Labour Electorate Committee - New Plymouth

Welcome

Good evening. It is a real pleasure to be making this speech to party members five years into the term of a Labour government that has driven unprecedented improvements in job opportunities, economic growth and employment conditions.

This is in direct contrast to the 1990s, when privatisation, regional decline, job losses and National's attacks on workers' rights with the Employments Contracts Act all contributed to hit ordinary New Zealanders hardest. There was a time when the gap between the haves and the have nots widened and ordinary New Zealanders were being shut out of opportunities. Not anymore.

Labour is committed to improving the lot of all New Zealanders – not just a few. I hear now Don Brash wants to drag the country backwards to the last century by unpicking all our good work in the labour market. He keeps peddling the tired and failed policies of the 1990s – as if he is oblivious to what has happened.

We have made a real difference to the strength of the economy and people's incomes. It is hard to see where Don Brash is coming from. The figures I am about to give show very clearly that we don't have to sacrifice working people's well-being for economic gain. Indeed, they go hand in hand.

Achievements
Economic growth under Labour has been high –around 3.5% a year since 2000. This growth has been concentrated in domestic sectors (e.g. construction, education, hospitality), which have benefited from high population growth, low interest rates and previously high farm incomes.

The number of people in work has risen considerably in the last 4 years – a combined rise of around 193,000 or 10.8% between March 2000 and March 2004 quarters. High job growth has seen the unemployment rate fall from 6.3% in March 2000 to 4.3% in March 2004, a 16½ year low.

This strong economic base is one of the reasons why this Government has been able to start making a real difference to working New Zealanders' lives. And it is important to remember that the gains made in the labour market have been complemented by policies that improve people's lives in other areas.

BUDGET 2004 – FAMILIES' PACKAGE
Budget 2004 delivered for ordinary New Zealanders. 61% of all families with dependent children are eligible for an average extra $66p/wk. Families in the $25,000-$45,000 range will get up to $100 extra each week.

HEALTH
3.5 million New Zealanders are now enrolled in Primary Health Organisations, which give them access to cheaper healthcare. 93% (98,000) of people in the Taranaki catchment are enrolled in PHOs.

EDUCATION
The government is committed to lifting the education standards of our children and the $2 billion we are pumping in over the next four years proves this.

Since 1999, Labour has put over 2,000 extra teachers in classrooms over and above the extra teachers that have been required for roll growth. We've also increased overall school operational funding per-pupil by an average of 10.1% in real terms. That means schools are now receiving over $85 million more in real terms than they were in 1999.

HOUSING
Almost 10,000 households were newly housed in state housing last year, representing about 29,400 people. We re-introduced income related rents for state house tenants. To help make sure home ownership remains within reach for low and modest income earners we have introduced a mortgage insurance pilot.

No matter how you look at it, ordinary New Zealand families are better off with Labour.

The Economy

The Labour-led government wants a growing economy and all New Zealanders to share in this growth. Our aim is to return the country to the top of the OECD in all major economic indicators. I believe we are well on the way to achieving this if we don't let Brash and his cronies interfere.

The Government’s Growth and Innovation Framework is about tuning the economy for growth. It is about the whole economy, including:

• Getting good ideas to market
• Developing skills and talent
• Increasing global connectedness
• Strengthening the foundations of the economy

But it is also about extending the scope of our economic activity into the emerging high growth, high value sectors which are the hallmark of successful economies. Key areas of focus are biotechnology, creative industries and information and communication technology.

Labour Reforms

Looking now at the Labour market, the Government since 1999 has introduced a series of legislative amendments that recognise the importance of fairness in the relationship between workers and employers. This government has proven that positive outcomes for workers and business go hand-in-hand.

I’m focused on active labour market policies that can underpin our future economic performance.

Lets briefly look at what this government has achieved for working people in less than five years. I will return to these in more detail later.

• Employment Relations Act 2000
• Holidays Act 2003
• Health and safety – employee participation, increased coverage
• Minimum wage increases every year since 1999
• Paid parental leave entitlements
• Employment relations education leave
• Re-nationalisation of ACC

Current Labour Market Themes

Aside from these, there are many other things this Government is pushing ahead with.

Workplace Productivity
When I talk about the labour market in New Zealand, I talk a lot about the need to lift workplace productivity. This is because New Zealand has the potential to build on the steady economic growth that we have enjoyed over the last few years – not by working harder, but by working smarter.

People are the powerhouse of the New Zealand economy. How people use their time, their skills, their capabilities and their resources will drive the gains in productivity that lift economic growth.

Over the last couple of decades, many New Zealanders have associated productivity increases with cost-cutting and job losses. The Government’s current focus on workplace productivity is fundamentally different. We’re looking for business practices that improve timeliness and quality, minimise costs and waste, and involve employee participation in innovation and technology. We’re looking at ways to improve the return on investment in our workplaces – whether it is new plant and equipment, new workplace practices, new technologies or new skills

In short, we’re looking for business practices that improve productivity and quality of working life. Three recent initiatives that are very relevant to these goals are the Workplace Productivity Working Group, the Work-life Balance project, and the Taskforce on Pay and Employment Equity.

Workplace Productivity Working Group
In February 2004, the Government established a Workplace Productivity Working Group to advise on ways for industry, businesses, unions and employees to work smarter, and more productively.

The Working Group is tripartite in makeup – comprising business, union and public sector representatives - and is a good example of a partnership model in action. It has been examining successful business practices that are already in place and looking at how to promote the importance of improving workplace productivity to government and the community.

The Working Group will not be answering all the questions about productivity, but will stimulate the debate, pull together information, give examples of best practice and help identify priorities for further work.

The Group will report back shortly to a Ministerial reference group that I am coordinating, which also includes the Ministers of Economic Development and Finance. I expect that a Government response to the Group’s report will be provided in mid September.

Work-life Balance Project
To deal with the pressure many workers report in the workplace, last year the Government established the Work-Life Balance Project. The vision of the project is that New Zealand is a great place to live and work. This means that people can effectively use their energy and skills to participate in paid work as well as all the other things that are important to them, our society and the economy.

This project involved a diverse range of organisations that have become project partners, and over 700 organisations and people have made submissions. My colleague Ruth Dyson released the key findings of the project last month. We are now considering the levers the government has to deal with the complex issues raised.

Pay and Employment Equity
Last year we set up a taskforce to provide advice on how the factors contributing to the gender pay gap apply in particular parts of the public service and public health and public education sectors. We also asked for advice on a five-year plan of action to address those factors.

The Government has now endorsed the recommendations of the taskforce, and is beginning to implement them.

• The development of tools to help assess pay and employment equity is proceeding now.
• We will be finalising processes for remedial settlements of pay equity claims, by the end of July.
• A dedicated unit to oversee the implementation of the action plan is being established within the Department of Labour.
• A tripartite steering group is going to oversee that unit and provide leadership for the plan.

Skills and participation in the workforce
This is where labour, education and employment policies coincide. We are addressing the labour and skill shortages. These look at what we can do within the next few months, within the next few years, and in the longer term. These policies span training and development through programmes like modern apprenticeships and a more strategic approach to tertiary education.

• The Tertiary Education Strategy provides a five year blueprint for a more collaborative and cooperative tertiary system that contributes to the upskilling of New Zealanders
• Industry Training Organisations are now playing a stronger leadership role for the long-term interests of the industry as a whole – which includes putting mechanisms in place to get early warning of emerging skill shortages and how they can be addressed.
• The Industry Training Strategy has grown in strength and importance since 1999, with large increases in both trainee participation and achievement of national qualifications. There has been a large expansion in investment by both government and industry, with a shared target of 150,000 trainees during 2005. The Government approved in last year’s Budget an additional $84 million over four years for industry training to achieve this target.
• Modern Apprenticeships have proved to be very popular among stakeholders and the public. The Government has responded by increasing investment in this programme each year, enabling increasing numbers of young New Zealanders to participate. By the end of March 2004, there were 6,580 Modern Apprenticeships throughout New Zealand, in 30 industry areas.
• Government is also funding tripartite initiatives called Skill New Zealand, involving Business New Zealand and the CTU, to create greater awareness among workers and employers of industry training and workplace learning. The present focus of the campaign is on four industries (Retail, Tourism, Hospitality, and Furniture) where penetration of industry training is considered to be lower than in other sectors.

Much of the progress we hope to make will be driven by setting ambitious targets and challenging business, employees and institutions to work together to meet them.

We want to keep people up-skilling throughout their working lives, to keep pace with changing business needs and opportunities. We have a challenge to meet head on in both foundation and higher-level skills, if New Zealand workers are to be prepared for working life in 2005 and beyond.

Our first responsibility is to get New Zealanders into work. Secondly, if a shortage remains, we must do everything possible to train kiwis to give them the skills we need.

However, in some cases it may be necessary to use our immigration policy to provide the workers and skills that the economy needs.

Let me make this clear, this is not at the cost of jobs for New Zealanders. We are very careful that we only look offshore when it proven beyond doubt that we need help to fill a particular skills shortage.

Where there are skills gaps, we are now going overseas to target the people we want to fill them. This is how immigration policy also plays an increasing role in contributing to New Zealand’s economic growth. Immigration has a role to play where gaps are short-term (for example, temporary work visas) and longer-term, where our new skilled migrant policy will take effect. This new skilled migrant policy is already lifting the standard for people wanting to come to New Zealand to live and work.

It's about quality, not quantity – an important distinction between Labour's policies and those of the past.

Employment Relations training
Employment Relations Education and a contestable fund established in 2000 contribute to improving workplace knowledge, productive relationships and health and safety awareness and understanding. $ 2 million dollars is available via the contestable fund each year.

Examples of courses and projects include health and safety training targeting small businesses, forestry workers, farm workers, residential construction workers and adventure tourism workers; training for union delegates and courses on problem solving. 48 organisations have approved employment relations or health and safety courses.

ACC
The failed National experiment to privatise ACC was ditched by Labour in 2000 with the re-nationalisation of ACC. Now working people have access to proper compensation and rehabilitation when they are injured at work, the original intent of the scheme.

Labour market reforms
Looking at our labour market reforms in more detail shows very clearly how much has been done for working people and their families.

When we first came to power and were committed to improving the lot of the ordinary kiwi worker, there were doom and gloom predictions that our labour policies would do all manner of things to the economy. It was predicted, for instance, that industrial conflict and wage growth would skyrocket, and productivity and employment would plummet.

Indeed the Business Roundtable released a media statement at the time saying the bill was "a huge setback to economic growth and employment prospects…"will create fewer jobs….and more industrial disruption." As we all know, none of this has come to pass. In fact the complete opposite has occurred. Job numbers are up while unemployment and strikes are down.

Employment Relations Act
In 1999 we repealed the Employment Contracts Act and in 2000 the Employment Relations Act was passed. Generally, the ERA is working well but we always said there would be a review of the ERA after an appropriate length of time to see if it was meeting all of its aims and objectives. That's why we introduced the Employment Relations Law Reform Bill last year. The Bill will be in force by the end of 2004.

Some of the key issues currently being considered by the Select Committee are good faith; ‘freeloading/ passing on’; ‘genuine reason’ for not concluding a collective; MECAs; vulnerable worker provisions; personal grievance provisions.

The committee reports back to Parliament on 13 September.

In addition to employment relations there are a number of other measures including:
Holiday's legislation

• 4 weeks annual leave from 2007
• Increased entitlements to sick and bereavements leave
• 11 public holidays a year continues. Payment for work on a public holiday is time and a half for the time actually worked and a paid day off in lieu.

Minimum Wage

• We have steadily increased the minimum wage every year since 1999 with a 5.9% pay increase from 1 April 2004 to $9.00 an hour (workers aged 18 and over)
• The minimum youth wage (workers aged 16 and 17) has increased from $6.80/hr to $7.20/hr.
• The Minimum Wage Act was also amended in March 2003 to allow for a minimum training wage to be set for trainees aged 16 or over whose training agreement requires them to do at least 60 credits a year towards a qualification on the National Qualifications Framework. The trainee minimum rate is the same as the set youth minimum wage.

Paid Parental leave

• Entitlement to 12 weeks paid parental leave was introduced in 2002.
• Enhancements to the scheme was introduced this year - extending ppl from 12 to 14 weeks – to be phased in over a two-year period from 1 Dec 2004
• It will now be easier for employees to qualify for paid parental leave. Employees who have worked for the same employer for six months or more will now qualify for ppl. (Currently employees have to be in paid employment with the same employer for more than 12 months).

I have mentioned the improvements to holidays' entitlements earlier. A critical achievement has been the introduction of 4 weeks leave, due to come in on 1 April 2007. However since the rest of the Act came into force on 1 April 2004, there have been some implementation issues and many of you will be familiar with these, eg what you get paid if you're rostered to work on a public holiday and are sick on the day and cannot work. I have established a working party to look at the issues and I intend to introduce legislation to clarify matters before Labour Weekend. In my view the Act needs to be clarified for everyone's benefit.

The key point is that the new Act is now establishing consistent provisions that begin to make New Zealand competitive in the international labour market. I find it interesting that politicians from some political parties who have four weeks leave are so keen for other New Zealanders not to have the same entitlements. These same politicians want New Zealand to catch up economically with Australia don’t support the move to 4 weeks leave – something Australian workers have enjoyed for some time. The best example of this double standard is Don Brash, who as Reserve bank Governor enjoyed four weeks annual leave as of right. He has said he will repeal four weeks' annual leave. My message to you all is this: Don Brash wants to take a holiday. Yours.

Conclusion
As I've outlined today, New Zealand has experienced some good economic growth in the last few years, but we can’t relax. We have to remain competitive globally so we can keep heading to where we want to be. Any easing of economic growth over the next few years will have knock-on consequences for the labour market.

Then there are Don Brash's plans to turn back the clock to a time where workers' rights and conditions were overridden by big business needs. Everyone would agree a fair go for all is an important part of what it means to be a kiwi – but it seems that Don Brash doesn't.

He wants to repeal the ERA, get rid of four weeks holidays for everyone and fair pay for working public holidays. He wants to take us all back to last century and beyond.
For the first time in many years, thanks to the government's policy drive, workers and employers are working together to make this country a better place. Make no mistake; Nationals' plans will hurt ordinary New Zealanders.

We have achieved a lot but there is always more to do. A partnership approach between business, unions, workers, and the Government is vital for New Zealand's continued economic growth. This Government is committed to providing a higher-skilled, higher-paid economy now and in the future.