Need to rethink industrial relations

Business indicators reinforce need to rethink industrial relations

EMA believes the series of recent business-related commentary on low productivity, business confidence dropping and inflation rising, adds to its call for a rethink on the Employment Relations Amendment Bill and other industrial relations legislation.

"We all want a high wage, nimble and high performing economy. Our economic fundamentals are favourable. Yet, this may be eroded by what we are seeing in recent reports which point to poor productivity, business confidence slumping and forced wage increases potentially driving inflation up," says Kim Campbell, CEO, EMA.

"In a nutshell, our wages are lower than other OECD countries because our productivity is lower. We are working more, but GDP is down. To lift wages, productivity must first improve to enable a sustainable lift in incomes.

"The heightened industrial action primarily calling for higher wages only shines the light on this further. How will New Zealand enterprises lift productivity to cover an increased wage bill?

Which is why the EMA, and its members, have been actively asking the Government to rethink its approach to industrial relations.

"We are puzzled by how the proposed employment relations changes will deliver to the Government’s stated economic aims. We’re not against making changes, but the Government’s Future of Work Forum has yet to convene and this seems the obvious place to debate what legislative reform is required to achieve the desired strategic outcome.

"What work we do, and how we work, will be different in the next decade or so. New Zealand needs to future proof itself and produce integrated law that will assist productivity

"In the meantime, it’s no surprise business confidence is dropping and they are putting a temporary hold on hiring and investment plans," says Mr Campbell.

ENDS

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