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A real recession policy

Written By: - Date published: 1:27 pm, August 6th, 2009 - 13 comments
Categories: unemployment, workers' rights - Tags:

Darien Fenton’s minimum redundancy bill has been drawn from the ballot and is likely to go before the house in the next two weeks.

In my opinion implementing a minimum redundancy is one of the most significant ways we can reduce the effects of the recession on working Kiwis because it offers a buffer for people when they lose their jobs so they can continue to pay their mortgages for a while, set themselves up in business or get some financial space to retrain.

I expect that National will talk a lot about how business can’t afford this and it will cost more jobs but it’s worth remembering that 85% of union collective agreements have a redundancy clause.

It’s also worth remembering that business got a 3% tax cut from Labour last year.

And that our long-standing politicians are also rewarded extremely well when they are made redundant by voters and that senior managers also tend do very well when they move on.

If it’s good enough for them why should ordinary workers be left high and dry when their job disappears? Especially when those jobs are disappearing at a frightening rate.

Somehow I doubt the political arm of business will agree.

13 comments on “A real recession policy”

  1. BLiP 1

    No way will business accept this or any improvement in worker conditions. As John Key said this government is about reducing conditions, not improving them.

    Under Labour, business got a real fright when the tables were turned and it was them suffering the shortage, far better, in their venal minds, if there’s a ready pool of humble souls from which to pick and choose.

    Thanks National Inc. I’m lovin’ it.

  2. sausage fingers 2

    “A real recession policy”. Quite true.

    Way to make sure that anyone who was remotely contemplating employing anyone will decide not to.

    Are you desperate to prolong the recession for your political ends?

  3. Rex Widerstrom 3

    Fenton could have blogged a summary of what’s in the Bill (information is what political blogs are meant to be for Darien, not self-congratulatory back-patting).

    Someone want to fill me in? How much money are we talking about? The Herald’s website seems to be all about Field, Keisha Castle-Hughes (could I care less? I think not), and of course Bill’s house.

    Clearly no room for a story on something that would have a major impact on the lives of ordinary working NZers.

    • IrishBill 3.1

      Rex, it’s a four plus two deal capped at 26 weeks with four weeks notice. That’s less than the union standard of six plus two but it would see someone with five years service get twelve weeks of income to get by on. Better than restart for sure.

      I’m getting a bit bored with Bill’s house too. But that’s the media we’ve got.

      • Rex Widerstrom 3.1.1

        Thanks IB. Paid for straight out of business profits? Some form of insurance scheme? Part government assistance? I suppose I should ask over sat Red Alert really, but you guys do analysis, they do propaganda).

  4. vto 4

    12 weeks isnt much but better than nothing. Problem isn’t business absorbing costs such as this, problem is the time it takes to get the cost passed on. As rude as it sounds.

  5. IrishBill 5

    Rex, straight out of business profits. No reason it can’t be put aside in an investment fund over time though.

    vto, three months is a decent period of not having to be on the dole and being able to meet your costs as you normally would while looking for a new job. There’s no reason that the government couldn’t defray the cost to business for redundancies where the worker had more than, say, five years accrued via a tax credit and then phase that out as the cost of the policy fed into the economy over time. It would be a typical tripartite arrangement much like kiwisaver, I’ve not looked into it far enough to approximate the costs but I can’t see how they could be that great once the savings from not paying restart and benefits payments were accounted for.

    • Rex Widerstrom 5.1

      Thanks again IB. I can see how that might cripple small businesses already on the brink if someone doesn’t offer an insurance scheme whereby the premiums are less than one would actually have to set aside to cover the full cost of potential redundancies.

      OTOH it’s an excellent and much-needed idea in principle. No one should be chucked out of a job with nothing more than a “thanks for playing, here’s two weeks wages”, which has happened to me on several occasions.

      I hope it gets through to Select Committee stage so the options can be canvassed, rather than dumped at the first reading on ideological grounds.

    • vto 5.2

      Good to see that the effect on business is being taken into account, as it can’t be ignored. Many costs and impositions get dumped on businesses. It is an easy dumping ground for politicians – example, recently local councils increased levies on developers. They (being the local body politicians) presented the increased costs as being something which the developers would pay, implying that there will be no effect on the public because the developers would be made to pay it out of their profit. Of course the public love hearing that – ‘make them fat cats pay ha ha ha’. That was deceptive in the extreme and if the councils were subject to the Fair TRading Act they would have been instantly in breach.

      No doubt this sort of behaviour will continue, despite its harm and dishonesty.

      • IrishBill 5.2.1

        vto, that’s not in the bill but it’s an option that could be put in the mix if it gets to select committee. Sadly I doubt it will get past the first reading.

      • Armchair Critic 5.2.2

        vto – of course developers don’t pay the levies out of profits, they pass them on to the purchasers of their developments. From that perspective the whole ‘make them fat cats pay’ line is rubbish.
        I know it is a bit of a stretch from a minimum redundancy bill to developers levies, but I have to ask, do you think ratepayers should subsidise all, some or none of the extra costs that are generated by development?

  6. vto 6

    Tell you a funny thing mr critic.

    The line spun by the local body politicians here in this corner of NZ was that development is great and the whole community benefits through having a more vibrant city, increased population, greater job opportunities and investment, etc. The mayor and others went on and on about this, as they do in most centres. You know – get more people coming to the area. Grow, populate, advance, more cosmopolitan, etc etc. So the entire theme, promoted by the pollies themselves, was that development and increased population is something which benefits the entire existing community. Which it does.

    So then some costs come along. Uh oh, dont want to upset the constituency. Politicians then start parroting that those who benefit should pay the costs they impose. Now of course they CHANGE their definition of who it is that benefits – all of a sudden it is only developers who benefit. Not the wider community, the existing community, the future community, not anymore – all their previous statements turn out to be hollow deceptions (lies). So they present a falsehood, claim it is only the developers who benefit, and lump 100% of those costs onto them.

    Bloody deceitful Councillors.

    Getting to your exact question – those who benefit should pay. It is partly the entire existing community as outlined above and partly the developer and partly the new resident and partly the residents that will follow. So the costs should be spread across those groups – which includes existing and future ratepayers and the developers.

    • Armchair Critic 6.1

      Thanks vto. I’ve always favoured splitting the costs between the purchasers of the development and the existing ratepayers. No one seems to have worked out how to split the costs (I think it varies from place to place) and do it in a transparent manner and politically acceptable way.

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