Business Update Friday 11 March 2005, issue 123

Business Update Friday 11 March 2005, issue 123

UNION CLAIM IGNORES NEED FOR PRODUCTIVITY

The engineers’ union 5% across-the-board wage claim is like a return to centralised bargaining. The claim ignores productivity realities and individual company circumstances. If the claim succeeds, NZ firms will just be less competitive in the world market.

5% CLAIM REVEALS UNION PACT

Support by the National Distribution Union and the Service & Food Workers Union for the 5% campaign has not just come out of the blue – those two unions joined a pact with the engineers’ union last year, pledging to support action by any of them within single industries. The pact – the Kingsgate Accord – is aimed at getting round ERA rules on industrial action. “The plan is to stack up a whole lot of expired contracts…then take combined action over pay,” writes the Socialist Worker Unity.

AUSSIE MOVES TO CLEAN UP INDUSTRIAL RELATIONS

The Australian govt this week introduced legislation to curb pattern bargaining (where unions use industrial action to get the same pay rates across several employers within a single industry - similar to the NZ engineers’ union plan for a 5% rise). The Bill is just one of several industrial relations laws the Australian govt intends to bring in once it gains control of the Senate in July. Other planned laws would slim down the awards system, exempt small businesses from unfair dismissal claims and take industrial relations authority away from states, creating a single national system – an idea that Opposition leader Kim Beazley says Labor would consider supporting.

OIL LOBBY URGED

Petrol prices going up 1 cent a litre - that’s the likely outcome from the Govt’s proposal to make oil companies meet International Energy Agency rules. The IAE says 90 days’ worth of oil reserves must be maintained to buffer against disruptions to global supplies - but NZ’s stocks are usually less than that. Until now, oil on tankers bound for NZ has been included in the counting, but the Govt intends to stop this practice. Getting up to 90 days would mean oil companies passing on to consumers the cost of building new storage tanks and stocking thousands of tonnes more oil. Business NZ’s Phil O’Reilly says the IAE should be lobbied to get more flexibility for NZ: “We’re separated from the rest of the world by large tracts of ocean, so it’s reasonable to include tanker stocks in our tally.”

CAUTION ON WORKPLACE SUPER

National finance spokesman John Keys has urged caution over moves towards compulsory workplace super schemes. Speaking to the Super Funds Summit yesterday, he said he was sceptical about the success of a compulsory opt-in scheme that anyone can opt out of with relative ease: “…evidence from Ireland and the UK indicates a low level of patronage for funds established in this manner, despite the benefit of considerable tax advantages.” He warned against destabilising existing workplace schemes: “It seems utterly mad to me that we could risk undermining the existing accounts in our rush to establish a broader participation in workplace schemes.” MALAYSIA DEAL ON THE CARDS

A free trade agreement with Malaysia is looking likely, with the release of NZ’s study into the benefits released today. NZ processed wood, cheese and carpets currently face moderate tariff barriers, and NZ food and beverages, wood products and machinery face high tariff barriers – these, along with barriers to trade in services, could be freed up with an FTA with Malaysia. Contact tplu@mfat.govt.nz
HOLIDAY ENTITLEMENTS CLARIFIED

The common 7-day-a-week industry practice of agreeing to add public holiday entitlements to annual leave rather than observing the listed public holidays on the days themselves has been found unlawful by a recent decision of the Employment Court (NZ Air Line Pilots' Association v Air New Zealand Ltd). The judgment, delivered by Judge Shaw, says that public holiday observance can only be transferred by agreement to a day chosen by the employee, not simply agreed to be taken sometime in the future. Business NZ was invited by the Court to make submissions in the case. Unless the decision is successfully appealed it will affect many other employers besides Air New Zealand. Contact tcleary@businessnz.org.nz or bburton@businessnz.org.nz.

LEGISLATION WATCH WHEN IS A PRIVATE COMPANY NOT PRIVATE?

Large privately-owned companies are up in arms about a review of the Financial Reporting Act. Govt is proposing that private companies over a certain size must have their financial reports audited and filed on a public register. Concerned firms say it would erode their competitive advantage by revealing commercially sensitive information to competitors. The information is already available to legitimate interested parties through contractual or statutory obligations - banks can get all the financial information they need and creditors can get credit references. Business NZ’s submission to the review says it should be up to company owners to decide how much reporting, auditing and public disclosure should be made – not Govt.

Contact ssummers@businessnz.org.nz

RMA AMENDMENT STILL STUFFED

The Resource Management and Electricity Legislation Amendment Bill brings a few potential improvements, but could make the RMA worse in other ways: Political decisions – The Local Government Minister would have more power to ‘call in’ projects (applying national priorities in certain areas, instead of leaving them to local authorities).

This would help investment certainty, but leaving it to a Minister to decide which projects should be ‘called in’ brings a risk of politicised decision making - an independent commissioner would be better. Priority for existing consent holders needed - The Bill doesn’t clearly offer priority for existing consent holders when new applications are being considered - it should: priority for existing consent holders would improve investment certainty. Tradable resource rights needed - The Bill says regional councils should be in charge of allocating natural resources, but this would be beyond the capacity of many local authorities. Needed: new rules using tradable rights.

Woolly definition - The RMA needs a new definition of ‘environment’. The current one includes the “social, economic, aesthetic and cultural conditions” impacting on “resources, amenity values and ecosystems” (an ecosystem can be anything from an atom to a planet). This woolly definition means there’s an infinite number “impacts” that can be used to stymie development if anyone has a mind to. Contact pwhitehouse@businessnz.org.nz

BUSINESS STATS

LARGE TRADE DEFICIT

- The provisional value of exports in January was $2,258m, up 10.9% on Jan 2004.

- The provisional value for imports was $3,070m, giving a trade deficit of $315m.

- The deficit is 13.9% of exports, compared with an average January trade deficit of 8.7% for the last decade.

- Strong demand continues for dairy and meat products

as world commodities prices continue upwards. The value of exported dairy products and meat for Jan 2005 are the highest for any January month recorded.

- Over the January year there was an increase in the value of exports to most of NZ’s trading partners, notably China (+23.1%), South Korea (+17.3) and Japan (+13.0%).

TOURISM NUMBERS CLIMBING…

- Short-term visitor arrivals during January were up 2% on Jan 2004.

- The number of visitor ‘stay days’ during January was 5.94m, and the average length of stay was 24 days – a similar result to Jan 2004.

- There was an increase in visitor arrivals in January, from Australia (+10% or 6,800), UK (+8% or 3,000) and Japan (+10% or 1,500). There was a drop in visitors from China, Hong Kong and Korea, possibly because Chinese New Year fell in February not January in 2005.

- Over the Jan 2005 year there were 2.353m visitors, up 10% on the previous year.

…BUT IMMIGRATION PLUMMETING - Arrivals fell and departures increased during January: permanent and long-term (PLT) arrivals exceeded departures by 1,700 – much lower than the net gains in Jan 2004 (4,000) and Jan 2003 (5,600). - The net migration gain for the Jan 2005 year of 12,800 was 62% lower than the 39,000 recorded for the Jan 2004 year - NZ citizen arrivals fell by 2,900, while departures rose by 5,100; non-NZ arrivals fell by 9,300 and departures rose by 3,200. Arrivals were down from China (-8,306), Australia (-5,326) and India (-2,274). - The continued fall in migration is a double blow for businesses seeking staff, as more NZers are leaving, and fewer non-NZers are arriving. - While migration is still showing a net gain, the balance is predicted to reach near zero by the end of 2005. More information on www.stats.govt.nz

ELECTRICITY GENERATION INCREASING - Electricity generation for the Dec 2004 quarter was 0.6% higher than in the Dec 2003 quarter. - Hydro and wind generation supplied 67% of the electricity provided in the Dec 2004 quarter, compared with an average of 72% over the last decade. - Over the 2004 year electricity generation was 5.5% higher than in 2003. Hydro and wind generation was 16% higher, while thermal generation decreased 11.8%.

WHAT’S NEW on www.businessnz.org.nz - Business planning forecast March 2005 quarter - RMA & Electricity Amendment Bill submission - ANZ-Business NZ PMI for Jan 2005 - Pragmatic approach to Aussies needed - The productivity challenge

ENDS

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