When allocating Ministerial portfolios Prime Minister Helen Clark surprised many people when she appointed David Benson-Pope to succeed Steve Maharey as Minister Social Development and Employment.

Benson-Pope is ranked 14th in the new Cabinet. His predecessor Maharey was ranked 4th.

Source — media release NZ government, 19 October 2005, "Ministerial portfolios allocated".

AIR NZ TO CUT 600 JOBS

Air NZ chief executive Rob Fyfe says the airline faces rising costs and increasing competition, particularly on trans-Tasman routes. It has increased its fuel surcharge four times since May last year because of rising jet fuel costs. Fuel makes up about 30% of the airline's costs now, up from 20% a year ago.

The airline has faced declining volumes of engineering work due to the costs of getting planes to New Zealand, compared to cheaper options available when outsourcing the work to Asia and Europe. Air NZ estimates it will save $100m over five years by sending its own Boeing 747s, 767s and 777s overseas for maintenance rather than doing the work itself in New Zealand.

The New Zealand Herald reports that Air NZ's heavy maintenance operation was, just four years ago, regarded as the "jewel in the crown" of what was otherwise a loss-making airline. But it is taking big hits from large overseas competitors, compounded by this country's remoteness. This has meant that the high proportion of overseas airlines business formerly using the heavy maintenance operation has all but dried up.

Air NZ's chairman John Palmer says the decision to outsource maintenance was taken "with a very heavy heart". He told a shareholders annual meeting this week that fuel costs are estimated to increase by about $300 million on last year. The company will recover around $200 million through ticket surcharges, but such charges were likely to affect demand. Palmer warned the shareholders to expect a big tumble in profits this financial year, down from $235m in 2004-2005 to about $100m.

The workers say they will plead to the government for intervention to save their jobs. (The government owns 82% of the airline after a $1 billion taxpayer bailout in 2001). They argue that the depth of the cuts to a highly skilled workforce, which they warn will be irreplaceable once disbanded, makes it an issue of national interest.

A spokeswoman for Finance Minister Michael Cullen told the New Zealand Herald that he viewed Air NZ's announcement as "... entirely a matter for the company."

Aviation and Marine Engineers Association general secretary George Ryde says many of those facing redundancy were recent recruits with student loans of up to $40,000. He called on the government to waive their loan repayments, at the very least.

Source — Stuff website 19 October 2005 "Air NZ to cut 600 jobs" ; New Zealand Herald 20 October 2005 "Air NZ set to axe 617 jobs" by Matthew Dearnaley; Sydney Morning Herald 20 October 2005 "New Air NZ boss aims to sack 600 workers" by Scott Rochfort

OIL PRICES AFFECTING NZ BUSINESSES

The high cost of diesel is having the same effect on fishing businesses right around New Zealand and it's not just the smaller operators who are hurting. Port Nelson Fishing Association president Darren Guard points out that some of the larger vessels burn up to 300,000 litres of diesel for a six-week trip. Guard: "Now you put that in a dollar value and you tell me that doesn't hurt".

One result is that the bottom has fallen out of the market for inshore commercial fishing boats. Nelson fisherman Alan Basalaj: "Nobody wants to get into this industry at the moment. You don't make money from it so why invest big money in it?"

Source — TV One news, 30 June 2005, "Fishermen hit by diesel price" by Catherine Loft

Christchurch-based Delex Couriers runs a fleet of 14 owner-operator vans. Managing director Andrew Campbell says fuel-price rises have forced the company to increase fees— the first price rise in five years. Campbell says the company held off as long as possible: "But with prices steadily rising we couldn't carry the cost any longer."

Source — The Press, 30 June 2005, "High fuel a drain on business", by Mike Houlahan and Beck Eleven;

WHAT IS DRIVING THE RISE IN PRICES?

• In the past, oil prices have spiked as a result of political events. The price of petrol doubled when Arab countries withheld their oil in protest of the United States siding with Israel when it invaded Egypt in 1973. And petrol prices shot up again in 1979-80 when Iranian oil was taken off the world market due to the revolution in that country. Following those spikes, prices returned to previous levels.

But never before has there been such a long, steady rise in the price of oil as a function of the market. The price of oil has risen from $30 per barrel in May 2004 to well over $60 per barrel today. The damage hurricanes Katrina and Rita did to oilrigs in the Gulf of Mexico and coastal United States refineries pushed prices up, but no one is holding the hurricanes responsible for the longer-term rising price of oil.

Source — Media release Marathon Oil Company, 24 September 2005, "Marathon Oil Hurricane Rita Update #2; Science Daily 2 September 2005, "Georgia Researchers Project Hurricane Effects On Oil, Gas Production" by University of Central Florida.

IS OIL PRODUCTION PEAKING?

Campbell: "Oil depletion is such a sensitive subject, which many people, especially those in government, prefer not to know about. But there are many solutions, especially in finding effective ways to use less, provided governments take effective action in time. It is too serious a subject to be left to the whims of an open market."

Click on image to go to Dr Colin Campbell's website

Source — A paper published by ASPO, 3 May 2005, "The Second Great Depression : Causes & Responses" by Colin J. Campbell; media release IEA, "Resources to Reserves - Oil and Gas Technologies for the Energy Markets of the Future". Financial Times, 4 August 2005, "Big Oil warns of coming energy crunch" by Carola Hoyos; media release IEA, 22 September 2005, "Resources to Reserves - Oil and Gas Technologies for the Energy Markets of the Future"; "Oil Depletion - Updated Through 2001" by C J Campbell.

LEADERSHIP IN THE ERA OF DIMINISHING OIL

Richard Heinberg, lecturer and author of Power Down says that communities need to recognise the immensity of the problem and begin focusing their strategies to ease them through the transition out of the "oil age".

Heinberg: "I have been travelling around the US speaking to city councils and citizen groups in various places about what can be done to size up vulnerabilities and strengths at the local level to begin dealing with the impacts of peak oil. The pain is going to be felt very largely at the local level, where people will no longer be able to get to work or to get to the store where they can buy their stuff. The stuff won't be getting to the store because the trucks won't be running. People will be having difficulty heating their homes. So these are problems that will have to be managed largely at the local level. And so city and county officials need to be alerted and need to be strategizing and planning for long-term — finding ways to produce food, more food at the local level for local consumption, making sure that local water supplies are tied to energy sources that are not vulnerable to this problem."

Source — Richard Heinberg at the Roscoe Barlett Energy Conference, 26 September 2005.

— Powerdown: Options and Actions for a Post-Carbon World, (September 15, 2004), published by New Society Publishers , ISBN 0865715106 can be found here

MAYORS TASKFORCE CHANGES

Moore has put an enormous amount of time and energy into creating the Taskforce, and under his leadership the initiative has grown from a small group of seven Mayors to 67 Mayors (or 90% of all Mayors in New Zealand). Just this year, Moore also led a deputation of Mayors to Australia to encourage a group of New South Wales Mayors establish a similar initiative.

New Taskforce chairman Paul Matheson says he is keen to take on the role and lead the work towards guaranteeing all young people a bright and prosperous future in New Zealand. Matheson: "The power and strength of the Taskforce is in our collective ability as Mayors to speak to the whole community, take civic leadership and facilitate the collaboration and genuine partnerships across all sectors, which is so crucial to our vision ... The Mayors' goal is already supported in most communities by many big businesses and by parents and families everywhere. I look forward to working with our partners and continuing the great work of all those involved with the Taskforce."

NELSON MAYORS FORUM

— for further inquiries, contact Kath Inwood, Nelson City Council, PO Box 645, Nelson. email kath.inwood@ncc.govt.nz . There will be some assistance available for transport and accommodation for community participants.

HIGHLY SKILLED STILL HARD TO HIRE

However, employers looking for highly skilled workers are continuing to find their task difficult. The Job Vacancy Monitor found that highly skilled workers — including engineers, health workers, teachers, lawyers, architects and accountants — rose 24% since this time last year. And job vacancies rose a huge 54% in the information technology sector.

— the Job Vacancy Monitor can be found here.

Source — New Zealand Herald, 7 October 2005, "Demand rising for top job skills" by NZPA; media release by Department of Labour, 6 October 2005, "Skill shortages easing; sector disparities".

AGED-CARE WORKER STAFFING LEVELS TOO LOW

The NZNO calls for re-establishment of minimum staffing level standards. Spokesperson Cee Payne-Harker says that at the time the Standards NZ handbook was issued, the establishment of minimum staffing levels was opposed because an accompanying report stated that `most providers already work within the recommended staffing levels', and thus there was no need to enforce staffing level minimums. Payne-Harker says this is clearly not so and the government needs to provide substantially more money to the sector, specifically for improving staff wages and conditions, and to set minimum staffing levels. Payne-Harker: "It's at crisis point and the crisis is deepening."

Source — Media release NZNO, 3 October 2005, "Staffing Levels in Aged Care Below Ministry Guidelines"; Herald on Sunday, 2 October 2005, "Aged suffer in staff crisis" by Amanda Cameron.

HEALTHCARE WORKER SHORTAGE

Source — Media release Health And Disability Group, 30 September 2005, "Aging population faces health workforce crisis".

DEFENCE FORCES SHORT OF STAFF

Chief of Defence Force Air Marshall Bruce Ferguson says the recovery of personnel numbers will be a high priority over the next three years. But at current attrition rates —and recruiting targets — Ferguson expects it will take up to 10 years to increase the Defence Forces to the desired strength with people who have the required skills and experience.

Source — New Zealand Herald, 29 September 2005, "10 years to fix armed forces staff" by Kevin Taylor; The Dominion Post, 17 October 2005 "Army 2000 troops below strength" by Hank Schouten

TRADES SHORTAGE AFFECTS SCHOOL TECHNOLOGY PROGRAMMES

Post Primary Teachers Association president Debbie Te Whaiti says too few technology graduates are entering teaching as trade shortages meant many could earn more working in industry.

Source — Dominion Post, 11 October 2005, "Teaching technology hit by lack of tradesmen" by Michelle Quirke.