15 March 2005

Hon Steve Maharey - Work opportunities for all New Zealanders

Speech for Employers Summit, Wellington

Introduction Good morning. A very warm welcome to all the employer, industry and business representatives here today. Thank you for taking the time to attend this Summit, and to learn about what the government is doing to boost the supply of skilled workers for your businesses.

A consistent thread running through this government’s time in office is our desire to see more New Zealanders prospering through participation in paid work.

Traditionally, government welfare policies have focused on providing targeted assistance to people on Unemployment Benefits. But with two million, 56 thousand New Zealanders now in work, we are shifting the focus onto making work pay, improving participation in sustainable employment, and boosting productivity.

Economic growth has achieved above the OECD average for the past five years. At 3.6 per cent, our unemployment rate is the lowest in the OECD, and labour force participation has jumped to almost 70 per cent -- with the rate for women at an all-time high of over 60 per cent.

We haven’t achieved these results by standing back and leaving everything to the market. We’ve developed targeted strategies for Job Seekers – strategies that focus on personal circumstances and aspirations, address barriers to employment, and aim for sustainable employment rather than short-term, quick fix solutions.

We’ve also achieved these results by working closely with you, the employers, to learn what skills you need for your businesses, and how we can target our efforts to ensure you get the workers you need.

Now, in a time of strong economic health, the pressure is on us to expand our thinking; to become yet more innovative and improve productivity, so we can continue building this country’s prosperity.

The new challenge of labour shortages

A significant impact of our economic and employment growth is that New Zealand is experiencing – and I know this won’t be news to you – a 30-year high in labour shortages.

Where once the challenge was to find enough jobs for the available workers, today’s challenge is to find suitable workers for the available jobs.

The labour shortage includes both high-skilled and lower-skilled workers. It spans a wide range of occupations and industries. We’re lacking professionals such as engineers and surgeons, as well as trades people such as plumbers and electricians. And we’re short of horticultural workers, particularly at harvest time.

Employers are telling us the number one constraint they face in growing their business is the lack of skilled workers. A recent business opinion survey found that just under half of businesses are having difficulty finding skilled workers, while around a third report difficulties in finding unskilled workers.

It’s true that the strong economy is not the sole cause of the current labour shortage. Our ageing population is also having an impact. Older people are becoming a larger proportion of the total population; our average age has risen, and children are a decreasing proportion.

For some, immigration seems the obvious solution. And certainly we are actively marketing New Zealand as a destination to skilled people abroad. The reality, though, is that we’re competing in an international market for skills, one where

country is pitted against country in their efforts to attract younger and, especially, skilled workers. This means that relying on migration alone is not a sufficient response to the labour shortage.

A multi-pronged solution

So what do we do?

Because the problem is not simple, the solution can’t be. We need to tackle the labour shortage on several fronts.

We need to continue building the skills and talents of our workforce. We need to enable more people to participate in the workforce, like youth, women, sole parents, people with disabilities, and older people. We need to ensure that work pays, especially for people moving off benefit. We need to enable good work/life balance, encouraging more flexible workplaces and providing access to quality, affordable childcare.

We’re making excellent progress. Working for Families provides increased financial assistance for thousands of low-and-modest income working families, ensuring that work pays and providing greater assistance with costs like childcare. Youth transitions initiatives are providing targeted, integrated assistance for young people at risk of missing out on work, education, or training.

Enhanced case management for Domestic Purposes Benefit clients is enabling sole parents to plan for their return to work as their family responsibilities allow. Government and industry investments in skills, innovation, science, research, and technology are boosting our productivity.

And we are making a fundamental change in the way we work with a client group with a wealth of untapped potential – Sickness or Invalids Benefit clients.

New Service for Sickness and Invalids Benefit clients

The new Service for Sickness and Invalids Benefit clients has the potential to provide real and lasting solutions to New Zealand’s labour shortage. Recognising that many Sickness and Invalids Benefit clients do want to work, and can work with the right support, the new Service delivers a package of services that puts the client at the centre and focuses on their potential, rather than just their barriers to work.

A diverse range of services are available, from employment, training, and support services to the groundbreaking PATHS – Providing Access to Health Solutions -- initiative being trialled in Manukau and Wellington. The Service as a whole is a quantum move away from the old, passive approach of simply processing benefits and entitlements.

You’ll hear more about the nuts and bolts of the new Service later today. For now, I’d like to share a few of the inspiring success stories that are already coming out of the Service.

There’s the case of a single mother with two children who was on the Invalid’s Benefit for six years after severely injuring her back. Her Work and Income work broker identified that she had developed woodworking skills by making quality furniture from firewood at home. Today, this former client is a valuable full-time employee of a wooden furniture manufacturer in Lower Hutt.

Another client was jobless for over 13 years because of chronic arthritis pain. Through the new Service, she received assistance for a specialist consultation that taught her self-management skills for her condition. This former client is now in continuing employment, and is receiving ongoing physical therapy to help her stay there.

Then there’s the case of a 30-year-old intellectually disabled man who’d been on an Invalid’s Benefit all his adult life. With support from the new Service, he’s been in a 20-hours-a-week job for five months. And he’s just been given extra duties.

Not very long ago, none of these workers would have got these opportunities. We are very aware that their success stories, and the future successes we expect from the Service, are heavily dependent on you, the employers. Only by working in partnership with you can we make significant progress.

Today’s Summit is about engaging with you so we can learn how we can add the best value possible. We need your ideas and your energy; and we need to hear your questions or concerns, so we can address them.

What support do you need from government, both to hire a person with a history of ill health or impairment and to ensure they can stay in the job? How can we make employment programmes more flexible and responsive to your needs? How can we provide information in the most useful, accessible way?

Today is just the start of the process. As the new Service develops, we’ll continue to engage with employers, ensuring that we have your input and that you get what you need from us.

All the work I’ve described this morning is part of the government’s shift towards a much more modern, simple, and proactive social assistance system that puts work first for all New Zealanders. We need to bring our social assistance system fully into the 21st century, and we have a programme of work underway to do so.

Single Core Benefit

New Zealand’s social assistance system was first designed in the 1930s. Adjustments, refinements, and additions made over the following years have left us with a complex system, with too many layers and administrative requirements.

In 2007, the government will introduce New Zealand’s biggest and most positive social assistance reform since our system was designed almost 70 years ago. The new Single Core Benefit will roll seven existing benefits into one, with add-on support for things like housing or childcare costs.

The Single Core Benefit will do away with the complex raft of entitlements, categories, and administrative requirements created by the current system. It will free up case managers’ time to provide targeted employment assistance that puts the spotlight on people’s abilities, and supports them into work as their circumstances allow it.

New Zealand’s social welfare system will always provide for people in need. No one will get less as a result of the Single Core Benefit. But the spotlight will shift from people’s barriers to work to their potential to work.

In preparation for Single Core Benefit, Work and Income will soon start trialling a new service delivery model that will assist people into the right job at the right time, right from the start. We’re also developing employment programmes that are more responsive to employers’ needs and regional circumstances. Conclusion

Each speaker at today’s Summit will reiterate the same message. Employing a person with a history of ill health or an impairment is not an act of charity. It is a viable and beneficial employment option.

We’re here at this Summit to ensure that we seize every opportunity of accessing the skills and talents of New Zealanders, irrespective of their labels. We are here to ensure we realise the potential of previously excluded groups of potential workers, for the good of our economy and the good of our country.

The vision we’re striving to realise is of a prosperous, inclusive and environmentally sustainable New Zealand. A society characterised by opportunity for all. A society where no matter your gender, your ethnicity, or your particular capabilities, you have the chance to make your own way, to participate, and to succeed.

Today, you’ll hear more about the Sickness and Invalids Benefit client group, their diversity and their potential. Workers and employers will share their experiences and insights about extending employment opportunities outside the mainstream. You’ll hear more about the new Service for Sickness and Invalids Benefit clients, and the support that’s available to you, the employers, to take them on.

Thank you for coming today. Be welcome here, be inspired. I look forward to supporting our collective efforts to expand New Zealand’s — and your — workforce.

ENDS

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