seem, according to Ross.

Though this radical move may be  a step too far, even for the

Make no mistake, National’s secret agenda is for a low wage economy, with minimal collective protections for workers, and as much power in the hands of employers as they can digest.

National has no other means by which to create jobs.

They intend to rely solely on the “market place”, and to do that, this country’s labour must become “more competitive”.

Translation; our wages must be driven down by any and every means possible.

Just ask Messrs English and Hayes.

Postscript

21 February 2013 MEDIA STATEMENT

AUS-NZ Wage Gap Now $180, More Than A Kiwi’s Daily Pay

How To Work A Four-Day Week? Move To Australia

The wage gap with Australia is now so large that Kiwis across the ditch earn a New Zealander’s weekly pay in just four days, says Labour’s Finance spokesperson David Parker

“The median weekly wage gap with Australia has ballooned by $60 to $180 per week under John Key’s leadership, despite National’s promise to close the gap.

“In Australia the median wage is $1067, in New Zealand it’s $887, according to the latest statistics[1]. To make up the difference Kiwis need to work another full day and another hour on top of that. It’s no surprise 182,000 Kiwis have left under National.

Source

National’s Grand Plan is a roaring success;  in July 2010 the wage gap was $22.36.

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This blogpost was first published on The Daily Blog on 24 December 2013.

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References

TVNZ Q+A: Bill English

TV3: Key blames Labour for his Govt’s wage gap failings

John  Hayes MP for Wairarapa: From the House: 5 June 2013

ODT: Labour law changes announced

Scoop media: Balloted Bill possibly a bridge too far

Green Party: Vulnerable workers’ rights go under National

Scoop media:  Union biting the hand that feeds – Jamie Lee-Ross

Scoop media: AUS-NZ Wage Gap Now $180, More Than A Kiwi’s Daily Pay

Previous related blogposts

Key’s broken promise on raising wages

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

National MP admits collusion with bosses to set up strike-breaking law!!

Hat Tip

Paula Fern

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= fs =

  1. Steve
    28 December 2013 at 10:51 pm

    The first thing National does when elected is to undermine job security for workers. They want people to be grateful for any job on offer….no matter how badly managed or poorly paid.

    They always say they want to increase wages….and then set about doing all they can to reduce them.

    If you vote for National, you’re competing with a wooden post to see who is smartest.

    • 28 December 2013 at 10:56 pm

      Or, as they say, Steve – a race to the bottom.

      Very apt.

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