Movement on Holidays Act problems

Thu, 17 Jun 2004

MOVEMENT ON HOLIDAYS PROBLEMS

Employment Minister Paul Swain has heeded complaints about the Holidays Act in arranging for Business NZ, the CTU and employee representatives to look for solutions. Business wants the problem of 'relevant daily pay' fixed. This is the new base rate for calculating holiday entitlements: instead of being the employee's base rate of pay, it's the base rate PLUS incentive and overtime pay and allowances - so it's compounding holiday costs for some companies. It's also the problem behind the increase in sickies on public holidays, as it results in staff getting paid penal rates for sick leave. Business NZ has a file of several companies that have had problems with the Act (names will not be used), but needs more to drive home to the Government the severity of the problem. Please contact Barbara Burton if your company has been affected - names will be protected and information will not be made public - on bburton@businessnz.org.nz .

HASTY RMA REVIEW

The rushed review of the RMA finishes with public comment on 30 June, straight after consultation meetings with business in Wellington on 28 June and Auckland on 30 June. The short-time frame makes the consultation a bit of a sham, but businesses should still take up the opportunity - both large and small projects are increasingly under threat from the way the Act is being implemented. Companies attending the consultation meetings should call on Government to introduce a careful and considered review of how central government, local government and the courts can administer and implement the management of natural and physical resources while ensuring economic opportunity and job creation are not harmed. For details of the two consultation meetings contact Peter Whitehouse ph 04 496 6562 or pwhitehouse@businessnz.org.nz .

COMMON SENSE ON SOCIAL POLICY

Business NZ President Terry Arnold called for common sense on social policy at an ILO forum in Geneva this week. He said business bears the cost of social policy, and said such policy should not be imposed by international bodies: "What a country does should be driven at the national level and should not be a matter for international institutions to direct or try and control....the challenges we face in NZ relate to the balance between labour and social policy and other policy demands necessary to sustain economic growth....in creating that balance the needs of the business community should not be forgotten nor just seen as broad shoulders to bear the cost of political promises." See:.

BALANCED ENERGY APPROACH

The Australian Government put out a policy statement on energy this week - a major plank for the next election, especially for business - based on the continued exploitation of Australia's coal, oil and gas while promoting technology to make emissions cleaner, and funding solar and wind energy development. Critics say the policy favours fossil fuels but today PM John Howard said it would be silly to throw away Australia's advantage in low-cost energy - the idea is to deliver a mix of traditional and renewable energy sources while reducing emission levels. Howard's balanced approach will be envied by NZ businesses who feel NZ's coal resources should also be exploited as much as possible instead of being penalised by the Kyoto Protocol. Contact pwhitehouse@businessnz.org.nz.

IRISH SUPER MODEL HERE? The Government is seeking advice from a Savings Product Working Group on how to encourage work-based retirement savings schemes. The group has been asked to consider whether all employers should be required to offer all employees access to work-based schemes (not necessarily to subsidise them) and whether employees should be automatically enrolled by their employer unless the employee declines to participate - similar to the Irish model. While Business NZ supports increased private provision of retirement savings and removing impediments to its uptake, we are concerned that any move towards compulsion would result in higher compliance costs for employers. Contact nclark@businessnz.org.nz

CER CHANGES RECOMMENDED Australia's Productivity Commission is recommending changes to the CER rules of origin. The Commission says they have become less valuable as associated compliance costs have increased and as tariffs have come down; also the rules have not kept pace with changes in business practice - outsourcing of some components can result in firms failing to meet the requirements. The Commission is recommending duty free entry for CER goods manufactured in Australia or NZ that face trans-Tasman tariff differences of 5 percentage points or less. Such a waiver would be more advantageous to NZ than Australia - it would have benefited 50% of NZ's exports to Australia in 2000-2001 compared with 20% of Australia's exports to NZ. The full report recommendations are available on: .

GROWTH STATS

MANUFACTURING SALES UP * Statistics NZ's Economic Survey of Manufacturing shows seasonally adjusted manufacturing sales in the March 2004 quarter were up 3.2% on the previous quarter, led by meat & dairy product manufacturing (+$155m or 7.9%), wood products (+ $85m or 7.9%). Only two sectors recorded falls: transport equipment (- $77m or 12.1%) and petroleum & industrial chemical manufacturing (- $23m or 3%). * With the effect of price changes removed, seasonally adjusted manufacturing sales rose 2.5% in the March 2004 quarter compared with the previous quarter.

RETAIL SALES MIXED * Seasonally adjusted retail sales fell 0.3% in April and 0.8% if motor vehicle related industries are excluded. Total sales were 9.3% up on April 2003 and up 8.0% if motor vehicle related sales are excluded. * There was strong growth in the automotive fuel sector in April due to recent petrol price increases - sales rose 6.3% (seasonally adjusted) from March and were up 19.4% on April 2003. * Takeaway food sales (seasonally adjusted) rose 5.8% in April and were up 18.8% on April 2003. Sales in this sector have accelerated since Dec 2003. * Retail sales growth was still strong in April in the South Island, except for Canterbury, which had growth of just 2.8%. Other areas of the South Island recorded 15.4% growth in retail sales compared with April 2003. * In the North Island the strongest growth in April was still in Auckland, 12.8% up on April 2003 while Wellington still had the weakest growth (1.2%).

IMPROVING TERMS OF TRADE The merchandise terms of trade rose by 2.1% in the March quarter as import prices fell faster than export prices. Export prices fell 1.6% in the March quarter and were 4.9% lower than in March 2003. Import prices fell * 3.6% in the March 2004 quarter and were 10.4% lower than in March 2003. * The capital goods (excluding transport equipment) import price index fell 7% in the March quarter, and was down 18.9% from March 2003. There were price falls for cellphones, computers, tractors and medical instruments. * An improvement in the terms of trade helps improve our standard of living, as fewer exports are required to purchase the same quantity of imported goods. Since 1999 our terms of trade for merchandise goods have risen 11%. Compared with March 1999 export prices are now 2.6% higher while import prices are 7.6% lower. * The terms of trade for services rose by 4.6% in the March quarter and were 9.9% higher than in March 2003. Over the last five years the services terms of trade have risen by 16.5%.

IMPORT & EXPORT VOLUMES RISING * Seasonally adjusted merchandise export volumes rose 6.9% in the March 2004 quarter and were 8.3% higher than in March 2003. Strong growth was recorded in most primary produce categories, with export volumes for pastoral and dairy products increasing 12.5% from March 2003. Non-food manufactured export volumes increased by 5.8% over that period. * Seasonally adjusted import volumes grew 8.3% in the March 2004 quarter and were 21% higher than in March 2003. Strong growth was again recorded for imports of capital goods (excluding transport equipment), with a seasonally adjusted rise of 9% in March 2004 and an increase of 37% since March 2003. Import volumes in this category have risen 86% since March 2000. * Seasonally adjusted imports of consumption goods rose by 1.5% in the March quarter and were 10.7% higher than in March 2003, while imports of passenger motorcars have been falling following strong growth in 2003.

WHAT'S NEW on www.businesnz.org.nz

* Business NZ President's Address to ILO, Geneva
* ANZ-Business NZ PMI for May 2004
* Manufacturing expansion weakens slightly in May
* Holidays Act requires remedial work
* ROI for training
* Skills Update In Business June 2004

ENDS

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