Department of Labour chief executive James Buwalda predicts that even though there has been a slight easing of the labour market, it will continue to be difficult for business and industry to find staff in 2006. Skill shortages are still at the top of the list of problems for firms with less than 20 employees. Buwalda: "With unemployment at 3.4%, and the economy still going strong, skill shortages continue to be apparent across most industries and regions, to varying extents."

The department's focus this year will remain on addressing skill shortages through a "range of measures from increasing productivity, attracting skilled migrants and expatriates to New Zealand who can contribute to economic growth, as well as input to training and education initiatives."

JOB VACANCY ADS NUMBER SLIGHTLY LOWER

The Department of Labour's most recent Job Vacancy Monitor found the greatest falls in job ads were for scientists, architects and engineers, health technicians, finance and sales workers, and in the building and printing trades.

But, some industries had increased job vacancy ad levels. Ads for specialist information technology staff rose the highest (+24%), and ads for the food industry workers, social workers and furniture and textiles workers all rose significantly.

ECONOMY TEETERING

Strength in parts of the economy may soften or avert a recession. Macquarie Bank economist Tim Bowring says virtually full employment, steady immigration and resilient housing markets may soften the blow.

But rising oil prices or a bird flu outbreak could tip the scale. UBS economist Robin Clements points out that in previous recessions, outside shocks had acted as a catalyst and oil prices or a pandemic could play that part this time. Clements: “When you get the economy at this fragile level, it doesn’t take much to knock it over the edge.”

Treasury is predicting the economy will grow by 1.7% in the year to March 2007. Economic growth was just 0.2% in the September 2005 quarter and over the year through September was 2.7%.

Source — Dominion Post, 18 January 2006, "Plummeting confidence sparks recession fears" by Adrian Bathgate; Dominion Post, 7 January 2006, ""Downturn fears may be factor in top stock picks" by Gareth Vaughan; New Zealand Herald, 23 December 2005, "Poor GDP lowers rate-hike prospects" by Brian Fallow.

CHANGES TO WORKER IMMIGRATION RULES

The higher points criteria comes with added flexibility for the department. Applicants who have a points tally below 140 — but have a job or job offer in New Zealand — may also qualify. Cunliffe: "This flexibility will enable us to keep tailoring the category to meet employers' needs, while taking into account the suitability of applicants. Migrants that can prove employers want to hire them to fill vacancies are the ones New Zealand needs."

TEMP VISITORS MOST LIKELY TO GAIN RESIDENCY

In the 2004/05 year, 82,500 people were issued permits to work in New Zealand — up 12% on the previous year. Over 21,000 young people were here on working holiday schemes. And 77,600 people came on student permits.

Even so, only 6,157 more people arrived to stay long-term than left — about half as many as the year before.

Source — Media release Minster of Immigration David Cunliffe, 20 December 2005, "Immigration benefits New Zealand, research shows" Media release Minster of Immigration David Cunliffe, 21 December 2005, "Changes to Skilled Migrant Category to benefit NZ employers" New Zealand Herald, 22 December 2005, "Migrant quota raise to 51,500" by Ruth Berry; New Zealand Herald, 16 January 2006. "'Suck it and see' migration growing" by Julie Middleton.

MINIMUM WAGE RISING

Dyson reiterated the government's election pledge to lift the adult minimum wage to $12 per hour by the end of 2008, "if economic conditions permit".

Source — Media release Ruth Dyson, 21 December 2005, "Minimum wage to increase"; media release Green Party, 21 December 2006, "Workers deserve a bigger pay rise, say Greens".

YOUTH RATES DEBATED

Source — Media release Employment Manufacturers Association Northern, 21 December 2006, "Youth rates get young people started at work".

NZ EASIEST PLACE TO DO BUSINESS

Minister of Finance Michael Cullen says the World Bank survey is an important reminder that New Zealand has a light-handed regulatory regime and a strong pro-business environment. Cullen: "The fact that we have been able to combine these with good environmental standards, health and safety protections and respect for workers' rights is something of which we can all be proud."

The World Bank ranked Singapore the second easiest countries to do business in and the United States third. Australia ranked sixth and Britain ranked ninth.

Source — Media release, Michael Cullen, 20 December 2006, "Survey results welcomed".

FUEL PRICES AFFECTING BUSINESSES

The survey of 300 firms also found that fuel prices are creating cost pressures. These come in the form of increased supply costs, increased freight and courier costs, a reduction in discretionary business spending, changing customer habits and spending, difficulties in quoting for jobs and contract pricing. Venture Taranaki chief Stuart Trundle says that half the region's businesses had increased the price of their goods or services because of soaring fuel prices. And many of those who hadn't changed the prices yet, intend to. Trundle: "This will continue to be a major factor in business for 2006 if petrol prices look likely to remain unstable in the tightening national economy."

Source — Taranaki Daily News, 22 December 2005, Increasing fuel prices: Tanks a lot, say firms in survey" by Krysti Wetton.

PRISON GUARD HIRING CRITERIA RELAXED

The employee selection tests administered by the Department of Corrections have also become easier to pass. Previously, a person failing a prison guard selection test had to wait one year before they were allowed to re-sit it. Now, on failing a test, an applicant can receive tuition on the parts of the tests they failed and can re-sit it as soon as they like.

The department needs to hire 600 staff next year —included in a total of 1,800 over the next four years — mainly to staff new prisons.

Source — Dominion Post, 16 January 2006, "Prison jobs open to crims" by Chalpat Sonti.

SEASONAL WORK PERMITS FOR PACIFIC PEOPLES

But Zinck asks Pacific peoples wanting to work on New Zealand farms to appreciate the opportunity and return home when their term expires. Zinck's comment comes after Prime Minister Helen Clark voiced concern that temporary Pacific workers might overstay their permits. In aid of this, Fiji is considering asking the New Zealand government to change regulations so that Pacific peoples only receive 20% of the money they earn while they are still in New Zealand, with the remaining 80% sent directly home.

Source — Fiji Times, 5 January 2006, "NZ offers work for island people".

DENMARK KEEPS HIGH-END JOBS AT HOME

The mirror side to the highly educated work force is its flexibility. Danish labour laws allow companies to hire and fire people easily. They can do this because dismissed workers collect generous welfare benefits and, being highly skilled, they are quickly guided into new jobs. Trade unions go along with this because, unlike most of their counterparts around the world, their aim is to boost overall employment rather than to defend each and every job. As a result, workers come and go, gravitating through companies and the economy to where they are most needed. As a result each year, about 30% of Danish workers change jobs, one of the highest rates in the OECD. Even so, Danish unemployment is 4.7% — is about half of the euro-zone average.

The price that business pays for the flexibility to hire and fire with relative ease is high wages. The average hourly manufacturing wage in Denmark is 73% above the OECD average. And taxes are also high: up to 63% is collected through income tax to pay for schools, health care, unemployment benefits and — in constrast to other European countries, — the state funds almost all retirement pensions.

Of course, Denmark faces the same wage competition from Eastern Europe, India and China as other high wage countries. But where union leaders elsewhere fight a rearguard battle against globalisation, Danish labour unions and management essentially conspire to find ways to keep the high-end jobs at home. And they accept that lower-end jobs will go.

The Danish strategy for coping with their relatively high wages may be typified by manufacturer Novo. The company has recently closed a plant which makes the Novo Pen 3, a cartridge diabetics use to inject themselves with insulin. However, before the manufacturing equipment was shipped to its new site in China, Chinese workers came to Denmark to be trained by the people whose jobs they were replacing. Half of the displaced Danes will work assembling the new-generation Novo Pen 4, which will remain in Denmark for three to four years until production is perfected. The other half of the work force made redundant by the Novo Pen 4 closure went into an in-house job-training centre where were matched up with new jobs in the company. "Education, education, education—it's the only way to save jobs," says Novo senior shop steward Niels Erik Olsen. Danish adults spend an average of 4.3% of their working hours in on-the-job training, the highest in the OECD.

Source — Newsweek, 9 January 2006, "A Danish conspiracy," by Karen Lowry Miller.

MAKE POVERTY HISTORY: NOT NEARLY

Hertz argues that the failure of the Make Poverty History campaign to make real progress towards eliminating poverty was because it overly simplified the message and didn't want to sound too radical so as to appeal to more people. It also had to maintain unity among the huge range of organisations in its own ranks. Because of this, the overriding issue of justice — that is, how legitimate systems allow poverty to become so pervasive, power imbalances, and how people on the margins are not allowed to participate in decisions that affect their lives — never even made it into the Make Poverty History campaign.

Hertz: "A focus on justice would entail, for example, a push for a process that uses arbitration tribunals to identify and cancel illegitimate debts, such as loans knowingly made to tyrannical dictators who were never going to use them in the interests of their people. It will also involve demanding the creation of a mechanism for the repatriation of money stolen by corrupt regimes, the billions of dollars in offshore bank accounts that by right should be sent home. This will mean pushing our governments to put pressure on the big banks. The focus on justice will mean, too, a push for comprehensive and far reaching redistributive polices, both domestically and internationally, to ensure that those who are disproportionately gaining from globalisation pay for this privilege when the privilege is to the detriment of others. And it will mean putting pressure on the World Bank and IMF to allow countries to determine their own economic policies, a freedom that was not denied any of the rich countries of today when they were on their development paths."

Source — New Statesman, 12 December 2006, We achieved next to nothing" by Noreena Hertz.