Business Confidence And The Employment Relations Bill

Ladies and Gentlemen, it is my great pleasure to welcome you here as President of the NZ Employers' Federation. The Federation represents over 12,500 individual companies, which are direct members of its four regional employers' organisations and a further 63,500 businesses affiliated through the Business and Industry Advisory Council.

Represented here today is a significant constituency - the employer community, which ultimately, is the only creator of jobs. It is worth repeating that governments do not create jobs and that unions do not create jobs. The only people who create jobs are employers.

I know a lot of people are here today because they are apprehensive about the changes that are looming under the Government's proposed Employment Relations Act. They are trying to get an understanding of the significant changes that will be imposed on their business by this new legislation.

The changes that are outlined in the Bill will certainly be far-reaching. Increased directors' liability, changes to the status of independent contractors, significantly greater compliance costs, and most alarmingly, increased powers to strike - these are staring us in the face.

But there will also be significant changes that are not outlined in the Bill, and which have not been foreshadowed in any of the debate so far. These may be even worse than the ones we know about. They are the changes that will follow the law of unintended consequences.

It is not the Government's intention to increase costs for business - but that will happen.

It is not the Government's intention to increase strikes and other industrial action - but that will also happen.

It is not the Government's intention to drive some companies to the wall - but that will be a consequence of this Bill.

It is not the Government's intention to drive investors, employers and highly skilled workers overseas - but that also will be a consequence of this Bill.

Surveys by our member organisations show the business community is losing confidence in the Government.

The Canterbury Employers' Chamber of Commerce survey, released just yesterday, shows 41% percent of respondents expect business conditions to decline over the next six months. This is compared to 18% in the previous survey and 7% in May 1999.

And EMA Northern's survey shows that there has been alarmingly little new investment in production capacity in recent months, despite the fact that available plant and equipment has been running at near full capacity throughout the last six-month period. If investment does not occur, then output cannot expand. And if output can't expand, then our trade deficit will continue to get wider and wider.

Both surveys point to a loss of confidence in the environment for business.

Perhaps the thing that has shaken confidence most has been the refusal by Government to listen. The experience of making submissions in good faith to the select committee considering the ACC legislation and having our viewpoint totally ignored, did not help business confidence.

We still hope that employers' submissions to the select committee considering the Employment Relations Bill will be taken heed of, although the reaction from the Government members was far from reassuring.

The first thing we were told when we fronted up to the select committee was that the Government won the election, and it has a mandate for these changes to employment law.

I say to you today - no government has the mandate to destroy business confidence.

Ends

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