Holidays Plan Makes Farce Of Growth Aims

Holidays Plan Makes Farce Of Growth Aims

"The government's latest plan to legislate for 4 weeks annual holidays makes a farce of its professed 'top priority' goal of better economic growth", Roger Kerr, executive director the New Zealand Business Roundtable, said today.

"How can working less promote either higher incomes for workers or higher levels of output and growth?

"Parliament cannot legislate better conditions for workers out of thin air. If it could, why stop at 4 weeks leave? Why not legislate for 5 or 6 weeks, and throw in a 10 percent pay rise and a company car as well?

"Only increased productivity can support higher wages and longer holidays. The plan does nothing to increase productivity, and other anti-growth and anti-business policies are reducing potential productivity growth.

"Even Ross Wilson of the Council of Trade Unions recognises that workers largely bear the costs of extra mandatory holidays themselves when he says "workers had already helped to bankroll the exercise through years of accepting modest pay increases". In fact they have done no such thing, but they will face such offsets if longer holidays are imposed.

"Workers and employers are perfectly able to work out the combinations of pay, leave and other working conditions that suit their needs. Their needs and preferences are not all the same. Mandating an extra week's leave will be akin to imposing something like a 2 percent pay sacrifice on the average worker. Those hardest hit will be low income workers, who typically prefer more work opportunities and higher pay."

Mr Kerr said that the government's point that Australia has legislation providing for a minimum of four weeks annual leave was irrelevant.

"Australia also has average incomes, wages and productivity levels 20-30 percent higher than New Zealand's. US productivity and income levels are higher again, yet the United States has no mandatory annual leave and American workers typically take 3 weeks leave or less. There is widespread recognition in France that legislating for a 35-hour working week was foolish, and incomes are stagnant in Germany and other European countries with long holiday provisions. Does New Zealand want to go in the direction of a bunch of economic losers?

"This issue is not about a better deal for workers, which only productive workplaces and a growing economy can deliver", Mr Kerr concluded. "It is about union officials and politicians trying to attract support by pretending to help workers but in reality dictating how they and businesses should organise their affairs, and making many worse off in the process.

"Economically literate commentators should be exposing this charade, which is totally at odds with the government's professed interest in getting New Zealand back up the OECD income ladder."

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