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Health care workers pay increase – fair-pay or fish-hooks?

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Some Context

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The National Government said that their signature 2010 income tax cut package would be ‘fiscally neutral’ — paid for increased revenues from raising GST. That hasn’t happened. The net cost for tax cuts has been about $2 billion.

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When National claims it must cut spending for vital public services like health and education to control its borrowing, it carries much of the blame.” – former Green Party Co-leader, Dr Russel Norman, 14 May 2012

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The reliance of New Zealand, of all of us, on the emotional umbilical cord between women working as carers and the older people they care for at $13-14 an hour is a form of modern-day slavery.” –  Judy McGregor, Equal opportunities commissioner, 28 May 2012

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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.

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We put the money into cancer care and nursing and various other things. On balance, we think we got that about right.” – John Key, former Prime Minister, 28 May 2012

 

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Cabinet today agreed to a $2 billion pay equity package to be delivered over the next five years to 55,000 care and support workers employed across the aged and residential care sector.”- Bill English, current Prime Minister, 18 April 2017

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The Announcement

On 18 April, Health Minister Dr Jonathan Coleman and Finance Minister, Bill English, announced that healthcare workers in the disability, residential care, and home/community support sector had successfully won their pay-equity claim;

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The response from the trade union movement was positive;

Unions representing care and support workers are pleased to be jointly announcing with government a proposed equal pay settlement to 55,000 workers across the aged residential, disability and home support sectors.

The proposed settlement is a huge win and will make a real difference in valuing the work of care and support workers and the people they support, workers in the sector say. It is a significant step in addressing gender inequality in New Zealand.

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E tū Assistant National Secretary, John Ryall says the offer once ratified will mean a “once in a lifetime pay rise which will end poverty wages for this mainly female workforce and set them on the path to a better life. We’re delighted today’s proposed settlement recognises the justice of Kristine’s case and the wonderful work of Kristine and other professional carers.”

New Zealand Nurses Organisation Industrial Services Manager Cee Payne says that “This equal settlement delivers pay rates that truly reflect the skills and importance of the work that care and support workers undertake every day. Decent pay rates and the right to achieve qualifications will grow and retain skilled workers to care for our elderly. This will build public confidence that high quality care will be delivered to our families’ loved ones in our rest homes and hospitals.”

PSA National Secretary Erin Polaczuk says: “This settlement will make a real difference to our members.  Our members in home support and disability support play a vital role in empowering people to live independent lives in their own communities. This settlement recognises the value of the work they do – and the people they support.”

Unions say the government is to be commended for agreeing to negotiate this settlement offer, rather than waiting for years before the legal process was finally exhausted.

However, there remain unanswered questions to this “deal”.

Questions raised

On 22 April I wrote to Health Minister Coleman;

On 18 April you announced that disability, residential care, and home and community support services will  have their pay increased in a pay-equity settlement costing $2 billion over five years.

In your 18 April press release you stated;

“A care and support worker on the minimum wage with three years’ experience and no qualifications will receive a 27 per cent increase in their hourly wage rate moving from $15.75 to $20 per hour from July 1. That rate would progressively increase to $23 by July 2021 and would rise further if they attain a higher qualification.”

I have some questions regarding this issue, namely;

1. Why was the settlement not back-dated when MPs automatically have their pay-increases backdated? Especially when negotiations with relevant parties was announced nearly two years ago on 20 October 2015 (by yourself) and has been on-going since.

2. Will workers who are deemed to qualify for pay-equity wage increases  be determined solely by their employer?

3. What measures will be put in place to ensure that workers are paid appropriately and pay increases not arbitrarily with-held by employer(s)?

4. You state that the amount of $2 billion will be  “spread over five years” and  increases will be implemented incrementally over an annual basis. If so, how will that incremental amount be determined?

5. If the answer to Q4 is “yes”, will the planned increases be inflation-adjusted, to prevent any increase being watered-down by inflation?

6.Will the settlement amount be increased over time to compensate for annual rises to the Minimum Wage?

7. Will the equal-pay settlement and increase in wages have any impact on future Union-Employer wage negotiations? Or will future negotiations and demands for pay rises be considered a part of the pay-equity settlement?

8. Will NGOs who qualify for the pay equity settlement for their workers have their Budget-allocations cut in other areas?

9. How will pay rises for workers who quality for pay equity settlement impact on contract negotiations with relevant NGOs?

10. You state that “The $2.048 billion settlement over five years will be funded through an increase of $1.856 billion to Vote Health and $192 million to ACC.  ACC levies are set for the coming years, but may possibly increase over the next decade to support this”. If ACC levies rise, will workers who qualify for the settlement be compensated for having to pay an increased ACC levy?

Call me a cynic, but I sense fish-hooks in the detail. When National cut taxes in 2010, they gave with one hand;

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– and took with the other;

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When it comes to fish-hooks, National has prior ‘form’. Even when National announces an ‘increase’ in social spending, it often takes that funding from other areas. Even special-needs children are not exempt from National’s shell-scam, as reported in The Daily Blog  in August last year;

Education Minister, Hekia Parata, revealed that primary and secondary schools’ funding for special needs students would be slashed, and the money re-directed to under-fives. As Radio NZ explained;

The [Cabinet] documents also indicated the government would reduce the amount of special education funding spent in the school sector, and dramatically increase the amount spent on those under the age of five.

“Analysis of the spend by the age range of the recipient indicates that a disproportionate amount of the funds are for school-age children. This is despite clear evidence in some areas that early support can have greater benefits in terms of educational outcomes.”

As implications of Parata’s scheme began to percolate through the education sector, reaction was scathing.

I won’t be celebrating until I read the fine print and get some answers.

Watch out for…

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References

Infonews: Government’s 2010 tax cuts costing $2 billion and counting

Dominion Post: Resthome spy hails saint-like workers

TVNZ News: Cabinet agrees to $2 billion pay equity package for ‘dedicated’ low-paid care workers

Beehive: $2 billion pay equity settlement for 55,000 health care workers

NZCTU: Historic day as caregivers offered equal pay settlement

Beehive: Government to enter negotiations over pay for care and support workers

NZ Herald: Budget 2010 – Experts praise tax cuts for all

NZ Herald:  GST rise will hurt poor the most

Fairfax media: Young workers out of pocket

Fairfax media: Prescription price rise hits vulnerable

Scoop media: Vulnerable children at risk from Family Court fees increase

Radio NZ: Govt to phase out ‘special needs’

Additional

Radio NZ: Settlement could help rest homes attract workers

Employment New Zealand: Previous minimum wage rates

NZ Herald: MPs’ pay rise officially confirmed

Radio NZ: MPs given 2.5 percent pay rise

Other Blogs

No Right Turn: A victory for women

The Daily Blog: Courts finally give the poorest workers what the Government wouldn’t and the Unions couldn’t

The Standard: Thank you health care workers

Werewolf: Gordon Campbell on the aged-care settlement

Previous related blogposts

1 March – No Rest for Striking Workers! (1 March 2012)

No Rest for the Wicked (23 March 2012)

“It’s one of those things we’d love to do if we had the cash” (28 May 2012)

Roads, grandma, and John Key (18 July 2012)

John Key’s track record on raising wages – 4. Rest Home Workers (11 November 2012)

Aged Care: The Price of Compassion (16 November 2012)

That was Then, This is Now #22 – Lowest wages vs Highest wages (31 January 2014)

The consequences of tax-cuts – worker exploitation? (31 October 2015)

Special Education Funding – Robbing Peter, Paul, and Mary to pay Tom, Dick, and Harriet (27 August 2016)

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This blogpost was first published on The Daily Blog on 23 April 2017.

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The Rise and Rise of Daddy State: MSD blackmails NGOs for private data

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Nanny State takes a Shower

What do showers have to do with this issue?

Wait and see.

Spying, Spooks, and Silly Journos

Nearly five years ago, the highly controversial Search and Surveillance Act 2012 was passed by National. As reported at the time;

The Search and Surveillance Act, which was passed through Parliament in March, extends production and examination orders to the police and legalises some forms of surveillance.

It will let more government agencies carry out surveillance operations, allows judges to determine whether journalists can protect their sources, and changes the right to silence.

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Police could complete some forms of surveillance and searches without warrants, but [Police Assistant Commissioner Malcolm] Burgess said the situations were pretty common sense.

Yes, indeed. Police surveillance and seizure powers were being massively extended. But according to the Police Commissioner, citizens could rely on the Police using “pretty common sense” to use them.

Then-Justice Minister, Judith Collins offered this excuse for the extension of police powers;

The new Search and Surveillance Act 2012 brings “order, certainty, clarity and consistency” to messy, unclear and outdated search and surveillance laws.

(Interestingly, the fact that Collins felt the need to use irony-quotation-marks, in her Beehive statement, to enclose the phrase order, certainty, clarity and consistency is revealing.)

This is the same Judith Collins who, in 2009, passed personal phone numbers of a civil servant to far-right blogger, Cameron “Whaleoil” Slater.

A year later,  the Government Communications Security Bureau and Related Legislation Amendment Bill  was being hotly debated throughout the country.

Essentially, the Bill (since passed into law), would allow the GCSB to spy on New Zealand citizens which up to then had been the sole province of the NZ SIS.

National’s  ‘spinned message’ – constantly parroted by Dear  Leader Key – was;

In addition, the Act governing the GCSB is not fit for purpose and probably never has been.  It was not until this review was undertaken that the extent of this inadequacy was known

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The advice we have recently received from the Solicitor-General is that there are difficulties interpreting the legislation and there is a risk some longstanding practices of providing assistance to other agencies would not be found to be lawful.

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It is absolutely critical the GCSB has a clear legal framework to operate within.”

In fact, the law was clear with it’s wording and intent and Section 14 of the Act (since altered to reflect the Amendment) stated with crystal clarity;

14Interceptions not to target domestic communications
  • Neither the Director, nor an employee of the Bureau, nor a person acting on behalf of the Bureau may authorise or take any action for the purpose of intercepting the communications of a person (not being a foreign organisation or a foreign person) who is a New Zealand citizen or a permanent resident.

Some journalists were too lazy to fact-check Key’s lies;

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Journalists who failed to realise that Key was being disingenuous, and simply parroted the government’s official spin, did immense damage to public understanding of the issues involved.

Others, like Audrey Young and Tracy Watkins were sufficiently experienced and knowledgeable to recognise a government ‘stitch-up’ when they saw it;

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“ The GCSB Act 2003 expressly forbids it from spying on the communications of New Zealanders.  But, by a series of snakes and ladders through the stated functions and objectives of the act, it convinced itself it was allowed to help the SIS and police spy on New Zealanders.” – Audrey Young, 26 June 2013

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“ The GCSB’s interpretation of the law was so loose it managed to spy on 88 New Zealanders even though the law specifically stated it was not allowed to do so.” – Tracy Watkins, 3 August 2013

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National ignored strong public opinion wary of extending the GCSB’s surveillance powers. The Bill became law on 26 August 2013.

The Government Communications Security Bureau and Related Legislation Amendment Act was followed by the Telecommunications (Interception Capability and Security) Act (TICS), made law on 11 November 2013.

The TICS law made it mandatory for all electronic communications companies (telcos) to comply with spy  agencies demands to  intercept and decrypt phone calls, txt-messages, and emails.

The excuse for this piece of intrusive legislation from Communications Minister, Amy Adams;

“ The fundamental reason that I have sought to introduce this bill is to safeguard New Zealand public safety and security. ”

The Telecommunications (Interception Capability and Security) Act was, in turn, followed by the Countering Terrorist Fighters Legislation Bill (split into several Bills after it’s Second Reading in Parliament on  9 December 2014).

This Bill, covering  three existing laws, allowed the  SIS  to conduct surveillance on terrorist suspects without requiring a judicial a warrant for up to 24 hours; to conduct secret video surveillance on private property; gave SIS access to Customs Department data in relation to suspected terrorism, and allowed the  Minister of Internal Affairs increased  powers to arbitrarily suspend or  cancel a passport.

The Labour Party were so opposed to this law change  that they voted for it. (NZ First, the Maori Party, and the Greens,  to their credit, voted against it.)

Then Dear Leader  Key used the usual “defending Kiwis against terrorist” bogeyman to justify the State’s growing surveillance powers;

“ The threats faced by New Zealand have grown and it is important that we have the ability to respond to that. The Government has a responsibility to protect New Zealanders at home and abroad…”

Simultaneously in 2014, the IRD signed an agreement to share data with the Police;

Taxpayer information is required to administer New Zealand’s tax system effectively. This information can be supplied by taxpayers, or it can be collected by Inland Revenue during an audit.

Broadly, the government’s current legislative position is that this information is not shared with other government departments on the basis that it is ‘tax secret’.

However, there are instances where sharing taxpayer information relating to serious crime could bring offenders to justice, support the goals of other government departments, and offer the State broad efficiencies.

Up until that point, the IRD expected everyone who earned money – whether from legal or illegal mean – to pay tax. This meant that, for example, sex workers prior to 2003 would be expected to pay tax on their earnings regardless of the fact it was an illegal activity.

The tax department didn’t care where or how the money was earned – they just wanted their “fare share”.

After 2014, the IRD abandoned that policy, and data-sharing with Police was implemented. It means that taxing other illegal activities such as the production and sale of cannabis, is no longer feasible. This has unintentional consequences – such as the hoarding of cash; use of firearms to protect that cash; and violence.

This is part of an on-going wider process of government departments sharing private information with each other.

The Government Communications Security Bureau and Related Legislation Amendment Act, Telecommunications (Interception Capability and Security) Act, and Countering Terrorist Fighters Legislation Bill all follow on from previous extensions of State power, notably  the  Terrorism Suppression Act 2002.

This poorly thought-out law was Labour’s contribution to George Bush’s ill-conceived “War on Terror”.

Throughout National’s three terms in office, it has extended Police powers; widened the scope for the GCSB and SIS to spy on New Zealanders; and created a vast data-sharing network amongst it’s bureaucracy.

MSD, NGOs, and Demands for Data

To date, New Zealanders have been mostly apathetic as the government build up it’s ability to spy and store personal information on us. Most of the government’s “targets” have been so-called “terrorists”, immigrants, criminals, student-debt defaulters, and those on welfare benefits or living in state houses.

Most of Middle New Zealand find it difficult to identify with these elements of our society.

Recently, however, Radio NZ has been running a series of stories and interviews on a disturbing development regarding state aquisition of personal information.

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On 2 March, on Radio NZ’s Nine To Noon programme, Kathryn Ryan interviewed Brenda Pilott, the chairperson  of ComVoices (an umbrella organisation for NGOs).

At issue was the disturbing revelation that the Ministry of Social Development (MSD), presumably under direction from National ministers,  was forcing NGOs to collect and pass  private information about their clients back to the Ministry,  in return for on-going funding. This proviso was to be written into new contracts set to take effect in July this year after negotiations had concluded after Easter.

>Kathryn Ryan interviews Brenda Pilott – 2 March<

Accordingly to Comvoices, NGOs were expected  to pass on;

  • names of clients
  • birth dates
  • ethnicity
  • other personal details such as dependent children’s names

NGOs that refused to share this information with MSD would forego funding. The result would be predictable;

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According to Brenda Pilot, the Ministry’s excuse to demand this data was;

“ They want to be able to find out what services are effective. And that this will provide information over time that will  allow sensible decisions to be made about government funding and where to apply that funding.”

Ms Pilot voiced concerns that private, identifiable  information would be used for tracking individuals who used NGO services. She said that vulnerable people needing to use services such as counselling, Women’s Refuge, Rape Crisis, etc, would be reluctant to engage those organisations and would “walk away”. Ms Pilot was concerned that passing personal, identifiable data to MSD would force NGOs to violate Privacy Laws.

Ms Pilot said that the Privacy Commissioner was also concerned at MSD’s intentions to obtain such data, and was investigating. She said the Commissioner would most likely report on the issue by the end of this month.

On 3 March, Radio NZ reported; grave concerns held by at least one NGO, Women’s Refuge;

Women’s Refuge chief executive Ang Jury said agencies would have to abide by the contract change if they wanted to keep their funding.

“If agencies choose not to share this information they won’t be contracting with the ministry. That’s pretty much where it sits.”

Dr Jury said it was not an ideal situation for the refuge but they were not in a position to say no.

“This is not something that we would happily go out and say, ‘yes, this is exactly what we want to do’.

“If it is going to happen, our job now is to make sure we get the sort of safeguards built around that information that we need to keep our women and children safe,” she said.

At least one privacy lawyer doubted the legality of MSD’s demands;

Privacy lawyer Kathryn Dalziel said the Ministry of Social Development (MSD) looked to be on shaky ground.

“This is a potential breach of privacy because they don’t appear to have identified, anywhere, the purposes for which they are collecting that information.

“There doesn’t seem to be any transparency around it … I also don’t think it’s fair,” she said.

“Principle 2 of the Privacy Act says that if you want to collect information from third party, you have to have a good reason.

“You also have to have … lawful and reasonable purposes for collecting that information in the first place. Now, none of that has been done.”

However, what really raised fears was Ministry of Social Development deputy chief executive, Murray Edridge’s responses to Kathryn Ryan’s  questions. His answers not only failed to reassure, but raised serious concerns as to MSD’s intentions regarding the storage and end-use of personalised, identifiable data.

>Ministry responds to privacy concerns – 3 March<

Edridge parroted the usual monetarist rhetoric of  “the New Zealand public demands that government spend it’s money well”.

When Ms Ryan  put it to Edridge that MSD was attempting to track NGO service-users, he denied it;

“ No we’re not tracking them. What we’re doing is we’re saying to providers, look, for us to understand the effectiveness of services, to understand where the resources are best invested, where we will decide between priorities in terms of investment we need to understand who the people are and what value they get from the services. For some time we’d had concern that investment’s been made in social services where they’re not the most effective mechanism for the people that require them, and this is part of the mechanism by which we understand the clientele better and we understand how we can serve them better and invest in services that are going to support them.”

When Ms Ryan put it to Edridge that anonymised data would work just as well, Edridge kept referring back to needing to know “who these people are“.

Moments later, Edridge contradicted himself by admitting “we know who the clients are, we know all about them“. If that wasn’t creepy enough, Ms Ryan then asked Edridge why MSD demanded further information about NGO service-users. She asked why MSD needed to know who was approaching  (for example) Women’s Refuge for assistance..

Edridge’s response was further contradictory and throughout the twelve minute interview he could provide no satisfactory answer why MSD was requiring personalised data from NGOs. At one point he attempted to cloud the issue by stating that MSD required “demographic information”.

Ms Ryan dismissed that claim by remind Edridge that MSD was seeking names, addresses, ethnicities, children’s names and that was not simply “demographic information”.

When Ms Ryan suggested that NGO service-users might not want their details passed on to MSD or other ministeries, Edridge could only respond,

“ Well, we need to know where to get the money in the right place.”

Four days later, Rape Crisis draw a line in the sand and announced it would  flat out decline to sign contracts with MSD  in return for  passing private information about service-users in exchange for on-going funding.

>Rape Crisis reject “data-for-funding” contracts – 7 March<

By 16 March, pressure on MSD and Minister Tolley was such that the ministry caved, and was forced to step back from demanding personalised data from some NGOs dealing with sexual violence.

>Temporary reprieve over ‘private data for funding’ contracts – 16 March<

The “reprieve”, however, was only temporary, and would last for only one year until MSD “works out how to securely collect and store their clients’ private data”. It also did not apply to all NGOs.

The Creep of Big Brother and the Daddy State

Up till this point, data-collection has centered on those who come in contact with the Justice system; WINZ beneficiaries; and Housing NZ tenants. These are generally New Zealanders who are usually the most deprived and vulnerable socially and financially, and rely on State assistance to survive.

A person seeking help from WINZ and Housing NZ is forced to supply both ministeries their private data. To refuse means no help. Next stop; the street;

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A citizen in contact with the Justice system has even less option to refuse to provide private data.

MSD’s demand for personalised data from NGO service-users marks a new stage in National’s slow advancement in building a data-base on every person in the country.

NGO service users may not necessarily be unemployed beneficiaries or live in state houses or have broken the law in some way – but their details will still be required to be collected and supplied to the Ministry of Social Development.

The ministry has assumed the de facto role of collecting and storing data on New Zealanders who – up till this point – may never have come into contact with any governmental organisation such as Housing NZ, WINZ, or Police.

The implications of this are staggering.

The net to scoop up data on as many citizens as possible, has just widened considerably.

If you think you – the reader – may never need the services of Women’s Refuge or Rape Crisis, consider for a moment that there are thousands  of NGOs operating in this country and hundreds that are funded by the State.

Victim Support is just one state-funded NGO;

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So if you’ve just become a victim of a crime; Victim Support enters your life;  the State now has your personal data on file;

  • Client: Name, address, gender, date of birth, primary ethnicity, Iwi.
  • Dependents: Name, date of birth, relationship to client.
  • Service Level: Information Programme/service name, start date and end date.”

Middle-class New Zealanders who may never have had cause to have personal data collected on them may soon be on file with various ministeries.  With data-sharing, personal information from MSD can end up throughout other ministeries. Or on the desks of ministers;

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Never mind “Nanny State” – this is the muscular arm of Daddy State flexing it’s strength to reach out to grab more and more of our private information.

And it won’t end with this.

Not until we say “Enough is enough. No more“.

Back to Showers

Remember this?

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In the lead-up to the 2008 general election, National attacked the then-Labour Government for  “Nanny Statism”.

Following on from a disastrous drought in 2007 that cost the country’s economy  over $2.8 billion (in 2008/09 dollars), the then-Labour government sought out ways and means to  conserve water. The alternative was the possibility of further water-shortages or costly storage and irrigation systems. Labour opted for conservation. This included measures to save water in residential areas.

It could be  suggested that water-saving shower heads and energy-efficient light-bulbs are the least of our concerns.  National has surpassed anything that Labour envisaged, as this government  reaches further and further into our private lives.

If there is one thing that history has taught us – governments that spy on their own people do not trust their people, and are fearful of them.

National must be very frightened of us.

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References

NZ Legislation: Search and Surveillance Act 2012

NZ Herald: New police search and surveillance law in force

Beehive: Search and Surveillance Bill becomes law

Radio NZ: Collins defends giving details to blogger

NZ Legislation: Government Communications Security Bureau and Related Legislation Amendment Bill

Beehive: John Key – PM releases report into GCSB compliance

Legislation.govt.nz:  Government Communications Security Bureau Act 2003

NZ Herald:  Spying on NZ: More power to watch us

Dominion Post:  Spy bungles start to entangle PM

Fairfax media: Kiwis do care, prime minister

Parliament: Government Communications Security Bureau Amendment Bill

Parliament: Telecommunications (Interception Capability and Security) Bill

Fairfax: Spying bill passes into law

Parliament: Telecommunications (Interception Capability and Security) Bill — Third Reading

Parliament: Countering Terrorist Fighters Legislation Bill

NZ Herald: Foreign fighters bill passes 94 – 27

Fairfax media: Labour backs anti-terror laws, despite attacking it

IRD: Information sharing with New Zealand Police

IRD: Cross-government Information-sharing to Identify, Stop or Disrupt Serious Crime

MacNicol & Co: Tax News – IRD to share information with police

NZ Legislation: Terrorism Suppression Act 2002

Wikipedia: Terrorism Suppression Act 2002

Radio NZ: Government demands private data from NGOs

NZ Family Violence Clearinghouse: Relationships Aotearoa to close; funding models and issues in spotlight

Radio NZ: Govt on shaky ground over data-for-funding contracts, lawyers say

Radio NZ: Rape Crisis reject “data-for-funding” contracts

Radio NZ: Temporary reprieve over ‘private data for funding’ contracts

Comvoices: HomePage

Victim Support: Where does your funding come from?

NZ Family Violence Clearinghouse: MSD to require individual client level data from community agencies

NZ Herald: Bennett gets tough with outspoken solo mums

Dominion Post: Minister defends releasing private details

Fairfax media: Bennett won’t rule out releasing beneficiary details

Scoop: Showers latest target of Labour’s nanny state

NIWA: 2007 – much drier than average in many places

Beehive: Drought costs NZ $2.8 billion

Additional

Fairfax media: UN privacy expert slams government stance on privacy and ‘big data’

Other Blogs

The Standard: Social investment meets the surveillance state

Previous related blogposts

OIA Request points to beneficiary beat-up by Minister Chester Borrows

Audrey Young, Two Bains, old cars, and… cocoa?!?!

National Party president complains of covert filming – oh the rich irony!

An Open Message to the GCSB, SIS, NSA, and Uncle Tom Cobbly

Dear Leader, GCSB, and Kiwis in Wonderland

One Dunedinite’s response to the passing of the GCSB Bill

The GCSB Act – Tracy Watkins gets it right

The GCSB Act – some history

The GCSB – when plain english simply won’t do

The GCSB law – vague or crystal clear?

The Mendacities of Mr Key #1: The GCSB Bill

Campbell Live on the GCSB – latest revelations – TV3 – 20 May 2014

The real reason for the GCSB Bill

Letter to the Editor: John Campbell expose on Key and GCSB

A letter to the Dominion Post on the GCSB

Big Bro’ is Watching You!

The GCSB law – Oh FFS!!!

Dear Michael Cullen: the GCSB is not International Rescue!

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This blogpost was first published on The Daily Blog on 20 March 2017.

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2017 – Ongoing jobless tally

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Unemployment logo

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Continued from: 2016 – Ongoing jobless tally

By the numbers, for this year;

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January

February

March

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Unemployment Statistics* at a Glance

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(*  See caveat below)

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Caution: Official Unemployment Statistics

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On 29 June 2016, Statistic NZ announced that it would be changing the manner in which it defined a jobseeker. This   so-called “revision”  would materially affect how unemployment stats were counted and reported;

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Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate
  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent
  • Increases in the number of people not in the labour force
  • Decreases in the size of the labour force and the labour force participation rate

When Statistics NZ ‘re-jigged’ its criteria for measuring unemployment in June, unemployment dropped from 5.7% to 5.2% (subsequently revised again down to 5.1%).

All  unemployment data from Statistics NZ should therefore be treated with caution. Unemployment is  likely to be  much higher than Statistics NZ figures indicate.

 

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References

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

Statistics NZ: Labour Market Statistics – June 2016 quarter

Trading Economics: New Zealand Unemployment Rate  to January 2017

Previous related blogpost

Lies, Damned lies and Statistical Lies

National exploits fudged Statistics NZ unemployment figures

Lies, Damned lies and Statistical Lies – ** UPDATE **

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

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The Mendacities of Mr English – The covert agenda of high immigration

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if-you-repeat-a-lie-often-enough

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Context

Bill English was recently caught on-the-spot when challenged why National was permitting high immigration at a time when unemployment was still high, and rising.

Make no mistake, National has opened the floodgates of immigration because it is an easy way to artificially  stimulate the economy. This was pointed out in May 2011,  by then-Immigration Minister, Jonathan Coleman, who trumpeted the contribution made by immigration to economic growth;

“All of us have a vested interest in immigration and I’m pleased to share with you some specific actions the Government is taking to enhance Immigration’s contribution to the economy, service improvement and changes to business migration.

[…]

…I’m confident that you will acknowledge the partnership approach that Immigration is now taking to provide tangible improvements to help support New Zealand’s economic growth.

[…]

Considering the economic challenges the country faces, lifting immigration’s economic contribution takes on more importance.”

Justifying the need for high immigration to generate  economic growth, Coleman cited “New Zealand [going] into deficit in 2009 after several years of surpluses and the economic situation has been compounded by the September and February earthquakes” and unsustainably “borrowing $300 million dollars a week to keep public services ticking over“.

Coleman  admitted that “If we were to close off immigration entirely by 2021… GDP would drop by 11.3 per cent“. He revealed that, “new migrants add an estimated $1.9 billion to the New Zealand economy every year“.

Easy money.

The downside to high immigration has been to put strain on critical services such as roading and housing, and reduce demand for locally trained workers to fill vacancies. There is a downward pressure on wages, as cheaper immigrant-labour is brought into the workforce.

As Treasury pointed out in June last year;

“There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete.”

Faced with increasingly negative indicators from high immigration, English was forced to explain why we were seeing high immigration at a time of rising unemployment;

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English’s response was predictable if not offensive.

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Playing National’s Blame Game

As per  usual strategy, English defaulted to National’s strategy of Default Blame-gaming. When in trouble;

  1. Blame the previous Labour government
  2. Blame ‘welfare abuse’/Release a ‘welfare abuse’ story in the media
  3. Blame Global Financial Crisis or similar overseas event

(If the trouble is Auckland-centered, Default #4: Blame Auckland Council/RMA/both.)

This has been the pattern of National’s policy to shift blame elsewhere for it’s consistently ineffectual policies;

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national-and-john-key-blames

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The Blame Gaming was applied recently to National’s appalling do-nothing record on housing;

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housing-crisis-national-blame-game

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Resorting to Deflection #2, English had the cheek to blame young unemployed for our high immigration level;

One of the hurdles these days is just passing the drug test … Under workplace safety, you can’t have people on your premises under the influence of drugs and a lot of our younger people can’t pass that test.

People telling me they open for applications, they get people turning up and it’s hard to get someone to be able to pass the test – it’s just one example.

So look if you get around the stories, you’ll hear lots of stories – some good, some not so good – about Kiwis’ willingness and ability to do the jobs that are available.”

His comments on 27 February were echoing previous, similar sentiments in April last year, when he again abused unemployed workers as “hopeless”;

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Quite rightly, English’s comments were condemned by many. English admitted that his comments were based solely on “anecdotal evidence” . This is the worst form of evidence possible as absolutely no confirmation by way of actual, real data is involved. “Anecdotal evidence” panders to prejudice – a  difficult thing to shift even when real evidence proves to the contrary.

Real evidence surfaced only a day after English made his slurs against the unemployed, when it was revealed that out of over 90,000 (approx) welfare beneficiaries, only 466 failed pre-employment drug tests over a  three year period. That equates to roughly to 155 failed tests out of 30,000 per year.

As Radio NZ’s Benedict Collins reported;

Government figures show beneficiaries have failed only 466 pre-employment drug tests in the past three years.

[…]

The Ministry of Social Development said the 466 included those who failed and those who refused to take the test.

Some failed more than once.

The ministry did not have the total figure for how many tests were done over the three years, but said there were 32,000 pre-employment drug tests in 2015.

Those 466 over a three year period consisted of (a) those who failed the test, (b) those who refused to take the test, and (c) some failing more than once.

Put another way, 155 failed tests out of 30,000 per year  equates to half a percent fail rate.

Which means that 99.5% of beneficiaries are clean, according to MSD’s own collected data.

There was further confirmation of low fail rates from another media story. On the same day as the Ministry of Social Development released it’s data on failed drug tests, The Drug Detection Agency revealed that fail-rates were as low as 5%;

While the rate of positive tests has remained at about 5 percent, the company is doing more tests and therefore failing more people, said its chief executive, Kirk Hardy.

“We’ve seen an increase overall in our drug testing and we now, annually, conduct about 144,000 drug tests,” he said.

Looked at another way, 95% of the workforce was clean.

Which simply confirms Bill English to be the typical manipulating, lying, politician that the public so consistently distrust and despise.

However, English has his own  sound reasoning for blaming welfare beneficiaries for this country’s immigration-caused problems. He has to do it to obscure the two reasons why National has opened the tap on immigration as far as they can possibly get away with…

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Cargo-cult Economics

Remember that in May 2011,   then-Immigration Minister, Jonathan Coleman revealed;

If we were to close off immigration entirely by 2021… GDP would drop by 11.3 per cent“.

A 11.3% fall in GDP would have pushed New Zealand into a deep recession, matching that of the early 1990s.

This was especially the case as only a few years ago the economy was suffering with an over-valued New Zealand dollar. Manufacturing and exports had slumped;

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Combined with the multi-billion dollar Christchurch re-build, mass-immigration was National’s “quick-fix” solution to boosting the economy. It might cause problems further down the track, but those were matters that National could address later. Or better still, leave for an incoming Labour-Green government to clean up the resulting socio-economic mess.

This is  quasi-cargo-cult economics, 21st century style.

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The Not-so-Free-Market

In Coleman’s May 2011 speech, he also referred – indirectly – to the second rationale for opening the floodgates of mass-immigration;

If we were to close off immigration entirely by 2021… The available labour force would drop 10.9 per cent

This was critical for National.

A crucial tenet of free market capitalism  (aka neo-liberalism) is that the price of labour (wages and other remuneration) should be predicated on supply and demand;

The higher the wage rate, the lower the demand for labour. Hence, the demand for labour curve slopes downwards. As in all markets, a downward sloping demand curve can be explained by reference to the income and substitution effects.

At higher wages, firms look to substitute capital for labour, or cheaper labour for the relatively expensive labour. In addition, if firms carry on using the same quantity of labour, their labour costs will rise and their income (profits) will fall. For both reasons, demand for labour will fall as wages rise.

Note the part; “At higher wages, firms look to substitute capital for labour, or cheaper labour for the relatively expensive labour“.

Mass immigration may or may not supply cheaper labour per se, but more people chasing a finite number of jobs inevitably “stabilises” or even drives down wages, as migrants compete with local workers. As pointed out previously, this is precisely what Treasury warned off in June last year;

“There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete.”

National is wary of wages rising, thereby creating  a new wage-price inflationary spiral, reminiscent of the 1970s and 1980s. English said as much on TVNZ’s Q+A in April 2011;

Guyon Espiner:  “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 English:  “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.

[…]

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.

[…]

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.”

National is circumventing their own neo-liberal ideology by importing large numbers of workers, to drive down wages (or at least permit only modest growth).

In times of scarce labour, wages should grow. Demand. Supply.

This is the counter to recessionary-times, such as the 2008 Global Financial Crisis, when wages remain static, or fall, due to heightened job losses and rising unemployment. Supply. Demand.

But National is subverting the free market process by ‘flooding the labour market’ with immigrant labour. The price of labour cannot rise because National has interfered with the process of supply  by widening the field of the labour market. The labour market is no longer contained with the sovereign borders of our state.

This reveals “free market economics” to be a fraud. It is permitted to work unfettered only when it benefits the One Percent, their business interests, and their ruling right-wing puppets.

The moment there is a whiff that the “free market” might benefit workers – the goal-posts are shifted. (Just ask Nick Smith about shifting goal-posts.)

The game is fixed. The dice are loaded. We cannot hope to beat the House at their game.

Time to change the game.

Inevitable Conclusion

Welfare beneficiaries. Drugs. Drug testing.  It was never about any of those.

The real agenda is for National to create a false impression of economic growth and reign-in wage growth, through immigration. Anything which threatens to expose their covert agenda is to be countered. Especially before it becomes fixed in the public consciousness.

Welfare beneficiaries are very useful as National’s go-to scapegoats. Or herring of a certain hue…

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Postscript: A case of REAL workplace drug abuse

Meanwhile, in what must constitute the worst case of workplace drug abuse, took place on 14 June 1984;

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…Muldoon had made up his mind.  In one of the biggest miscalculations in our political history he decided that he would go to the country. At 11.15pm a visibly intoxicated Muldoon made his announcement to waiting journalists.

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References

NZ Herald: Beyond the fear factor – New Kiwis can be good for us all

Fairfax media: NZ unemployment jumps to 5.2 per cent, as job market brings more into workforce

Fairfax media: New Zealand’s economic growth driven almost exclusively by rising population

Beehive: Immigration New Zealand’s contribution to growing the economy

NZ Herald: Budget 2016 – Feeling the Pressure

NZ Herald: Treasury warns of risk to jobs from immigration

TV3 News:  Bill English blames unemployment on drug tests

Radio NZ: Employers still struggling to hire NZers due to drug use – PM

Radio NZ: Farmers agree Kiwi farm labourers ‘hopeless’

Radio NZ: Tens of thousands drug-tested, hundreds fail

Radio NZ: Drug use not the whole worker shortage story – employer

NZ Herald: Willie Apiata our most trusted again

Radio NZ: Exporters tell inquiry of threat from high dollar

Wikipedia: Cargo cult economics

Economics Online: The demand for labour

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

Radio NZ: Unemployment rises, wage growth subdued

Statistics NZ: When times are tough, wage growth slows 

Fairfax media: Shock rise in unemployment to 7.3pc

TVNZ: Frontier Of Dreams – 1984 Snap Election

Additional

TV3 News: Government gets thumbs down on housing

Other Blogs

The Standard: English hammered on druggies smear

Previous related blogposts

Election ’17 Countdown: The Promise of Nirvana to come

When National is under attack – Deflect, deflect, deflect!

National under attack – defaults to Deflection #2

National under attack – defaults to Deflection #1

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This blogpost was first published on The Daily Blog on 5 March 2017.

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Election ’17 Countdown: Joyce – let the lolly scramble begin!

25 February 2017 1 comment

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(Or, “Under-funded health, education, and other social services? Let them eat tax-cut cake!”)

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2017 Election – Opening Gambits and Giveaways

You can tell it’s election year; the lolly-scramble (aka, hint of tax cuts) has begun;

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Historical Context

Cutting taxes (and social services on-the-sly) is one of National’s mainstays when it comes to election promises. Bribes work best when a government has nothing left to offer.

Who can forget the infamous  2008 election campaign, where – despite the Global Financial Crisis firmly taking hold of the New Zealand economy – then-National Party leader, John Key promised tax cuts.

In January 2008;

“We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.

[…]

And we will do all of this while improving the public services that Kiwis have a right to expect. ”

In March 2008, then Finance Minister, Michael Cullen warned against borrowing for tax cuts;

“ Those who would actively choose to drive New Zealand into further debt to pay for tax cuts lack real ambition for our economy…

[…]

Even before these challenges hit home John Key wants to increase our debt to at least 25 per cent of GDP. But he does not pretend he wants to borrow more to pay for more services and he does not really believe he needs to borrow more to pay for roads. He only wants to outspend Labour on tax cuts.

His plan would cost an extra $700 million a year in financing costs alone, around what the government has invested in new health services for each of the last two years.

But the real worry is that Mr Key’s pro-debt policy shows he does not take long-term challenges seriously. His risky deal for tax cuts today would leave the bill to our children and grandchildren tomorrow.”

Undeterred, Key pursued his irresponsible promises and in August 2008 announced to a gullible public;

National will fast track a second round of tax cuts and is likely to increase borrowing to pay for some of its spending promises.

Key made the incredible assertion that tax-cuts would not impact on government debt;

So that will be extremely clear cut and rather hermetically sealed.

Key’s claim of “hermetically sealing” tax cuts from the rest of government fiscal activity was never fully explained, and nor did the MSM ever challenge that unbelievable promise.

In October 2008, Key repeated his fantasy of affordable tax cuts;

Our tax policy is therefore one of responsible reform…  We have ensured that our package  is appropriate for the current economic and fiscal conditions… This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services… National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing’ .

The rest is history. National was elected to power on 8 November and tax cuts implemented in 2009 and 2010. Government borrowing and  debt rocketed;

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A third round scheduled for 2011 was cancelled as the budget blow-out  caused – in-part – by  unaffordable tax-cuts began to hit home even on a profligate National-led administration.

By May 2011, National was borrowing $380 million per week to fund it’s debt. Bill English and John Key seemed startled by the government’s deteriorating financial position;

Finance Minister Bill English said the Government’s financial position had deteriorated “significantly” since late 2008.

“The pre-election update in 2008 forecast that the deficit for this year would be $2.4 billion,” he said.

“It’s much more likely to be around $15b or $16b.”

That level of deficit, as NZPA has previously reported, will be the highest in New Zealand’s history and Mr English confirmed that today.

Prime Minister John Key confirmed the average weekly borrowing figure, which he said was unaffordable.

Michael Cullen’s warnings over unaffordable tax cuts seem to have been long-forgotten as collective amnesia over-took the National Party leadership.

Worse still, it was the rising army of unemployed who were to pay the fiscal bill for National’s profligacy;

More than three quarters of all beneficiaries will be forced to seek work or face cuts to their payments under sweeping recommendations from the Government’s Welfare Working Group… Working group chairwoman, economist Paula Rebstock, said the present high levels of welfare dependency meant major changes were needed. “ There are currently few incentives and little active support for many people reliant on welfare to move into paid work. Long term benefit dependency can be avoided if investments are well targeted and timely…”  Social Development Minister Paula Bennett said the report was an opportunity to change the welfare system and would feed into Government work in the area.

Key indulged in National’s favourite activity when things went horribly wrong after his administration’s apalling policty-decisions. He blamed those at the bottom of the economic heap;

Prime Minister John Key says beneficiaries who resort to food banks do so out of their own “poor choices” rather than because they cannot afford food. “But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills. “And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

By 2016/17, National’s net debt had reached $66.3 billion. (Damn those beneficiaries’ “poor choices”.)

The Joy of Joyce’s Tax Bribe

On 8 February this year, Joyce announced aspects of this year’s coming Budget. Joyce  dangled the tax-cut carrot  in  front of voters;

It is also very important to remain mindful that the money the Government spends comes from hard working Kiwi families. We remain committed to reducing the tax burden on lower and middle income earners when we have the room to do so.

On the same day, Joyce voiced concerns about New Zealand’s massive mountain of private debt;

I have discussed DTIs with the Reserve Bank Governor, who remains concerned about the levels of debt in some households in the context of recent increases in house prices.

Joyce has good reason to be nervous. As of this year, New Zealand’s household debt has reached stellar proportions;

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Any further tax-cuts will not only be based on cuts to social services (health, education, housing, NGOs, etc), but may further fuel the housing bubble.  This would raise the prospect of a monstrous  three-headed creature of National’s making where;

  • it would likely have to have to borrow to fund the tax-cuts,
  • fuel an increase in private debt as tax-cuts are spent on a property-buying binge,
  • as well as driving first-home buyers out of the market as housing-prices take off again.

Joyce voiced this concern on 8 February;

The use of macro-prudential tools can be complex and affect different borrowers in different ways. I am particularly interested in what the impacts could be on first home buyers.”

So further tax cuts may have negative impacts that a fourth National administration would have to deal with if it wins the 23 Sept election.

On top of which, New Zealanders would be faced with further cuts to social services and increasing user-pays in health and education. From our on-going housing crisis;

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… to more user-pays in education;

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…in healthcare;

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… and the gutting of NGO services through budget-cuts;

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When Kiwis take up National’s tax-cut bribes, they end up paying more, elsewhere.

But even slashing the budgets for the state sector and NGOs is insufficient to meet the multi-billion dollar price-tag for tax-cuts.  National is desperately having to scramble to find money where-ever it can. So-called student loan “defaulters” are firmly in National’s eyesights;

Almost 57,000 student loan borrowers found in Australia

The agreement came into force in October and the details of around 10,000 New Zealanders were found in the first data match. The process has since been refined and a total of 56,897 people have now been located.

“These borrowers have a combined loan balance of $1.2 billion and $430 million of that is in default. Inland Revenue will now start chasing up these borrowers and taking action to get their student loan repayments back on track,” says Mr Joyce says.

Mr Woodhouse says “The data shows that more than half of these borrowers left New Zealand over five years ago, with nearly a quarter having been away for more than 10 years. A third of them have not returned to New Zealand in the past four years. One third of the group has had no contact with Inland Revenue, and 43% have not made a payment since they left New Zealand.

“It’s time these people did the right thing and met the obligations they signed up to when they took out their student loan,” Mr Woodhouse says.

Who else will National target to squeeze money out of?

What social services will National slash to fund tax-cuts?

What further user-pays will be implemented?

One further question; if National does not pay down our sovereign debt – how will the country cope with another global financial crisis and shock to our economy? As Joyce himself pointed out;

 

“ We need to keep paying down debt as a percentage of GDP. We’ve set a target of reducing net debt to around 20 per cent of GDP by 2020. That’s to make sure that we can manage any shocks that may come along in the future.”

 

When National took office from Labour, the previous Clark-Cullen government has prudently resisted National’s tantrum-like demands for tax cuts and instead paid down our sovereign debt. As former Dear Leader Key himself was forced to admit;

In 2005, as Leader of the Opposition;

“ Firstly let me start by saying that New Zealand does not face the balance sheet crisis of 1984, or even of the early 1990s. Far from having dangerously high debt levels, gross debt to GDP is around a modest 25 percent and net debt may well be zero by 2008. In other words, there is no longer any balance sheet reason to justify an aggressive privatisation programme of the kind associated with the 1980s Labour Government.

In 2012*, as Prime Minister Key  justified the partial sale of state-owned assets;

The level of public debt in New Zealand was $8 billion when National came into office in 2008.  It’s now $53 billion, and it’s forecast to rise to $72 billion in 2016.  Without selling minority shares in five companies, it would rise to $78 billion.  Our total investment liabilities, which cover both public and private liabilities, are $150 billion – one of the worst in the world because of the high levels of private debt in New Zealand.”

(* No link available. Page removed from National Party website)

With our current debt of $66.3 billion, we no longer have a safety-buffer. That is the current dire state of our government books.

It is astonishing that Joyce has the nick-name of “Mr Fixit”, as he makes irresponsible hints of tax cuts to come.

Little wonder that Joyce’s unearned reputation as “Mr Fix It” was deconstructed by journalist and political analyst, Gordon Campbell;

The myth of competence that’s been woven around Steven Joyce – the Key government’s “Minister of Everything” and “Mr Fixit” – has been disseminated from high-rises to hamlets, across the country. For five years or more, news outlets have willingly (and non-ironically) promoted the legend of Mr Fixit…

[…]

Of late however, the legend has lost some of its lustre. More than anything, it has been his handling of the SkyCity convention deal that has confirmed a lingering Beltway suspicion that Joyce’s reputation for business nous has been something of a selfie, with his competence appearing to be inversely proportional to his sense of self-esteem. Matthew Hooton’s recent critique of Joyce in NBR – which was inspired by how the SkyCity convention deal had cruelly exposed Joyce’s lack of business acumen – got a good deal of traction for that reason. On similar grounds, Joyce’s penchant for (a) micro-managing and (b) the prioritising of issues in terms of their headline potential has resulted in his ministerial office becoming somewhat notorious around Parliament for (c) its congested inefficiency and for (d) a not-unrelated extent of staff burnout.

[…]

Not only is Joyce’s ministerial office renowned as an administrative bottleneck – where issues tend to be ranked in terms of their p.r. potential for the Minister – none of this seems to be in service of any wider goal or vision. As Mr Fixit, Joyce tends to be engaged in the equivalents of blown fuses and leaking taps – rather in the re-design of the political architecture. Joyce has simply never been – and has never pretended to be – a big picture kind of politician. He has been never someone with an abiding interest in – or the intellectual stamina for – systemic change.

The re-election of National this year – by any means necessary, whether beneficial to New Zealand or not, no matter what the social or financial costs – appears to be ‘Mr Fixit’s’  latest ‘DIY’ project.

And like most DIY budgets, wait for the blow out.

Just like 2009.

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References

Interest.co.nz: Finance Minister says Government remains ‘committed to reducing the tax burden

Scoop media: Tax cuts still in the mix for Joyce’s first budget

Sharechat: Tax cuts still in the mix for Finance Minister Steven Joyce’s first budget

Radio NZ: Budget date set, tax cuts likely

NBR: Government hints at tax cuts in Budget 2017

Fairfax media: Joyce signals low and middle earners’ top rates target for tax cuts

NZ Herald:  The Economy Hub – About those tax cuts… Steven Joyce, the big interview

NZ Herald: John Key – State of the Nation speech

Scoop media: Government will not borrow for tax cuts

NZ Herald: Nats to borrow for other spending – but not tax cuts

Guide2: National Party – Tax Policy

NZ Treasury: Financial Statements of the Government of New Zealand for the Year Ended 30 June 2010 – Debt

NBR: Tax cuts scrapped in budget

Interest.co.nz: Budget deficit worse than forecast; debt blows out by NZ$15.4 bln

NZ Herald: Govt borrowing $380m a week

Fairfax media: Extensive welfare shake-up needed – report

NZ Herald: Food parcel families made poor choices, says Key

NZ Treasury: Budget Economic and Fiscal Update 2016

Beehive: 2017 Budget to be presented on 25 May

Beehive: Finance Minister requests cost-benefit analysis on DTIs

NZ Herald: New Zealand residential property hits $1 trillion mark

Beehive: Almost 57,000 student loan borrowers found in Australia

Scoop media: John Key Speech – State Sector Under National

Werewolf: The Myth of Steven Joyce

Other Blogs

The Hand Mirror: A crack in the wall

Previous related blogposts

Tax cuts & school children

Letter to the editor: Setting it straight on user-pays in tertiary education

Letter to the Editor: tax cuts bribes? Are we smarter than that?

The Mendacities of Mr Key #3: tax cuts

The Mendacities of Mr Key # 19: Tax Cuts Galore! Money Scramble!

The Mendacities of Mr English – Social Services under National’s tender mercies

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This blogpost was first published on The Daily Blog on 20 February 2017.

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The Mendacities of Mr English – Social Services under National’s tender mercies

12 February 2017 2 comments

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Context

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On 25 January, as Radio NZ returned to it’s normal broadcasting schedule (and putting away it’s dumbed-down “summer programming” until next December/January), John Campbell had his first interview with John Key’s replacement, Bill English.

Campbell raised several issues with English; the US withdrawal from the TPPA; the Pike River mine disaster; and the housing crisis. At this point, English made this staggering claim;

@ 5.58

“We’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around social investment, around increasing incomes is the right kind of mix – “

English’s bland assertion that “government actually with a good record on addressing, in fact, some of the toughest social issues” is at variance with actual, real, mounting socio-economic problems in this country.

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Key indicator #1: Unemployment

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The latest HLFS unemployment stats show an increase from 4.9% to 5.2% in the December 2016 Quarter. However, in all likelihood, the unemployment numbers are actually much, much, higher since Statistics NZ arbitrarily altered the way it  calculated what constituted  unemployment.

On 29 June 2016, Statistics NZ announced that it would be changing the manner in which it defined a jobseeker;

Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate

  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent 

  • Increases in the number of people not in the labour force 

  • Decreases in the size of the labour force and the labour force participation rate

The result of this change? At the stroke of a pen, unemployment fell from 5.7% to 5.2% for the March 2016 Quarter (and subsequent Quarters).

If the “current unemployment figures” from Stats NZ are reported as “5.2%’, they may well be back to the original March 2016 figure of 5.7%, before the government statistician re-jigged definitions.

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Key indicator #2: Housing

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– Home Ownership

According to the 1984 NZ  Yearbook, in 1981 the number of rental dwellings numbered 25.4% of housing. 71.2% were owner-occupied. Nearly three quarters of New Zealanders  owned their homes.

Home ownership reached it’s maximum height in 1991, when it stood at 73.8%. Since then, it has steadily declined.

By 2013 (the most recent census survey), the numbers of rental dwellings had increased to 35.2% (up 33.1% in 2006). Home ownership had decreased to  49.9%  (down from  from 54.5% in 2006). If you include housing held in Family Trusts, the figure rises to 64.8% of households owning their home in 2013, down from 66.9% in 2006.

Whether you include housing held in Family Trusts (which may or may not be owner-occupied or rented out), home ownership has fallen steady since the early 1980s.

Renting has increased from 25.4% to 35.2%.

More and more New Zealanders are losing out on the dream of home ownership. Conversely, more and more of us are becoming tenants in our own country.

As Bernard Hickey from Interest.co.nz said in December last year;

Nearly two thirds of the 430,000 households formed since 1991 are tenants.

Think about that for a moment. It is a stunning revelation of how the young and the poor have been hit the hardest by the changes in New Zealand since the mid-1980s, and on an enormous scale.

It means two thirds of the kids born in those families grew up in rental accommodation, and more than 80% of those are private rentals (although the Housing NZ homes are often no better). That means they often grew up in mouldy, damp, cold and insecure housing. It’s true that some homes occupied by their owners are also below par, but it’s a much lower proportion and owners have the option to improve their homes through insulation and ventilation.

The NZ$696 billion increase in the value of New Zealand’s houses to NZ$821 billion between 1991 and 2015 means the 64% of owners in live-in houses have also had plenty of financial flexibility to improve those houses. Renters have had no access to that wealth creation and are not allowed to put a pin in the wall, let alone put in a ventilation system or some batts in the ceiling. The take-up for the Government’s home insulation and heating subsidies were vastly higher among home-owners than they were for landlords.

Those 284,000 renting households formed since 1991 have also often been forced to move schools and communities and all the roots that build families because New Zealand’s rental market is so transient.

[…]

It illustrates the scale of the fallout from that collapse in home ownership from 1991. Not only has it handicapped the education, health and productivity of a entire generation of New Zealanders, but it is set to magnify the likely growth in pension and healthcare costs of our ageing population. And that’s before the wealth and income inequality effects.

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– Affordability

In 2016, the 13th Annual International Demographia International Housing Affordability survey rated New Zealand as one of the most unaffordable housing markets in the world;

The most affordable major housing markets in 2015 are in the United States, with a moderately unaffordable Median Multiple of 3.9, followed by Japan (4.1), the United Kingdom (4.5), Canada (4.7), Ireland (4.7) and Singapore (4.8). Overall, the major housing markets of Australia (6.6), New Zealand (10.0) and China (18.1) are severely unaffordable. (p2)

[…]

In New Zealand, as in Australia, housing had been rated as affordable until approximately a quarter century ago. (p24)

A 2014 report by the NZ Institute for Economic Research stated  the “the average house price rose from the long-run benchmark of three times the average annual household income to six times“;

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The NZIER report refers to several reasons for increasing housing prices; slow supply of land; demographic demand (from ‘Baby Boomers’); and investor demand caused by lack of a capital gains tax. Interestingly, the Report also refers to an “over-supply of finance”;

The loosening of financial standards and rising household debt relative to income has happened over a long period of time. The increase in indebtedness has coincided with rising house prices relative to incomes. This suggests that increased household indebtedness has at least partly contributed to the increasing price of homes. (p14)

Prior to Roger Douglas de-regulating the banking/finance sector, New Zealand banks could only lend depositor’s funds as mortgages.

As a result, mortgage money was “tight”, and scarcity helped keep house prices down. Vendor’s expectations were kept “in check” by scarcity of bank funds. Prior to the mid 1980s, Vendor’s Finance (by way of a Second Mortgage) were commonly-used financial tools to assist house-owners to sell and buyers to complete a purchase.

Once the banking sector was opened up, and monetary policy relaxed, cheap money flooded in from overseas for banks to on-lend to house-purchasers. As property investor, Ollie Newland vividly explained in the 1996 TV documentary, Revolution;

“I got a phone  call from my bank manager to say some bigwigs were coming up from Wellington to have a chat with me. I thought it was just one public relations things they do. I had a very small office, it wasn’t much bigger than a toilet cubicle, and those five big fellows  crowded in with their briefcases and books and they sat on the floor and the arms of the chairs – I only had one chair in the place – and stood against the walls. Their first words to me were, we’re here to lend you money. As much as you want. For somebody like me, and I’m sure it’s the same for everybody else, to suddenly be told by the bank manager that you could have as much money as you want, help yourself, that was a revelation. We thought we had died and gone to heaven.”

Unfortunately, the side affect of this was to increase vendor’s expectations to gain higher and higher prices for their properties. Combined with recent high immigration, and a lack of a comprehensive capital gains tax, and the results have been troubling for this country;

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As well as increasingly unaffordable housing, we – as a nation – are sitting on a trillion-dollar fiscal bomb.

Think about that for a moment.

Little wonder that in September last year, the Reserve Bank issued the sternest warning yet that we were headed for impending economic mayhem;

A sharp correction in house prices represents a key risk to the financial system, and one that is increasing the longer the current boom in house prices persists. A severe downturn in house prices could have major implications for the banking system, with over 55 percent of bank loans secured against residential property. Moreover, elevated household debt levels and a growing exposure of the banking system to investor loans could reinforce a housing downturn and extend reductions in economic activity, as highly indebted households are forced to reduce consumption and sell property.

As with many other individuals, institutions, organisations, business leaders, left-wing commentators, media, political pundits, political parties, the NZIER was (and still is) calling for a comprehensive capital gains tax to be implemented.

Even then, this blogger suspects we may be too late. National (and it’s predecessor, to be fair) have left it far to late and the economic horse has well and truly bolted.

Even a Capital Gains Tax at 28% – New Zealand’s current corporate tax rate – may be insufficient to dampen speculative demand for properties.

Meanwhile, the dream of Kiwis owning their own homes continues to slip away.

Depressingly, New Zealanders themselves have permitted this to happen.

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– State Housing

If the Middle Classes and their Millenial Offspring are finding it hard to buy their first home, think of the poorest  families and individuals in our communities. For them, social housing consists of packing multiple families into a single house; living in an uninsulated, drafty,  garage; or in cars.

Last year, the story of mass homelessness exploded onto our media and our “radar” as New Zealanders woke up to the reality of persistent poverty in our cities;

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Although on occassion, the mainstream media found them themselves  in embarrassingly ‘schizophrenic’ situations as they attempted to reconcile reporting on our growing housing crisis – whilst raising advertising revenue by  promoting “reality” TV programmes that were far, far removed from many people’s own disturbing reality;

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According to UNICEF;

295,000 New Zealand kids are living beneath the poverty line, which means they are living in households where income is less than 60% of the median household income after housing costs are taken into consideration.

One way to alleviate poverty is to provide state housing, at minimal rental, to families suffering deprivation. Not only does this make housing affordable, but also strengthens a sense of community and reduces transience.

Transience can have deletarious effects on families – especially on children – who then struggle with the stresses of losing friends; adjusting to new neighbourhoods, and new schools.

A government report states that transience for children can have extreme, negative impact on  their learning;

Nearly 3,700 students were recognised as transient during the 2014 year. Māori students were more likely to be transient than students in other ethnic groups.

[…]

Students need stability in their schooling in order to experience continuity, belonging and support so that they stay interested and engaged in learning.

All schools face the constant challenge of ensuring that students feel they belong and are encouraged to participate at school. When students arrive at a school part-way through a term or school year, having been at another school with different routines, this challenge may become greater.

Students have better outcomes if they do not move school regularly. There is good evidence that student transience has a negative impact on student outcomes, both in New Zealand and overseas. Research suggests that students who move home or school frequently are more likely to underachieve in formal education when compared with students that have a more stable school life. A recent study found that school movement had an even stronger effect on educational success than residential movement.

There is also evidence that transience can have negative effects on student behaviour, and on short term social and health experience

Writing for The Dominion Post, in April 2014, Elinor Chisholm and  Philippa Howden-Chapman pointed out the blindingly obvious;

Continuity of education and supportive relationships with teachers are critical for children’s educational performance.

“Churn” is not good for educational performance or enrolment in primary health care, where staff can ensure children are properly immunised and chronic health problems can be followed up.

It was for this reason that, in our submission on the Social Housing Reform Bill late last year, we strongly recommended that families with school- age children should be excluded from tenancy review.

Secure tenure and stability at one school would allow children the best chance of flourishing. In high- performing countries such as the Netherlands, children are explicitly discouraged from changing schools in the middle of the school year.

The bill had announced the extension of reviewable tenancies to all state tenants (new state tenants had been subject to tenancy review since mid- 2011). However, the housing minister, as well as the Ministry of Business, Innovation and Employment, had made clear that the disabled and the elderly were to be excluded from tenancy reviews.

In our submission, we acknowledged the Government for recognising the importance of secure tenure.

People who are compelled to move house involuntarily can experience stress, loss, grief and poorer mental health. Housing insecurity is also associated with poorer physical health.

National’s policy of ending a state “house for life”;  increased tenancy reviews for state house tenants, coupled with the sale of state houses, is inimical to the stabilisation of vulnerable families; the well-being of children in those families; and to communities.

In 2008, Housing NZ owned 69,000 rental properties.

By 2016, that number had dropped significantly to 61,600 (plus a further 2,700 leased).  National had disposed of some 7,400 properties.

Between 2014 and 2016, at least 600 state house tenants lost their homes after “reviews”.

This, despite our growing population.

This, despite John Key’s own family having been provided with the security of a state house, and Key enjoying a near-free University education.

This, despite John Key, ex-currency trader,  and multi-millionaire, admitting in 2011 that New Zealand’s under-class was growing.

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Key indicator #3: Incomes & Inequality

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In June 2014, Oxfam reported on New Zealand’s growing dire child poverty crisis;

The richest ten per cent of New Zealanders are wealthier than the rest of the population combined as the gap between rich and poor continues to widen.

Oxfam New Zealand’s Executive Director Rachael Le Mesurier said the numbers are a staggering illustration that the wealth gap in New Zealand is stark and mirrors a global trend that needs to be addressed by governments in New Zealand, and around the world, in order to win the fight against poverty.

“Extreme wealth inequality is deeply worrying. Our nation is becoming more divided, with an elite who are seeing their bank balances go up, whilst hundreds of thousands of New Zealanders struggle to make ends meet,” said Le Mesurier.

Figures for the top one per cent are even more striking. According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.

Oxfam New Zealand’s Executive Director, Rachael Le Mesurier, was blunt in her condemnation;

“Extreme inequality is a sign of economic failure. New Zealand can and must do better. It’s time for our leaders to move past the rhetoric. By concentrating wealth and power in the hands of the few, inequality robs the poorest people of the support they need to improve their lives, and means that their voices go unheard. If the global community fails to curb widening inequality, we can expect more economic and social problems.”

A 2014 OECD report placed New Zealand as one of the worst for growing inequality;

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Not only was inequality a social blight, but according to the report it impacted negatively on economic growth;

Rising inequality is estimated to have knocked more than 4 percentage points off growth in half of the countries over two decades. On the other hand, greater equality prior to the crisis helped increase GDP per capita in a few countries, notably Spain.

According to the OECD assessment,  income inequality had impacted the most on New Zealand, with only Mexico a close second;

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The OECD Report went further, making this “radical” observation;

The most direct policy tool to reduce inequality is redistribution through taxes and benefits. The analysis shows that redistribution per se does not lower economic growth.

The statement went on to “qualify”  any suggestion of socialism with a caveat. But the declaration that “analysis shows that redistribution per se does not lower economic growth” remained, constituting a direct contradiction and challenge to current neo-liberal othodoxy.

In August 2015, former City Voice editor, and now NZ Herald social issues reporter, Simon Collins revealed the growing level of child poverty in this country;

The Ministry of Social Development’s annual household incomes report shows that the numbers below a European standard measure of absolute hardship, based on measures such as not having a warm home or two pairs of shoes, fell from 165,000 in 2013 to 145,000 (14 per cent of all children) last year, the lowest number since 2007.

Children in benefit-dependent families also dwindled from a recent peak of 235,000 (22 per cent) in 2011, and 202,000 (19 per cent) in 2013, to just 180,000 (17 per cent) last year – the lowest proportion of children living on benefits since the late 1980s.

But inequality worsened because average incomes for working families increased much faster at high and middle-income levels than for lower-paid workers.

The net result was that the number of children living in households earning below 60 per cent of the median income after housing costs jumped from a five-year low of 260,000 in 2013 to 305,000 last year, the highest since a peak of 315,000 at the worst point of the global financial crisis in 2010.

In percentage terms, 29 per cent of Kiwi children are now in relative poverty, up from 24 per cent in 2013 and only a fraction below the 2010 peak of 30 per cent.

In September 2016, Statistics NZ confirmed the widening of  income inequality from 1988 to 2015,  between households with high  and  low incomes;

  • In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
  • Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.  

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The neo-liberal “revolution” took place from the mid-to-late 1980s. Hardly surprisingly, the rise in income inequality takes place at the same time.

Income inequality dipped from 2004 when Labour’s “Working for Families” was introduced.

However, income inequality worsened after 2009 and 2010, when National cut taxes for the rich; increased GST (which impacts most harshly on low-income families and individuals); and increased user-charges on essential services such as prescription fees, ACC levies, court fees, etc. Increasingly complicated WINZ requirements for annual re-applications for benefits and complex paperwork may also have worsened the plight of the country’s poorest.

Despite all the promises made by the Lange government; the Bolger government; and every government since, our neo-liberal “reforms” have not been kind to those on low and middle incomes.

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Key indicator #4: Child poverty

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According to Otago University’s Child Poverty Monitor in 2014;

Child poverty has not always been this bad – the child poverty rate in the New Zealand many of us grew up in 30 years ago was 14%, compared to current levels of 24%.

Thirty years prior to 2014 was the year 1984. David Lange’s Labour Party had been elected to power.

Roger Douglas was appointed Minister of Finance. The Member for Selwyn, Ruth Richardson, was also in Parliament, taking notes.

The term “trickle down” entered our consciousness and vocabulary. It promised that, with tax cuts; privatisation; winding back state services; and economic de-regulation, wealth would trickle down to those at the bottom of the socio-economic ladder.

How is that working out for us so far?

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So much for  the “aspirational dream” offered to us by “trickle down” economics.

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Key indicator #5: The Real Beneficiaries

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In June last year, Radio NZ reported  the  latest survey of household wealth by Statistics NZ. It found;

“…the country’s richest individuals – those in the top 10 percent – held 60 percent of all wealth by the end of July 2015. Between 2003 and 2010, those individuals had held 55 percent. The richest 10 percent of households held half of New Zealand’s wealth, while the poorest 40 percent held just 3 percent of total wealth.”

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Following hard on the heels of the Stats NZ report,  Oxfam NZ made a disturbing revelation;

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Three years after her previous public warning,  Oxfam New Zealand’s, Rachael Le Mesurier, was no less scathing. Her exasperation was clear;

“The gap between the extremely wealthy and the rest of us is greater than we thought, both in New Zealand and around the world. It is trapping huge numbers of people in poverty and fracturing our societies, as seen in New Zealand in the changing profile of home ownership.”

National minister, Steven Joyce responded. He was his usual mealy-mouthed self when interviewed on Radio NZ about the Oxfam report;

“There’s always inequality but again you have got to look at those reports carefully because in that report a young medical graduate who has just come out of university would be listed as somebody who is in the poorest 20 per cent because they have a student loan.They’ll pay that student loan off in about four years and they’ll be earning incomes of over $100,000 very quickly.

So although they’re in those figures today, they won’t be in those figures in five years’ time.”

Which appears to sum up the National government’s head-in-sand attitude on child poverty and income inequality.

Economist, Shamubeel Eaqub, though, had a different “take” on the issue and warned;

“Every time we see a new statistic on inequality, whether it’s in terms of income, opportunities or wealth, it shows very clearly that New Zealand is being ripped apart by our class system.”

When economists begin to issue dire social warnings, you know that matters have taken a turn for the worse.

So where does that leave our New Dear Leader Bill English  with his insistence  that “we’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues”?

English’s assertion to John Campbell on Radio NZ, on 25 January, (outlined at the beginning of this story) makes sense only if it it is re-phrased;

“We’ve got a government actually with a good record on addressing, in fact, some of the toughest wealth-accumulation issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around private investment, around increasing incomes for the wealthiest ten percent is the right kind of mix – “

Not a very palatable message – but vastly more truthful as income inequality continues to wreak appalling consequences throughout our communities and economy.

Otherwise, English appears to reside not so much in the Land of the Long White Cloud, but in the Realm of Wishful Thinking.

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References

Radio NZ: Checkpoint – Bill English on the challenges of his first month as PM

Scoop media: Unemployment rate rises to 5.2 percent as labour force grows

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

NZ 1984 Yearbook: 3A – General SummaryCensus of population and dwellings 1981 (see “Tenure of Dwelling”)

Statistics NZ: Owner-Occupied Households

Statistics NZ: 2013 Census QuickStats about national highlights – Home Ownership

Interest.co.nz: Bernard Hickey says the collapse in home-ownership rates among families formed since 1991 is an unfolding disaster for NZ’s economy, our society and the Government’s finances

International Demographia: 13th Annual  International Housing Affordability

NZ Institute for Economic Research: The home affordability challenge

Monetary Meg: What is vendor finance?

Radio NZ: NZ immigration returns to record level

NZ On Screen: Revolution

NZ Herald: New Zealand residential property hits $1 trillion mark

Reserve Bank: Regulatory Impact Assessment of revised LVR restriction proposals September 2016 – Adequacy Statement

The Guardian: New Zealand housing crisis forces hundreds to live in tents and garages

Fairfax media: One in 100 Kiwis homeless, new study shows numbers quickly rising

Al Jazeera: New Zealand’s homeless: Living in cars and garages

NZ Herald: Homelessness rising in New Zealand

Radio NZ: Homeless family faces $100k WINZ debt

TV3 News: The hidden homeless – Families forced to live in cars

TV1 News: Housing crisis hits Tauranga, forcing families into garages and cars

UNICEF: Let’s Talk about child poverty

Education Counts: Transient students

Dominion Post: Housing policy will destabilise life for children

NZ Herald: State housing shake-up – Lease up on idea of ‘house for life’

Radio NZ: Thousands of state houses up for sale

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Fairfax media: Nearly 600 state house tenants removed after end of ‘house for life’ policy

NZ Herald: Key admits underclass still growing

Oxfam: Richest 10% of Kiwis control more wealth than remaining 90%

NZ Herald: 300,000+ Kiwi kids now in relative poverty

Statistics NZ: Income inequality

Law Society: Civil court fee changes commence

Fairfax media: Prescription price rise hits vulnerable

Salaries.co.nz: ACC levies to increase in April 2010

Radio NZ: Thousands losing benefits due to paperwork

Scoop media: Health Issues Highlighted in Child Poverty Monitor

NZ Herald: Hungry kids foraging in pig scraps ‘like the slums of Brazil’

Fairfax media: Damp state house played part in toddler’s death

NZ Herald: More living in cars as rents go through roof

NZ Doctor: Tackle poverty to fight rheumatic fever

Radio NZ: 10% richest Kiwis own 60% of NZ’s wealth

Fairfax media: Wealth inequality in NZ worse than Australia

Radio NZ: Steven Joyce responds to Oxfam wealth inequality report

Additional

Dominion Post: Kids dragged from school to school

Other Blogs

The Standard: John Key used to be ambitious about dealing with poverty in New Zealand

Previous related blogposts

Lies, Damned lies and Statistical Lies

Lies, Damned lies and Statistical Lies – ** UPDATE **

National exploits fudged Statistics NZ unemployment figures

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

CYF – The Hollowing Out of a State Agency

The Mendacities of Mr Key # 18: “No question – NZ is better off!”

Foot in mouth award – Bill English, for his recent “Flat Earth” comment in Parliament

The Mendacities of Mr English – Fibbing from Finance Minister confirmed

Rebuilding the Country we grew up in – Little’s Big Task ahead

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This blogpost was first published on The Daily Blog on 7 February 2017.

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= fs =

St John management applies tourniquet to workers’ throats

20 January 2017 1 comment

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Charitable organisation, St John, which operates ambulance services nationwide, as well as other medical services, has been engaging in  anti-worker actions during recent industrial negotiations to conclude a collective agreement.

On 5 January, St John announced that workers wearing apparel bearing a pro-union message “Healthy Ambos Save Lives” would be docked 10% of their wages;

St John Ambulance officers who ditch their uniforms as part of ongoing strike action will have their pay docked by 10 per cent.

The First Union, which represents 1000 ambulance officers across the country, has condemned the move as “astounding”.

But St John says it didn’t take the step lightly, and it was done out of concern for the health and safety of staff and patients.

The wage deductions come as ambulance officers enter their third month of industrial action, following stalled collective agreement negotiations with St John.

Striking workers are continuing to respond to emergencies and call-outs as normal, but are breaching St John policy by refusing to wear uniforms.

Instead, unionised St John workers have been wearing T-shirts reading “Healthy Ambos Save Lives”.

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St John clinical operations director, Norma Lane,  ‘spinned’ the wage-docking as a “safety” issue;

“It is important ambulance officers are identifiable in an emergency environment where circumstances can change rapidly. Not complying is a health and safety risk not only to the employee but to fellow officers and other emergency workers. While there is only a very small number of ambulance professionals refusing to wear hi-vis vests, we have advised First Union and our staff that those employees not complying with this requirement will receive a 10 per cent deduction of wages.”

How cutting wages improves safety for workers is not made clear by Ms Lane.

St John’s threats echo that made by AFFCO employers, almost exactly a year ago;

An AFFCO worker has been suspended without pay, and will probably be sacked after filming workers in union t-shirts being refused entry to work, the Meat Workers’ Union says.

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[…]

AFFCO said it was company policy that union t-shirts were not worn on site, and that they were associated with inappropriate and threatening behaviour.

One Union member made his/her feelings perfectly clear with this image posted on First Union’s Facebook page;

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What is clear, though, is that St John is engaging in all-out repugnant industrial warfare against the First Union.

St John Station managers have used emotional blackmail, legal threats from law firms,  and deliberate mis-information in a calculated strategy to undermine First Union and its  members’ resolve. As  Ambulance Professionals First spokesperson, Lynette Blacklaws, revealed on 7 November last year;

“When a crew arrived in mufti at a station in Auckland this morning their manager snapped that ‘if someone dies because they didn’t let you in be it on your heads’. This comes on the same day station managers in the Bay of Plenty told several ambulance officers over the phone that industrial action was cancelled, even though this isn’t true.”

More aggressive  anti-union activity was to come.

On 24 November last year,  St Johns announced on it’s media page that it had  concluded a successful collective agreement with the  Amalgamated Workers Union NZ Southern  (AWUNZ), Central Amalgamated Workers Union  (CAWU), NZ Ambulance Association (NZAA), and the Ambulance Officers Workplace Union  (AOWU).

First Union was not a party to the new collective agreement. St John stated on it’s webpage,

It is our preference to have nationally consistent terms and conditions for all St John employees, accordingly, St John and the four union parties have made provision for the First Union members to become party to the new Collective Agreement should they wish

The statement continued with this ominous ‘rider’;

If First Union decides not to become party to the new Collective Agreement, St John will continue to work through the various options available.

On 7 January this year, First Union learned what “various options” St John had in mind. As reported in The Daily Blog, St John was flexing it’s industrial muscle using new anti-union laws passed by National in 2015.

The union representing over 1000 St John Ambulance staff has today received confirmation from the Employment Relations Authority that St John has lodged an application to withdraw from bargaining without concluding a collective agreement.

If St John were to be successful they would be the first company to withdraw from bargaining without concluding a collective agreement under the 2015 amendments to the Employment Relations Act.

Simply put, National’s so-called “reforms” allowed employers to cease negotiations to conclude a collective agreement with a union, by applying to the Employment Relations Authority;

Before the law change, parties bargaining for a collective agreement were required to conclude that agreement unless there was genuine reason not to. The change means that a collective agreement does not have to be concluded, however parties must still deal with each other in good faith.

[…]

The Act provides some protections against parties that end bargaining by deadlocking on one issue. Specifically, either party can seek a declaration from the Employment Relations Authority (the Authority) about whether bargaining has concluded. The process is discussed in more detail below.

First Union officials were not impressed. They understood the agenda that St John was playing out;

Jared Abbott, spokesperson for Ambulance Professionals First, the network within FIRST Union representing ambulance officers, said the application confirms what the union suspected: that St John had no intention of reaching an agreement.

“St John have spent less than two hours with us at the table since we started our protest actions. Applying to conclude bargaining now is outrageous. This is no way to treat your staff.”

Mr Abbott said that despite writing to the company on several occasions and requesting a proposed collective agreement, St John repeatedly refused to make a formal offer.

Ambulance Professionals First has also written to St John highlighting how no collective agreement was presented to the ratification meetings for the smaller unions who agreed to settle, a requirement under the law for a collective agreement to become operative.

“We’re astounded with how unprofessional St John has been. Ambulance staff just want fair recognition for the hard work they do. This is only going to get more staff off-side,” said Abbott.

“We don’t believe St John’s application will be successful.”

St John is using ‘the stick’. Other employers opt for ‘the carrot’ to break legal strikes;

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Whether by ‘carrot’ or ‘stick’, the bosses’ agenda remains the same: to smash unions and undermine workers’ rights. The end result – dampen wage growth and wind-back hard-won worker’s conditions.

St John management’s unscrupulous behaviour makes a mockery of that organisation’s so-called “five values”;

We do the Right Thing – Whakaaro Tika
We take responsibility. Make the tough calls. Think of others.

We stand Side by Side – Whakakoha
We respect, value and support what others contribute.

We Make it Better – Whakawerohia
We find solutions- step up, own it, do it.

We have Open Minds – Whakahangahanga
We listen openly. Encourage ideas. Welcome feedback.

We are Straight Up – Whakapono
We act with honesty, courage and kindness.

They even have ‘badges’ proudly displayed on their webpage;

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Obviously St John’s “five values” do not extend to their own workers.

Curiously, whilst St John proudly announced it’s collective agreement with four other unions on its “News Articles” page, it made no mention of it’s application to the Employment Relations Authority to abandon negotiation with First Union;

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Neither has it disclosed to the public on it’s website that it is taking draconian steps to dock ambulance drivers’ pay packets by 10% for  wearing shirts bearing union messages.

Is St John ashamed to present this information on their website, where public eyes can see what the organisation is doing to it’s ambulance drivers? It is evidently not a “good look” that an organisation nearly a thousand years old, and  dedicated to helping people, is screwing its own staff.

According to Norma Lane, the wearing of the First Union shirts constitutes   “participation in a partial strike” and thereby justifies docking ambulance drivers’ pay.

Which is about as mean-spirited as a charitable, non-profit organisation can get. As  Jared Abbott correctly pointed out;

“The wage deductions are pretty astounding. The actions ambulance officers are taking cost St John nothing.”

At first look, St John’s actions appear to contravene the Wages Protection Act 1983 which prevents employers from arbitarily docking workers’ pay;

Deductions may only be made from an employee’s pay if they are required by law, agreed to by the employee or are overpayments in some circumstances.

However, it appears that St John is stretching an exemption to what is known as a “partial strike“;

Employees strike when a number of employees totally or partially:

  • break their employment agreement
  • stop work or don’t accept some or all the work they usually do
  • reduce their normal output, performance, or rate of work.

Employees don’t have to stop work completely for them to be on strike.

However, one suspects that more reasonable-minded people would find it difficult to define a “partial strike” as wearing a shirt. If that is St John’s justification for docking ambulance drivers’ pay, then it may be on very shaky ground, both legally and morally.

Whether by luck, or clever design,   this has all transpired over the Year’s End/New Year period when current affairs programmes such as The Nation and Q+A are on hiatus, and even Radio NZ is operating on a “summer holiday programme”. The later  is closer to listening to The Breeze rather than serious news and current affairs.

Once the public begin to understand the machinations of St John’s management, that organisation’s reputation may risk a real hit. “A good reputation” as Colin Beveridge once reflected on,  “is hard-won and easily lost. But the lost reputation has invariably been given away by the actions of the holder, rather than been taken away by somebody else.”

Words that St John’s management would do well to consider.

St John – heal thyself.

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Postscript

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big-pay-rises-for-district-health-board-heads

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It will be interesting to find out what salary increase St John’s CEO will have this year or next.

 

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References

St John: Ambulance Services

St John: A quick snapshot of what we do

NZ Herald: St John ambulance officers to have pay deducted over industrial action

Radio NZ: Worker suspended over union t-shirts

Facebook: First Union – Healthy Ambos Save Lives

First Union: St John threatens jobs… over wearing a badge

First Union: St John employ “emotional blackmail” in badge dispute

St John:  AWUNZ, CAWU, NZAA & AOWU Unions and St John reach agreement

The Daily Blog: St John apply to end bargaining with FIRST Union

Ministry of Business, Innovation, and Employment (MoBIE): Amendments to the Employment Relations Act 2000 (March 2015)

Ministry of Business, Innovation, and Employment (MoBIE): Law changes to collective bargaining

Radio NZ: Junior doctors offered up to $200/h to break strike – union

St John:  Vision & Values

St John: News Articles

St John: The Order of St John

Radio NZ: Ambulance staff to have wages cut over strikes

Employment NZ: Deductions

Employment NZ: Strikes and lockouts

Fairfax media: Big pay rises for district health board heads

Additional

Facebook: First Union

Facebook: Ambulance Professionals First

Previous related blogposts

If anyone wants to see the Working Class

Help Talley’s Affco Workers!

Immovable and Irresistable forces – combined!!

The Talleys Strikes Back

John Key’s track record on raising wages – 7. Part 6A – stripped away

John Key’s track record on raising wages – 8. An End to Collective Agreements

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This blogpost was first published on The Daily Blog on 15 January 2017.

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