Business NZ - Business Update

Business NZ - Business Update

ERA Review tomorrow....Holidays Bill complicates salaries....Just deal to the compliance costs please.....Business Update

ERA REVIEW TOMORROW The ritual pre-Christmas period where unpopular legislation gets rushed through Parliament is now here. Heading the unpopularity stakes will be the Bill introducing changes to the Employment Relations Act, due in Parliament tomorrow. It's tipped to contain the worst elements stripped from the original Employment Relations Bill in 2000 - restrictions on contracting out, further concessions to unions and changes to personal grievances. A Business Update Special summarising the Bill's provisions will be emailed as soon as possible following its tabling.

HOLIDAYS BILL COMPLICATES SALARIES The Holidays Bill, now back in Parliament, requires rate and a half to be paid for all time worked on a public holiday, even for people on salaries. But salaries have traditionally covered all time worked whether public holiday or not. Employers will be required to amend salary and composite rate agreements to show they contain a genuinely negotiated amount covering work on public holidays. All new agreements must have this kind of provision. The Holidays Bill is expected to be passed this month and to be in force by 1 April 2004. Regional business associations will offer training on the new Act's requirements early in the New Year. Employer guides on the Act will also be available through regional associations. Contact bburton@businessnz.org.nz .

ROAD FUNDING PLAN COMING Transport changes are likely before Christmas. On 12 December Transport Minister Paul Swain is to announce a package to address the underfunding of transport infrastructure, particularly in Auckland - look out for increased petrol taxes, a contribution from Government coffers, tolls, and higher local authority rates to fund roading and passenger transport. Roading has been under-funded for many years - additional revenue raised from road users is likely to be spent on roads. And drunk drivers and speeders will be targeted in another major announcement before Christmas - look out for demerit points for speed cameras, a lower blood-alcohol limit, and a lower tolerance level for speed above the legal limit. Contact nclark@businessnz.org.nz .

JUST DEAL TO COMPLIANCE COSTS PLEASE Hard times in the timber industry came to a head in a stoush between Jim Anderton and industry spokesman Wayne Coffey last week. Anderton puts industry difficulties down to the high $NZ, the fall in US markets and a commodity based mentality. Coffey says many sawmillers do add value, converting logs to high quality furniture grades, but the disincentives (compliance costs, levies and taxes) are making it hard to add value in NZ. Mr Anderton wants a meeting with the industry to explain all the things he has done in the last three years. Mr Coffey agrees Mr Anderton is very active, but is "doing all the wrong things...employing thousands of bureaucrats and wasting taxpayers' money" instead of simply dealing to compliance costs.

SMOKEFREE BILL SENDS SMOKERS OUTSIDE The Smoke-free Environments (Enhanced Protection) Amendment Bill - due to be passed in Parliament today - has become more draconian as time has gone by. It initially allowed for indoor smoking areas if separately and mechanically ventilated - to that extent choice was permissible and the proposed legislation had Business NZ's support. Unfortunately that choice has now been removed unless the employer is a hospital or similar - even prisons are allowed a smoking policy - but this will be denied to ordinary workplaces. Smoking in internal workplace areas, however well ventilated, will be forbidden and people who want to smoke will have to go outside. Proprietors of hospitality and entertainment businesses will be required to take "all reasonably practicable steps" to clamp down on customers who want to smoke - penalties apply in every case. The Bill is set to become law by the end of the year.

BORDER SECURITY FEE A TAX ON TRADE The Government's proposed border security fee will take $20m a year off business. It's really another tax on business, not a fee - a flat amount per shipment regardless of the risk of the cargo or its destination. The tax will be a disincentive for exporters. Border security is a public good that should be funded by all taxpayers. It's understood other security charges are also in the pipeline. Business NZ has joined a Travel & Trade Industry Coalition to fight the fee. Contact nclark@businessnz.org.nz .

GROWTH STATS

VISITORS INCREASING

* October data shows of short-term visitor arrivals were up 2% on Oct 2002, reaching 165,800.

* Number of days stayed were 5% up on Oct 2002, while average length of stay grew from 21 to 22 days.

* There were more visitor arrivals from Australia (+6,300), Malaysia (+900) and the U.K (+700), but fewer from Japan (-3,100) and Korea (-800) compared with Oct 2002.

BUT MIGRATION SLOWING

* Net migration figures for October show a fall from the strong net gains of the last two years. Permanent and long-term (PLT) arrivals exceeded departures by 3,000 during Oct, 1,100 fewer than in Oct 2002. PLT arrivals have now dropped for the last 8 months compared with the same months in 2002.

* Annual figures also show further easing - there was a net PLT gain of 39,300 in the Oct 2003 year compared with 40,400 for the Sept 2003 year.

BUILDING CONSENTS INCREASE

* Building consents for October stood at 2,508, in a trend that has been moving upwards since April.

* Excluding apartments the total was 2,399 - the most for any month since Jan 1990 when apartments were able to be excluded from the total.

* The (highly volatile) series for new apartment consents dropped to 109 in Oct and was 13% for the Oct 2003 year than the Oct 2002 year.

* The total value of non-residential building consents was $255m in Oct (compared with $256m for Sept 2003 and $212m for Oct 2002). Main categories were education buildings ($48m), shops/restaurants/taverns ($47m) and factories & industrial buildings ($36.3m).

TRADE DEFICIT SHRINKS SLIGHTLY

* The provisional value of imports in Oct was $3,021m and the estimated value for exports in Oct was $2,320m - giving an estimated trade balance of a $701m deficit, lower than the previous month and slightly higher than in Oct 2002.

* As a percentage of exports it would be the highest Oct deficit since 1989.

* The value of imports was $147m lower than in Oct 2002, due to petroleum & products (-$70m), aircraft (-$44m) and vehicles, parts & accessories (-$44m). The fall was partly offset by increased values for pharmaceuticals (+$14m) and optical, medical & measuring equipment (+$14m).

* Over the Oct 2003 year the value of imports was 1.6% ($524m) less than for the Oct 2002 year.

ELECTRICITY AFFECTS PRICES

* The Producers Price Index (PPI) output index rose 0.4% during the Sept 2003 quarter, while falling 0.7% from the September 2002 to 2003 quarter.

* For the third quarter in a row, the main reason for the Sept quarterly increase in outputs was wholesale electricity (+6.7%).

* Other increases during the Sept quarter were in real estate (+1.6%) and construction (+0.7%). The construction index has now risen for the last 18 quarters.

* The PPI inputs index also rose 0.4% during the Sept 2003 quarter, while staying virtually unchanged from the Sept 2002 to 2003 quarter.

* The most significant quarterly rise was again electricity (+8.5%), while lower log prices affected the paper & paper product manufacturing index (-2.8%) and lower freight and material costs affected the printing, publishing & recorded media index (-1.8%).

* The PPI inputs index rose 0.1% over the Sept 2003 year, following four consecutive falls over an annual basis.

SEASONS GREETINGS Instead of sending Christmas cards to friends and supporters, Business NZ is this year making a donation to the Enterprise NZ Trust to assist its work in promoting competition, economic literacy and positive attitudes to business in schools. Best wishes for 2004 to all our members and readers!

WHAT'S NEW on http://www.businessnz.org.nz

* Manufacturing activity continues to climb

* ANZ-Business NZ PMI for October 2003

* Holidays Bill increases costs, workload for employers

* Unbundling is high risk

* Submission on RMA Amendment Bill

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