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A proposed Labour-Green-Mana(-NZ First?) agenda – part toru

8 March 2014 3 comments

Continued from:  A proposed Labour-Green-Mana(-NZ First?) agenda – part rua

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new-zealand-national-party_3382 adapted 2014

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An incoming Labour-Green-Mana(-NZ First?*) coalition government will have much work to do – especially in it’s first three years.

In the six years that National has been in power, they have passed many odious and often repressive pieces of legislation. Labour and the Greens have already committed to repealing some of these laws and policies.

As a Labour-led coalition government addresses growing problems of child poverty; income inequality; a shortage of decent, affordable housing; and chronic unemployment, a legislative programme will demand a long list of progressive reforms.

In no particular order;

The 90 Day Employment Trial Period

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

It gives unbalanced power to employers who can blackmail an employee or get rid of them at the slightest whim. It also makes workers less willing to be mobile in the workplace. Why change jobs at the risk of being fired within 90 days of taking up a new position?

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

By April 2011, this was extended to all companies regardless of staff numbers. (A typical National strategy; start small – then encompass an entire sector.)

Has it helped  generate more jobs as National claimed it would?  Evidence suggests it played very little part in creating employment, and indeed unemployment went up after both legislative changes,

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So aside from empowering employers and disempowering workers, what exactly was the point of enacting this piece of legislation? Because it seems that an awful lot of people lost their jobs through this legislation. As one media report stated,

It is not known how many workers were dismissed during the trial period, but the figures revealed 27 per cent of employers said they had fired at least one new employee during or at the end of their trial.

This means at least 18,000 people lost their jobs in the first three months of employment last year, with the actual figure likely to be much higher.

And precisely how does this raise wages, as per Dear Leader’s past promises (see below)?

This law gives too much power to one party in the Employer-Employee relationship, and it has no place in a fair-bargaining workplace.

On 17 October 2010, Labour promised that this law would be scrapped by an incoming Labour-led government. I hope the current Labour leadership has not resiled from this commitment.

Ports of Auckland Dispute – Shipping Lines Price Fixing

“The average income has been about $90,000, so it hasn’t been a badly-paid place. But the problem is flexibility when ships arrive and when staff get called out, how they can cope with that.” – John Key, 12 March 2012

Putting to one side the myth of  POAL maritime workers earning $90,000 – so what?

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

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

This appears to have been motivated  by a high degree of price-fixing by shipping cartels, as was pointed out by the Productivity Commission in April 2012,

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Full story

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

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

As with the “Hobbit Law”, our Dear Leader appears to pay more heed to the demands of international corporate interests than to fulfilling his pledges to raise wages.

An incoming Labour-led government should immediatly implement the Productivity Commission’s recommendation,

“The commission recommends that New Zealand require shipping companies wishing to collaborate to fix prices or limit capacity to demonstrate to the Commerce Commission that there will be a public benefit which will outweigh the anti-competitive effects.”

This problem must be addressed by an incoming government. It is simply intolerable for foreign corporations to be dictating labour laws; industrial relations; and wages, in a supposedly sovereign nation.

Youth Rates

From 1 May 2013, National  re-introduced a new Youth Rate. The rate would be set at $10.80 an hour [soon to be increased to $11.40 per hour]– compared to the then- minimum rate of $13.50  an hour  [soon to be $14.25 on 1 April this year], and would include 16 to 19 year olds.

John Key stated,

“For a lot of employers, they will go out there and say, ‘I’m going to give somebody a go that’s been in the workforce before’ and so the balance is against that younger person. That’s very disheartening for them – they are good young people, they just want a chance.

So I think it’s got to be seen in perspective – the vast overwhelming bulk of youngsters actually won’t go on a starting out wage.”

Which conflicts with John Key’s other assertions that he wants to see wages rise;

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

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

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

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

Youth rates won’t achieve that goal, Mr Prime Minister!

There is no good reason why Youth Rates should actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.

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

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

As Lowe admitted – there is no new job for the  younger worker. S/he is merely displacing an older worker.

As it is, figures from Statistics New Zealand’s  Household Labour Force Survey showed that unemployment for young people had already fallen by the March 2013 Quarter – a full two months before Youth Rates came into effect;

In the year to March 2013, there was a large fall in unemployment for people aged 15–24 years (down 10,500). This fall can be largely attributed to a decrease in unemployed 20–24-year-olds (down 11,200). This was an atypical fall in unemployment, as the number of people unemployed for this age group usually increases during March quarters. The unemployment rate for people aged 20–24 years fell 4.1 percentage points to 10.9 percent – the lowest rate since the September 2009 quarter.

The employment rate for 20–24-year-olds rose over the year to March 2013. There was also an increase in the number of people aged 15–24 years not in the labour force over the year. Behind this was a rise in the number of young people outside the labour force who are studying (up 25,000). The number of both 15–19-year-olds and 20–24-year-olds in study rose –  up 16,200 and 8,800 respectively.
NEET rate declines

In seasonally adjusted terms, the NEET (not in employment, education or training) rate for youth (aged 15–24 years) decreased 1.5 percentage points, to 12.5 percent in the March 2013 quarter. This is the lowest youth NEET rate since the September 2011 quarter. The NEET rate for people aged 20–24 years fell 2.4 percentage points to 15.9 percent.

As the global economy continued to improve; the Christchurch re-build moved into high gear; and demand for our exports increased, unemployment was bound to eventually fall.

In which case, paying young workers a lower wage than their older counterparts was nothing more than a “gift” handed to employers.

As such, it has no place in a modern, civilised society. Youth rates are exploitative and demoralising. They also drag adult wages downward, as employers can opt for cheaper labour, as  David Lowe stated above.

In October 2012, Labour’s then-Leader, David Shearer condemned youth rates,

“It’s not going to create jobs by driving down wages.  These people are going to leave and go to Australia.

We need an economy that provides decent, secure jobs and good incomes and where young people have hope and opportunity, not the low-wage vision promoted by National.”

An incoming Labour-led government must repeal this exploitative legislation.

Continued at:  A proposed Labour-Green-Mana(-NZ First?) agenda – part wha

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(* At this point in time, NZ First’s leader, Winston Peters,  has not indicated which bloc – Labour or National – he intends to coalesce with. As such, any involvement by NZ First in a progressive government cannot be counted upon.)

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Above image acknowledgment: Francis Owen

To be continued at:  A proposed Labour-Green-Mana(-NZ First?) agenda – part wha

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References

Parliament Legislation: Employment Relations Act 2000, Section 67A

NZ Herald: Will the 90 Day trial period make a difference?

Beehive:  90-Day Trial Period extended to all employers

Trading Economics: New Zealand Unemployment Rate

Waikato Times: Thousands sacked under 90-day trial period

Radio NZ:  Labour would scrap 90 day trial – Goff

Fairfax media: Calls to end shipping lines’ price fixing

Fairfax media: Jackson pulls back from port comments

Radio NZ: PM defends lower youth pay rate

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

Statistics NZ: Household Labour Force Survey: March 2013 quarter

TV1 News: Employers back youth ‘starting wage’

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John Key’s track record on raising wages – 5. The Minimum Wage

11 November 2012 7 comments

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Continued from: John Key’s track record on raising wages – 4. Rest Home Workers

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5. The Minimum Wage

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

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

See: Dept of Labour – Previous minimum wage rates

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

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

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

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

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

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

Priorities, eh?

The real insult is that  Key and English both admit that the minimum wage is difficult to live on.

Key said,

Look, I think it would be very difficult for anyone to do that.”

See:  Ibid

GUYON:  Okay, can we move backwards in people’s working lives from retirement to work and to wages?  Mr English, is $13 an hour enough to live on?

BILL ENGLISH:  People can live on that for a short time, and that’s why it’s important that they have a sense of opportunity.  It’s like being on a benefit.

GUYON:  What do you mean for a short time?

BILL ENGLISH:  Well, a long time on the minimum wage is pretty damn tough, although our families get Working for Families and guaranteed family income, so families are in a reasonable position.

See: TVNZ’s Q+A: Transcript of Bill English, David Cunliffe interview

The Department of Labour claimed  a rise in the minimum wage  would cost 6,000 jobs.

But Treasury disagreed, saying,

This has not been true in the past. The balance of probabilities is that a higher minimum wage does not cost jobs.”

Raising the minimum wage would certainly benefit SMEs (Small-Medium Enterprises), as low-income earners spend their entire wages on goods and services. Any rise in paying wages should be offset by increasing till-takings with customers spending more.

So it appears blatantly obvious that no good reason exists not to raise the minimum wage.

After all, in 2009 and 2010, National gave away far more in tax cuts for the rich.

And precisely how does this raise wages, as per Dear Leader’s promises?

Next chapter: 6. Youth Rates

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John Key’s track record on raising wages – 4. Rest Home Workers

11 November 2012 11 comments

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Continued from: John Key’s track record on raising wages – 3. Ports of Auckland Dispute

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4. Rest Home Workers

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Amongst the lowest paid workers in this country, Rest Home caregivers earn around $13.61 an hour – just barely above the minimum wage of $13.50.

Human Rights Commissioner, Dr Judy McGregor, found out first-hand what the job entailed,

Spending hours on her feet, lifting, hoisting, feeding, bathing, dressing and toileting her charges took its toll – and for just $14 an hour, the Human Rights Commission’s equal opportunities commissioner compares it to a form of modern-day slavery.

“The complexity of the job was actually a surprise for me. It’s quite physical work, and it’s emotionally draining because you are obliged to give of yourself to other people,” she said.

“Saint-like women do it every day so that older New Zealanders can have a quality of life”.”

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Full story

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When this was point out to John Key, the following exchange took place on morning TV,

Key acknowledged there were problems with rural rest homes workers paying for their own travel, effectively reducing their wage below the minimum wage of $13.50 an hour.

“Travel is one of those areas where we are looking at what we can do,” he told TVNZ’s Breakfast programme.

However, the Government could not afford to give DHBs the $140 million required to enable rest homes to pay their staff more.

“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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Full story

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But there seemed plenty of cash – taxpayer’s money – to give politicians some fairly generous salary increases,

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Full story

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And a “lack of money” certainly didn’t stop the country from spending over $200 million of public money on a sporting tournament,

Budget blowouts have pushed public spending on the Rugby World Cup well above $200 million – without counting $555 million in stadium upgrades and $39 million in direct losses from hosting the tournament. “

See: Blowouts push public Rugby World Cup spending well over $200m

If  Key was serious about raising wages, he should clearly have made the lowest paid his Number One Priority. The 2009 and 2010 tax cuts would have made an excellent opportunity to give the biggest tax cuts to the lowest paid workers.

Instead, those tax cuts went to the very top. On top of that, the rise in GST from 12.5% to 15% would have impacted the hardest on those on minimum wage.

Double whammy.

So precisely how does this raise wages, as per Dear Leader’s promises? (Or could it be that when Key promised to raise wages – he was referring to his own?)

Next chapter: 5. The Minimum Wage

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John Key’s track record on raising wages – 3. Ports of Auckland Dispute

11 November 2012 5 comments

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Continued from: John Key’s track record on raising wages – 2. The 90 Day Employment Trial Period

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3. Ports of Auckland Dispute

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“The average income has been about $90,000, so it hasn’t been a badly-paid place. But the problem is flexibility when ships arrive and when staff get called out, how they can cope with that.” – John Key, 12 March 2012

See: Jackson pulls back from port comments

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

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

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

There is also a high degree of price-fixing by shipping cartels, as was pointed out by the Productivity Commision in April,

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Full story

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

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

As with the “Hobbit Law”, our Dear Leader appears to pay more heed to the demands of international corporate interests than to fulfilling his pledges to raise wages.

Precisely how does this raise wages, as per Dear Leader’s promises?

Next chapter: 4. Rest Home Workers

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John Key’s track record on raising wages – 2. The 90 Day Employment Trial Period

11 November 2012 5 comments

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Continued from: John Key’s track record on raising wages – 1. The “Hobbit Law”

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2. The 90 Day Employment Trial Period

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

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

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

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

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

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

Has it helped  generate more jobs as National claimed it would?

Evidence suggests it played very little part in creating employment, and indeed unemployment went up after both legislative changes,

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Source

So aside from empowering employers and disempowering workers, what exactly was the point of enacting this piece of legislation?

And precisely how does this raise wages, as per Dear Leader’s promises?

Next Chapter: 3. Ports of Auckland Dispute

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John Key’s track record on raising wages – 1. The “Hobbit Law”

11 November 2012 8 comments

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Continued from:  John Key’s track record on raising wages – preface

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1. The “Hobbit Law”

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On 20 October 2010, Peter Jackson released this statement to the media,

“Next week Warners are coming down to New Zealand to make arrangements to move the production offshore. It appears we cannot make films in our own country even when substantial financing is available.”

See: Warner preparing to take Hobbit offshore – Sir Peter

It was the opening shot of a public war-of-words between Jackson and his camp, and Actor’s Equity.  An industrial dispute had been elevated to DefCon One, and things were about to ‘go nuclear‘.

Almost overnight, a mood of hysteria gripped the country; we were about to lose ‘Our Precious‘ movies to Eastern Europe, Mongolia, or Timbuktu.

Public panic reached levels unseen since the 1981 Springbok Tour, or the satanic child abuse-ritual stories of the early 199os. There were patriotic street marches (flaming torches were considered but rejected because of OSH concerns.) Union officials were harassed in public; vilified; and threatened with death. A well-known  actress – popular up till this point – considered leaving for Australia after receiving death threats, because of her pro-Union stance.

See: And everybody take a deep breath – please

It was the nastier side of New Zealand’s collective psyche which we’ve come  to be familiar with. We do ‘mob hysteria‘ very well.

John Key and National would have none of it, of course. Dear Leader acted with authoritarian style not seen outside ex-Soviet republics, African, and Middle East  dictatorships.

As the Dominion Post reported,

The Hobbit dispute was resolved after Warner Bros executives jetted into New Zealand for a meeting with Government ministers at Mr Key’s official Wellington residence, Premier House.

After two days of tense days of talks with Warner Bros bosses, who were chauffeured around Wellington in Crown limousines, the Government agreed to a raft of measures including a $20 million tax break to keep the two Hobbit movies in New Zealand.

An agreement to change New Zealand’s employment laws clinched the deal after studio bosses and Jackson threatened to move production off-shore over a stoush with the actors union. Labour lawswere were [subsequently amended].

See: PM’s ‘special’ movie studio meeting

The labour law that the Dompost piece referred to was the Employment Relations (Film Production Work) Amendment Bill which made film industry workers independent contractors by default – thereby changing the definition in employment legislation of what constitutes an “employee”.

See: The Hobbit law – what does it mean for workers?

Even if the nature of your employment mirrors that of an employee with a boss who determines your hours of on-site work; supplies all your tools and work materials; dictates your workplace requirements, including meal breaks – your employer can still treat you legally as a “contractor”.

A worker under these conditions has all the obligations of an employee – but none of the rights.  That same worker may be deemed a “self employed contractor” – but has none of the usual independence of a contractor.

A worker in this “limbo” has had all his/her security of employment; minimum wages;  holidays; and right to collective bargaining stripped away.

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

All done at the stroke of a pen. No consultation. It was all decided for you, whether you wanted it or not. Only a totalitarian, One Party, regime could match such dictatorial powers.

The “Hobbit Law” took precisely two days from First Reading to Royal Assent. An Olympic record in law-making.

See: Employment Relations (Film Production Work) Amendment Act 2010 – Legislative history

By 21 December 2010 – two months after Jackson had sent the entire nation into a spin with his first press release –  an email dated 18 October, to Economic Development Minister Gerry Brownlee, revealed a startling new picture,

There is no connection between the blacklist (and it’s eventual retraction) and the choice of production base for The Hobbit”.

“What Warners requires for The Hobbit is the certainty of a stable employment environment and the ability to conduct its business in such as way that it feels its $500 million investment is as secure as possible.”

See: Sir Peter: Actors no threat to Hobbit

Peter Jackson and John Key knew precisely how to pull this country’s strings and make workers and the public dance to their tune. They managed to con workers to demand losing their own rights as employees. Well played, Mr Jackson, Mr Key.

So precisely, how does this raise wages, as per Dear Leader’s promises?

Next chaper:  2. The 90 Day Employment Trial Period

See also previous blogposts:Muppets, Hobbits, and Scab ‘Unions’, Roosting chickens

Additional

Tech Dirt: The Hobbit Took $120M From Kiwi Taxpayers – Maybe They Should Own The Rights (5 Dec 2012)

Fairfax Media: To save regular earth, kill Hobbit subsidies (6 Dec 2012)

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John Key’s track record on raising wages – preface

11 November 2012 19 comments

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Preface

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

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

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

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

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

See: National policy – Speech: Environment Policy Launch

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

See: Speech: Key – business breakfast

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

See: National policy – Boosting Science and Innovation

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

See: Statement to Parliament 2011

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

See: Parliament – Speech from the Throne

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

See: Key wants a high-wage NZ

Key has repeated the same pledge every year since 2008. It has become a mantra, “raise wages, raise wages, raise…”.

But words are easy. What has been Key’s actual track record? How does Dear Leader’s words reconcile with his actions? What have been the results?

The following chapters give an insight into the rhetoric and reality of the National Party and it’s leader, John Key.

1. The “Hobbit Law”

2. The 90 Day Employment Trial Period

3. Ports of Auckland Dispute

4. Rest Home Workers

5. The Minimum Wage

6. Youth Rates

7. Part 6A – stripped away

8. An End to Collective Agreements

9. Conclusion

10. A New Government’s Response

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