BusinessSense: Will These Australian Trends Hit NZ

Dear Colleague

While NZ and Australia have a serious rivalry in many areas, our bigger neighbours often provide a lead for us on areas of business and social significance.

Both countries are in the middle of recessions, even though the Aussies are still in a state of self denial about theirs. But there are several issues of significance emerging across the ditch as businesses fight to stave off tough times.

One is in the employment area where businesses are looking not to cheap, inexperienced youngsters to keep them in the black, but to older experienced workers who are obviously bringing much more to the table in terms of their work ethic and productive output.

Another interesting trend is the value of education. NZ's tertiary sector is not functioning in the way business needs it too, with too much being wasted on pointless courses and pumping up of numbers.

New Australian research backs the value of tertiary education, saying money spent on education is more effective than subsidies to industry or tax cuts as an economic booster. But the spending has to be well targeted.

It's something our government should keep in mind as it takes the razor to spending in next month's budget.

The Australian Edition of the Political Newsletter Trans Tasman http://www.transtasman.co.nz sketches the details of these two trends.

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"Over 50s Move Back Into Workforce Older Australian workers are pouring into the workforce, even as jobs grow more scarce and unemployment rises sharply among the young. Official figures show while people aged under 25 lost 91,500 full-time jobs in the year to February, people over 50 added 104,000 full-time jobs.

More unexpectedly, while the number of under-25s who were unemployed or out of the workforce shot up by 129,000 over the year, the number of over-50s unemployed, retired or taking time out shrank by 3000. By February 2009, 30% of men aged 65 to 69 were working, and 58% of those aged 60 to 64.

Employment rates were much lower for women, but even so, 14% of women aged 65 to 69 were in work, and 38% of those in their early 60s.

While unemployment rose by 187,000 over the year, just over half was concentrated among the young. Unemployment rose to 17.7% among those aged 15 to 19, 8.8% among those 20 to 24, and 6.6% among those 25 to 29 — but was 3 to 4% among age groups between 45 and 64."

Article No.2 "Education Spending Most Effective For Economy A new study claims putting money into higher education will yield greater immediate and long-term benefits for the Aust economy than spending on the car industry and general tax cuts.

A report by KPMG, commissioned by Aust's 38 universities says real GDP could increase by an extra $1.6bn annually on average over the next decade, then accelerate to an average $38bn annually in the 2020s and $96bn more in the 2030s as the full benefits flow through.

The benefits are dependent on the May Budget implementing recommendations made by Professor Denise Bradley in her higher education review.

She called for a Govt outlay of $6.5bn on higher education over four years, and subsequently spending the OECD average of 1% of GDP. KPMG's modelling shows the net upfront expenditure is modest and the downstream pay-off is unusually large."

There are some scary numbers being bandied about by the Govt at the moment - $50bn dollars being taken out of the economy in the next three years, debt ballooning and predictions of higher unemployment.

Hopefully our politicians and business people are making themselves aware of trends like the two I've talked about today, and the value older workers and a better educated population have for the economy in general.

Over to you Mr Key and Mr English.

Sincerely,

Max Bowden Publisher In Chief The Main Report Group

ENDS

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