Commentary

Government moving at pace on policy

June, 2021

By: Alan McDonald

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There has been a blitz of policy announcements from Government over the past month or so but the announcements often lack the clarity and detail that business needs to prepare for their introduction.

 There also seems to be little thought or detail to the transition from current state to future legislative environments.

The Climate Commission and various employment relations issues are current examples of making the goals clear but leaving uncertainty about the transition.

Employment relations proposed changes are too many, too fast and too costly. No-one is arguing against higher wages for New Zealanders, but all employers are seeing is a raft of changes forcing additional costs on their businesses in very short time frames.

Already this year we’ve seen additional sick leave, more paid paternity leave entitlements, an extra public holiday and increases to the minimum wage. We’ve been told to expect another three-year round of minimum wage changes and we’ll see the discovery draft of Fair Pay Agreements in the next couple of months. Unions are lining up to get these in place at more cost and less flexibility for employers.

Nothing about the Fair Pay Agreement legislation, rooted in pre-1991 industrial relations history, is suitable for or applicable to today’s requirements for flexible, adaptable and responsive workplaces.

Based on the criteria for FPA’s staff at just two large Auckland supermarkets could dictate terms and conditions for every retail employee and employer across the country. Every port in New Zealand will be bound by moribund work practices that were tossed out in the 1990s, with the subsequent changes making New Zealand’s key ports among the most productive in the Southern Hemisphere.

The budget contained the surprise announcement of considering a national insurance scheme to help manage redundancies in the workplace. There’s a worthwhile discussion to be had, particularly if such a scheme keeps the four weeks compulsory legislation draft firmly locked in an MBIE drawer. But there is nowhere near enough detail for the EMA to reach a position on such a scheme and much will depend on who funds it and how much of that cost falls on employers – again.

All these changes are adding costs to employers while we are seeing no measures to encourage further investment and enhanced productivity. You can’t transition to higher wages and salaries by only looking at one half of the equation

Similarly, the Climate Change Commission sets out goals that are hard to disagree with, but the transitions are either heroic or unclear. Where’s the pathway that shows the necessary encouragement to invest in new generation capacity as we apparently electrify our vehicle fleet and remove gas and coal from industrial processed heat?

You’d think the car companies would welcome subsidies encouraging middle class New Zealanders to buy EVs, but already Toyota has warned that the vehicles needed to replace petrol and diesel engines simply aren’t available.

The likely consequence is that our already old fleet of vans, utes and people movers will just get older and more expensive as current owners hold onto them longer and they become scarcer.

Elsewhere we are expecting the discovery draft of proposed RMA legislation in July, and we are watching for any progress on the immigration reset announced in May to much fanfare and absolutely no detail – not even the timing.

The Government has a mantra of hire Kiwis, bring in far fewer highly skilled immigrants, and train up your workforce.

But as a recent member survey shows, the demand for skills is split almost 50-50 between highly skilled and low to medium skills.

In the meantime, members are having to reduce production and work hours to match the available workforce and the availability of the materials still constrained by supply chain issues. Again, there is no transition plan to take us from relatively free access to migrant labour across all skill levels to very restricted access to a greatly limited migrant pool – whatever that looks like.

There are labour shortages across nearly all sectors and all regions of the New Zealand, and the economy suffers as our borders remain closed. The fact our vaccination programme is now last amongst OECD countries indicates those borders won’t be reopening in any meaningful way, anytime soon.

New requirements for compulsory registration of employers seeking access to the migrant labour pool will be in place towards the end of September with registration a requirement from November. These are tight time frames for a department already under considerable strain.

Finally, the downgrade to the New Zealand Upgrade infrastructure programme was bad news for the EMA’s region with significant projects in Northland, South Auckland and Tauranga canned as being too expensive and being contrary to the country’s emissions goals. Given that most of the vehicle fleet is supposed to be electric by the time these projects would have been completed, that’s an argument that largely fails to stack up.

Whangarei to Marsden Point is one of the most dangerous roads in the country as is the stretch north from Tauranga to Omokoroa. The Mill Rd four lane stretch south of Auckland was to service a region expecting the population of Napier in the next decade as well as major industrial development. It was also to be an alternate route south of Auckland where the project to add lanes to an already congested motorway south of Papakura was also canned.

Auckland’s urgent East/West corridor went the way of the dodo.

Three railway stations south of Drury won’t address the southern Auckland congestion and a rail spur to Marsden Point will barely register as blip on the freight task out of Whangarei.

Critical freight movement around the region will only be made harder by losing these projects.

We’ll cover these and other topics in more depth at our member briefings starting June 21. I look forward to seeing members there and hearing your feedback.

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