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    Essential Information on an Essential Issue

    Letter No.19

    17 June, 1995

    Key points from the Budget
  • ABATEMENT RATES -- Action Overdue?

    The multi-party accord on employment is rolling off the printers and should be released in the next week. The group - comprising Wyatt Creech as chairman, Labour's Steve Maharey and the Alliance's Jim Anderton - has had thirteen meetings this year to hammer out the accord based on the 120 recommendations of the Employment Taskforce. What to expect? The recent Budget did not include any specific allocation of resources for initiatives arising from the Employment Taskforce, and it remains to be seen whether the multi-party accord will include the allocation of fresh resources to new employment programmes.

  • The `word in Wellington' is that the Taskforce proposal for independent Employment Commissioners has not made it into the final accord. The Commissioners would have been responsible for taking a lead in identifying local employment opportunities and promoting programmes and were seen as an important focus of leadership needed on the jobs issue. There may still be regional action groups established which will draw together local government agencies and community groups. We'll see.
    Source The Dominion, 8/6/95, Group's job reply out next week

    The Budget expects employment growth to slow over the next year in line with a fall in economic growth. Treasury forecasters are maintaining a cautious outlook, forecasting unemployment at 7.1% for March 1996, falling to 6% in March 1998.

  • The forecasters have already been proved off the mark with the first three months of this year seeing official unemployment fall to 6.6% compared to the Treasury prediction of 7.4%. Treasury says that the lower-than-expected figures were the result of more part-time jobs being created and a drop in the participation rate in the workforce.

    The extra jobs won't cut the cost of the dole by much. The unemployment benefit is budgeted to fall just $50m to $1.069 billion, partly because of rises to the dole payment (which are indexed to the CPI) and partly because more people will come into the workforce.

    In spite of a drop in unemployment benefits, the government faces a constant and dramatic growth in other benefits, particularly with people on sickness and invalid benefits and the domestic purposes benefit. Social Welfare Minister Peter Gresham told a post-Budget briefing in Wanganui that where unemployment payments had reduced by 12.5%, or 20,000 people, in the last year, the number of people on sickness and invalid benefits grew 18,000 people in the last three years, and is continuing to rise.
    Source Evening Standard, 2/6/95, Benefit blow-out worries Nats

    Peter Gresham has announced that from September, beneficiaries will be given regular medical check-ups (paid for by the State), in an effort to reduce the numbers on the long-term benefits and encourage them back to work. Social Welfare says that applicants for the sickness benefit would have their initial test done by their GP. A second check would be required four weeks after the benefit was granted, then after three months the beneficiary would be required to be examined by an accredited doctor. The checks would be carried out yearly from then on. On Budget night, the Government estimated that tougher screening would save 5% of the current cost, or $60m, over the next three years by moving people from the sickness and invalid benefits on to the dole.

    The invalids benefit is for people who are permanently incapacitated in terms of their ability to work. The sickness benefit is for people who are temporarily incapacitated. The invalids benefit (at $173.06) is higher than the sickness benefit ($144.22), which, in turn, is usually higher than the unemployment benefit ($138.46).

    The Compass programme run by the Income Support Service is also hoping to reduce the numbers of single parents on the DPB by getting them back to work. The Christchurch pilot programme was last week featured on TV3 news and showed that of the 300 beneficiaries on the programme, a third are now off the benefit, and 25% of these have gone into employment. Budget night funding announcements will mean that every office of Income Support around the country will soon have a Compass co-ordinator. Programme organisers are predicting that Compass may help cull the DPB rolls by 30,000 people.

    The government is already committed to employing 1000 more teachers as part of their strategy to lower the pupil-to-teacher ratio, and the Budget announced they will spend $1.9m on getting former teachers to return to school work. But NZPA reports that further teachers are still needed. About 200 primary teachers will be needed to meet the expected primary school roll growth, and an extra 580 secondary teachers are expected to be needed in the secondary schools to cope with the decision to raise the school leaving age to 17. The major demand will come next year when the primary schools will be an estimated 1200 teachers short.
    Source Sunday Star Times, 4/6/95, `Last resort' teachers touted to fill jobs

    Student Job Search was dealt a $90,000 cut in funding on Budget night, forcing it to abandon plans to spread its services to new areas such as Taranaki, the Hawkes Bay and Invercargill. The service says it will also stop advertising and cut office maintenance. At present the service covers most areas that have universities or polytechs, and last year placed more than 30,000 students in jobs, exceeding its targets by 20%.
    Source New Zealand Herald, 10/6/95, Curbs on student job plan

    Funding for the Conservation Corps training scheme has been doubled from $4.9m to $9.3m, and the Youth Service Corps has been given $1.7m compared to $0.11m last year. The schemes are run by the Youth Affairs Ministry. The Conservation Corps trains young people in conservation, education and recreation, so they can go on to further training or find work. The Youth Services Corps sees young people doing community work such as working with the elderly and disabled people and recreational activities including canoeing, tramping and abseiling.

    The government has backed off plans for direct grants to encourage more Northland Maori land into forestry. Mathew Dearnaley reports in the NZ Herald that the Budget showed the government had decided against proceeding with direct grants, for which it already had a $2.5m reserve fund in waiting. The Ministry of Forestry has recommended that the government not proceed with direct grants, but instead work with Maori groups to help them find joint-venture partners. Ministry spokesman Warwick Foran says that the government decided two years ago to put the grants proposal `on ice' after unemployment in Northland started dropping. He suggested that the employment potential from forestry has been `oversold' in the north, saying that few new jobs were created in the early years of tree growth.

    The collapse of the Northwide Credit Union is sending shock waves through the 1400 members, more than 80% of whom are beneficiaries. The Credit Union, which has offices in the Northland towns of Moerewa and Kaikohe, was trading at a loss and had significant bad debts. The Registrar of Friendly Societies and Credit Unions stepped in and applied to the High Court to have the group wound up. Registrar Warren Sloan says that the members should recover 80-85% of this money invested. The members will have to wait for this money however, until outstanding loans (mostly short-term, up to one year) are repaid.

    Credit Union collapses are a rare event, the only other one in recent years being the Te Teko District Credit Union. Credit Union Association chief executive Winsome Stretch says that "each Credit Union is a separate and independent business owned and operated by its members. The closure of Credit Union Northwide has no effect on any other Credit Union..." The closure does however represent an important challenge to the Credit Union system in NZ. There is no statutory body with the powers to pro-actively exercise authority, on behalf of the members, when a Board of Directors becomes ineffective. The Credit Union Association has been attempting to convince different Governments since 1989 of the value of a mandatory supervisory body for all Credit Unions.

    The Dominion, 8/6/95, Co-ops that try to be better than banks

    From the middle of next year, weekly unemployment and sickness beneficiary payments will be staggered over Tuesdays, Wednesdays and Thursdays, in measures that will make it easier for low-income people to budget, and will also avoid the congestion experienced by banks and shops on the present Thursday pay-outs. The widows, domestic purposes and invalids benefits will also be paid weekly, instead of fortnightly, from 1st July 1996.
    scc, The Dominion, 27/5/95, Pay day shifting for beneficiaries

    The Auckland Institute of Technology is to establish a `one-stop' shop career centre which will help graduates "transfer their qualifications into jobs" by helping them to prepare resumes, train for interviews, provide library services, counselling and visits to the campuses by employers. The career centre is based on a successful model operating at the University of California, and will be a first of its kind in NZ. The centre is to be sponsored by the fast-food giant McDonalds who is putting in $330,000 over three years. The sponsorship deal includes the opening of a McDonalds restaurant on the AIT campus.
    Source New Zealand Herald, 12/6/95, Fast-food giant funds AIT

    A report on The Status of Young Women in NZ shows that young women university graduates earn significantly less than men of the same age with no qualifications. The report is to be published later this month by Womens Education coalition of Aotearoa in preparation for the UN Conference on Women in Beijing this September. The report, based on Statistics NZ 1993 household economic survey, shows that young men with no formal educations earned on average $387.20 a week, compared with the average $379.10 a week earned by women with bachelor's degrees. Author Angela Howell told the Dominion that the future prospects for today's young women "seem alarming when a university education provides no assurance of financial independence ..."
    Source The Dominion, 1/6/95, Graduat women's pay lags behind men's

    The NZ Food and Beverage Exporters Council says that their billion-dollar industry needs more recruits. Council executive director Melissa Hodd told a recent food technology conference that for every batchelor-level graduate, there were two or three vacancies. Even with an 8% increase in the number of graduates each year over the next 7 years, there will still be a shortfall of about 200 graduates. Food technologists work in the dairy, meat, seafood, fruit, vegetable, wine, beer, baking and confectionary industries. They are concerned with the technical aspects of food safety and hygiene or with packaging and storage.
    Source New Zealand Herald, 31/5/95, Skills in demand. New Zealand Herald, 31/5/95, A job with a future

    The strongest growth in employment in 1993-94 was among the self-employed. They represented slightly more than 20% of all employed people in 1993-94, compared with less than 18% in 1987-88. Statistics NZ.
    Source The Dominion, 31/5/95, Self-employed feature in job growth

    Britain is facing a shortage of up to 500 sheep shearers this season leading to fears that thousands of their sheep will remain unshorn throughout the summer. British farmers are dependent on imported labour to do the shearing, and up to half the British flock are traditionally shorn by Kiwi and Australian shearers who travel to the UK on working holiday permits. This year, however, the British have introduced tougher rules on work permits which mean the shearers have to get a full work permit before they leave NZ. The rising Kiwi dollar against the British pound is also dampening the enthusiasm of Kiwi shearers to take the British work, when better rates are available in Australia and North America.
    Source The Daily News, 8/6/95, Dollar, work rules bring UK shearing crisis

    In France, the new conservative PM Alain Juppe has unveiled a new government programme aimed at creating jobs, helping the young and long-term unemployed, raising the minimum wage, improving pensions and building emergency housing for the homeless. Mr Juppe is to chair an emergency meeting on the employment issue, and his new cabinet will contain such portfolios as the Fight against Poverty, Solidarity among the Generations, Social Integration and Troubled Neighbourhoods. The meeting reflect the will to heal the "social fracture" caused by a high jobless rate of 12.2% in France.
    Source The Dominion, 25.5.95, Juppe pushes jobs for France

    The concept of portfolio employment, popularised by the futurist Charles Handy, is an approach to employment where your livelihood is pieced together by working on a variety of projects or tasks. A portfolio career can be a mixture of part-time jobs, or a combination of part-time with temporary, contract, self-employment or consulting work. Many workers are choosing, or being forced, into `portfolio' careers - as a necessary accommodation to the realities of the present job market. Companies are cutting down on permanent full-time positions and adding more temporaries, part-timers, job-sharers and outside contractors.

    Some indications of a trend towards more temporary employment and `portfolio' careers are starting to show up in employment statistics, especially in the USA. According to the Bureau of Labour Statistics, the biggest job growth in recent years has come in industries that traditionally use more part-time workers, such as in the service and retail sectors. The so-called `temp' industry, although representing less than 2% of the US total employment, was responsible for 11% of the increase in US employment in the last three years.

    Source Los Angeles Times.

    NZ employment statistics also show a steady rise in part-time jobs during the last five years, and the slower growth in full-time work (see last Jobs Letter). The number of people holding more than one job jumped 12.4% in 1993-4, the largest increase since 1990-1991. Women made up 71% of the new multiple job-holders. - Labour Market 1994 (Statistics NZ)
    Source The Dominion, 31/5/95, Casuals play bigger part in job figures

    Author William Bridges (Job Shift) believes that there is so little security in even the 9-5 jobs of today that we should all consider ourselves temporary workers in the changing economy of the 1990's. Bridges : "Security in today's job market come from employability, and employability is something in you, not in the job..." Amidst a marketplace of temporary and precarious jobs, it may be your `portfolio' career that offers you more security. William Bridges compares employment to investing : " Just as investment counsellors say its a mistake to invest all your money in one stock, or just in stocks ... so too is it a mistake to invest all your emotional security or career assets in one `job'..."
    Source LA TIMES by Donna H Walters, staff writer, "'Portfolio Career' May Replace the Old 9-to-5"

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