Brief thoughts on the 9 day fortnight

Written By: - Date published: 6:04 pm, March 11th, 2009 - 53 comments
Categories: economy, wages - Tags:

The 9 day fortnight scheme has finally been announced but I’ve got a few questions:

Why do the taxpayer and the worker have to pay but the employer not?

What about free training? Surely that would fit with the productivity argument National’s been making?

Does anyone realise that those on the average wage would take a greater than 6% pay cut under this scheme?

There’s $20m put aside. That’s less than half the cycleway. Or 30 job summits. What kind of commitment to keeping people in work is that?

If this government is all about how important small business is then why is it only companies with more than 100 workers that are eligible for the scheme?

You get 10 workers on the scheme for every one you can prove you needed to make redundant. Who checks the books? Will there be an expanded bureaucracy to do it?

Will workers on sites with no union be forced by their employers to take this pay cut?

If not, where is the provision to stop that happening?

Why doesn’t the scheme extend to the public service? For example, the Environment Ministry?

Why is the CTU backing this?

Update: I just heard John Key on the radio saying he “hoped” employers would top the rate up. John you don’t have to “hope” if you design the scheme so employers have to pay some kind of top up.

John’s problem is he doesn’t want to do anything centrist like make employers share the pain with their workers but he doesn’t want to be seen as the right-wing guy that made sure it’s taxpayers and workers that foot the bill.

I say actions speak louder than spin.

53 comments on “Brief thoughts on the 9 day fortnight ”

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  1. Quoth the Raven 1
    11 March 2009 at 7:04 pm

    I personally don’t like it at all. We should not be propping up large businesses at all in any manner. I know 100 employers isn’t particularly large, but the crisis we are in is a symptom of centralisation and we ought not to privelige large businesses. Let them fail.

  2. Bill 2
    11 March 2009 at 7:11 pm

    If the company is looking at genuine redundancies and enters in to a ‘deal’ where they can lay off 1 in 10 for one day a fortnight on the proviso that no-one taking up the deal can be made redundant while on the scheme and then goes belly-up three months down the track….?

    As for the CTU backing it, it really does sound like workers are being encouraged to join their union so they can lose a days pay! I’m sure there has been commentary to the effect that only a union could broker a one day off deal because of the complexity of deciding whether the company is being genuine.

    If a company is going to go belly up then it will go belly up. If it isn’t then it wont. If it is looking at making some workers redundant, then is it not better to argue that net profits should take a back seat to workers continuing in employment?

    The whole thing strikes me as a pile of shit. I notice that at least the EPMU has demanded some bottom lines with regards employer top ups, but that has been contrasted with Kelly welcoming everything with open arms in the Herald. Yeah, I know, it’s the Herald and the piece is possibly misleading and the EPMU are not as isolated as the article implies.

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10561053

    • Bill 2.1
      11 March 2009 at 7:14 pm

      Edit not working.

      That last line should read “…and the EPMU possibly not as isolated as the article implies”

  3. SPC 3
    11 March 2009 at 7:12 pm

    One wonders why the Environment Ministry did not apply this policy rather than lay off workers.

    The whole point is/was to share the burden and prevent the lay off of workers – which is why the focus is on larger employers – who can instead of cutting one job -reduce the hours of work of 10 (instead of losing 10 jobs reducing the hours of 100 etc).

    As for the issue of re-training – this would be better left to a focused programme offering the laid off/unemployed skills training in return for work.

  4. Johnty Rhodes 4
    11 March 2009 at 7:16 pm

    QTR – the business will not fail, it will make people redundant first to try & cut overheads. In reality, business should be allowed to go to short weeks if it will save jobs in the long run, don’t you think? Employees will be better off doing this instead of being unemployed. This is the real crux of this debate. We live in unique times.

    However, letting business like Kiwirail fail is a great idea though. It does not even start to make money and road can carry the slack. I wonder what it’s NPV is? I agree with you there QTR:) If the idiot Cullen did not buy it in 2008, think of how little it would be worth now, Toll may of been in a position to offer $1 for it. Even then it would be a dog of a business.

    • Quoth the Raven 4.1
      11 March 2009 at 7:39 pm

      Employees will be better off doing this than being unemployed in the short term. But what about the long term? We have a systematic failure and the system needs to change. Governments and large corporations are trying their best to stop the state-corporate plutocratic system from toppling. I don’t particularly like my tax dollars going to prop up poor business models and keeping up the profit line of large corporations. Thus is captialism though.
      We don’t live in particularly unique times it’s just that the terrible exesses of our corporate masters have been laid bare and the synergy between these corporates and the state is there for all to see.
      This is a clear cut case of privilege. Do you like privilege? This is capitalism at work not the market.
      Selling Kiwirail is not allowing it to fail if that’s what you mean. Kiwirail has no competitors anyway. Selling it would just provide a monopoly to a state favoured corproation. So hardly different from a state monopoly.

  5. Daveo 5
    11 March 2009 at 7:30 pm

    The difference is the CTU doesn’t have members who they’ll have to sell this too, whereas its affiliates do. In my view Helen Kelly’s been co-opted. But that’s just my view.

    • Lew 5.1
      11 March 2009 at 7:52 pm

      Daveo,

      The difference is the CTU doesn’t have members who they’ll have to sell this too, whereas its affiliates do. In my view Helen Kelly’s been co-opted. But that’s just my view.

      Not just your view.

      L

      • Daveo 5.1.1
        11 March 2009 at 8:06 pm

        I don’t share Pablo’s views. He reads like the typical kind of armchair radical idiot who’s never had to organise workers in his life.

        You hear a lot of these types attacking the union movement based on ignorance and bigging up Unite because they’ve read McCarten’s ill-informed columns. Little do they know the guy’s a laughing stock in the broader movement with only 600 paid up members and the rest subsidised by McDonalds. He’s still riding Simon Oosterman’s successes with the Supersizemypay campaign.

        Before Pablo gets too excited about Unite’s results he should start asking what they’ve actually achieved, beyond a column in the Herald. Same goes before he bags the rest of the movement as ‘party apparatchiks’ and ‘sellouts’.

        • Bill 5.1.1.1
          11 March 2009 at 8:22 pm

          And in the words of a ‘class betrayer.’ (Pablo’s words)

          The Engineering, Printing and Manufacturing Union said the pay out was “underwhelming”.

          “Unless employers are willing to meet this subsidy with a substantial top-up of their own it’s unlikely to be accepted by workers,” national secretary Andrew Little said.

          “As far as the EPMU is concerned, this will be a bottom line.”

          Mr Little said the amount was “miserable”.

          “Five hours at the minimum wage is a miserable level of subsidy for a day’s lost pay and our members simply won’t wear that sort of loss.”

  6. SPC 6
    11 March 2009 at 7:41 pm

    As for creating jobs, which is more relevant in a downturn – the Job Summit missed out on two of the better ideas.

    Government finance to farmers to do the work required to get the effluent and nutrients out of our waterways – farmers can pay back the loaned money. It’s work that needs doing asap and not just for the jobs it would create.

    The other is completing some of the building projects that have been stopped because finance has been cut off. The government can increase its housing stock – let them out to those on the waiting lists and then later sell them when the market recovers. This would sustain jobs in the building sector and mitigate the boom bust cycle.

    PS Bill English has replied to my 2008 letter on funding the Super Fund – he says that to sustain the present level of NZ Super in the future we need to establish a reserve now to mitigate the rising cost to taxpayers. He says the government is committed to continuation of the Fund as an effective vehicle for pre-funding NZS costs. All very bi-partisan in tone.

    As to my idea of transferring state assets into the Fund rather than cash, he says the government will not sell state assets and says the Fund would need to be able continue trading in its assets to maximise profits – so they must reject the option of passing on state assets into the Fund (I suggested the Fund only off-load them in the longer term to Kiwi Saver funds so they stayed in local ownership).

    Given todays news the most interesting thing to note is this

    “Indeed, the Funds liquidity in a time of economic downturn is one of its advantages in the marketplace, as it is able to exploit opprotunities to acquire assets while company stock prices are low relative to future potential earnings”.

    Which is an argument to use ones ability to borrow money and maximise opportunities now – not to reduce ones financing of the Fund …

  7. mike 7
    11 March 2009 at 7:47 pm

    “Why do the taxpayer and the worker have to pay but the employer not?”

    IB – the whole point of this is to take pressure off the employer during the downturn to minimise redundancies. Should a worker not have a choice between sacrificing some pay to keep his job?

    • Quoth the Raven 7.1
      11 March 2009 at 7:49 pm

      I bet if Labour had announced this you’d be saying “Shouldn’t the taxpayer have a choice?”

      • gingercrush 7.1.1
        11 March 2009 at 7:57 pm

        And the counter-argument would be that many on the left would agree with such decision making. Partisan politics plays both ways QtR. Maybe the hard-left wouldn’t have a bar of it. But I have no doubt that moderate left voters would agree with this. Maybe some of them do now. But certainly had this been a Labour policy, all those soft left voters would be saying, “Well done Labour”.

        I take note that if you go to the right-wing blogs, the majority of them are saying they hate this idea and that workers should get nothing. So it plays both way. I don’t think its perfect. But anything that can save jobs surely is a good thing.

        • Quoth the Raven 7.1.1.1
          11 March 2009 at 8:22 pm

          Absolutely correct. I bet many Labour supporters would like this. I don’t.
          But anything that can save jobs surely is a good thing.
          No not necessarily so at all. There are numerous ways to save jobs and I’m sure many would be better than this. Saving jobs by privileging large businesses is not the way to go.

        • Quoth the Raven 7.1.1.2
          11 March 2009 at 9:16 pm

          I take note that if you go to the right-wing blogs, the majority of them are saying they hate this idea and that workers should get nothing.

          I just had a look at Kiwiblog and the righties over there don’t like it. That’s bloody funny. This is a big slip up for National. Their incompetence is being laid bare.

          • gingercrush 7.1.1.2.1
            11 March 2009 at 10:58 pm

            Yeah but I don’t think the majority of users that comment on blogs are that reflective of National or Labour voters. Blogs on the whole tend to attract the harder voters. So people that will vote Act or the Green party. That isn’t to say many are Labour or National voters.Just that I don’t think many reflect those two parties.

  8. djp 8
    11 March 2009 at 7:51 pm

    Why do the taxpayer and the worker have to pay but the employer not?

    Er, the whole point was to reduce costs to businesses so they wont make people redundant

    Not that I am a fan of this idea at all.

  9. Jum 9
    11 March 2009 at 7:53 pm

    Johnty Rhodes
    March 11, 2009 at 7:16 pm ‘letting business like Kiwirail fail is a great idea’. Reading the arrogant slop you consider to be comment is proof enough of your selfish rightwing dysfunction.

    There are two things that will make National redundant once again in 2011 and that is ruining Kiwirail preparing for selling off, and the other is the effect on those who cannot drive, who cannot afford a car, who don’t feel able to drive in cities and those who are forced to transport the above to where they need to go all at 100% extra cost as opposed to the wonderful free travel for the olds. (Unless NAct is planning to quash that too.)

    ‘Unique times’ – nonsense. Whenever people are becoming satisfied with life and gaining some control over their own lives and are less dependent on their employers’ goodwill, we have a ‘unique’ financial disaster… funny that. Moneymen-made disasters are never unique, never accidental and never in the interests of the vulnerable.

    • Johnty Rhodes 9.1
      11 March 2009 at 8:05 pm

      dum jum – National redundant in 2011, red nose day is it? phil-in as our PM, LMAO. Kiwirail was fucked before 8 Nov. Remember, Labour had only $120M set aside for it when it needs $2bn. So no-one in their right mind would not buy KR, even Cullen would not buy it twice, on second thoughts…………

      Remember, it is these private businesses that have given us employment & reasonable wealth over the years, not the government. To come out the other side after this mess is sorted out we will still need private business to employ.

      Remember comrades, the Soviet Union was a real great place to live in, Tui Billboard.

  10. Bill 10
    11 March 2009 at 7:56 pm

    How many possums we got? How many rabbits?

    And we’re going to have how many unemployed?

    In no way would this be a goer for everyone, but….

    Free market ideology says you find a niche; exploit and export….

    Where else has possums? All that fur for a clothing industry (foreign based, of course!)….and food…..and rabbit is way over $30 per kg at the supermarkets right now. Free range (possibly or probably) organic.

    So set aside x million $ and split it by the number of possum culled in a season. As time goes by and possum numbers fall, the fund level is maintained and possum is worth…..lets just say, very worth while.

    Same for rabbits…or farm them instead of or as well as sheep.

    Crazy idea, right? But any more crazy than a fucking cycle way? Or compelling people to take time off work so they can stay in work?

    • gingercrush 10.1
      11 March 2009 at 8:01 pm

      My father does possuming in the winter. As of late the price of fur has been down from what its been. And of course its not always consistent so you need some good savings when things get tough. He’s at the freezing works at the moment.

      Possuming nor rabbits are a solution in themselves. But I’m sure there are people in rural communities that with a bit of money to help them out could make a real go at possuming.

      • Bill 10.1.1
        11 March 2009 at 8:15 pm

        Neither possuming, rabbits, cycle ways nor a nine day fortnight.

        Probably not massive bailouts either. Nor slash and burn and privatisation at basement bargain prices.

        Maybe, and not unrealistically, there is no solution and capitalism really is in a death spiral.

        And the old style socialism is not a solution either as it was predicated on there actually being resources to exploit and distribute more equitably.

        Meanwhile…

        • Quoth the Raven 10.1.1.1
          11 March 2009 at 8:23 pm

          Exactly, Bill.

        • Draco T Bastard 10.1.1.2
          12 March 2009 at 10:40 am

          Capitalism is a failed system – we just haven’t come up with the solution (or, that could be, not a solution TPTB will permit) yet so capitalism is the fall back option.

    • Tigger 10.2
      12 March 2009 at 11:02 am

      Maybe workers can shoot possums WHILE building the cycleway…

  11. Richard 11
    11 March 2009 at 8:04 pm

    This whole idea reminds me of carless days – seemed like a good idea to some, a pain in the arse to most, and totally ineffective.
    Any employer who thinks redundancies are going to be necessary in the next six months will never sign up to this. Those who do sign up will not be expecting redundancies, but wouldn’t mind cutting wage costs by 10% over the quiet winter months.
    As far as jobs go, I expect more jobs to be created in administering this scheme than will actually be saved by the scheme itself. Yes, thats right John Key – more evil beaurecreats!

  12. Psycho Milt 12
    11 March 2009 at 8:12 pm

    I must say, political stereotypes are being completely turned upside down at the moment. Here’s a National govt saying they’ll bill taxpayers to sub me $60 so I can spend one day a fortnight down the pub. WTF? Not even the Alliance came up with anything like that!

    Which leaves poor old Phil Goff yet again left with no avenue of attack beyond declaring it doesn’t go far enough – “The govt must subsidise more pub days!” Sucks to be him.

    • IrishBill 12.1
      11 March 2009 at 8:20 pm

      No, it’s the national government saying they’ll use taxpayer dollars to sub employers out of their payroll obligations. And they’ll provide a vehicle to reduce workers’ take home pay as well. That sounds like exactly the crony capitalism I’d expect from them.

    • Psycho Milt 12.2
      11 March 2009 at 8:38 pm

      The aim is supposedly to prevent redundancies and keep people in employment – ie, taking some weight off the employer’s payroll is exactly what it’s intended to be about. If it works I don’t have a problem with it, given that the alternative would appear to be to hold employers to their “payroll obligations” and watch them announce redundancies, outsource the jobs or go under. Also: it won’t be offered to me, but frankly I’d take 9 days’ work per fortnight for 9 days’ pay and no taxpaer subsidy like a shot.

      • IrishBill 12.2.1
        11 March 2009 at 9:14 pm

        You’re lucky you can survive a pay cut. Plenty of people can’t.

      • Psycho Milt 12.2.2
        11 March 2009 at 10:08 pm

        Can they survive redundancy and unemployment better?

        I’m skeptical about this kind of circus myself – as somebody pointed out already, it could just amount to taxpayers working to ensure the sustainability of poor business practices. But on the offchance it does turn out to work, that’s some people’s jobs saved. If you’re saying the decent thing is to stand staunch for full hours on full pay or no hours on no pay, it doesn’t seem to me the people who end up on no hours and no pay would be likely to thank us for it.

        • IrishBill 12.2.2.1
          12 March 2009 at 7:47 am

          No, I’m saying the decent thing to do would be to make employers pay 50% of the shortfall.

  13. Bill 13
    11 March 2009 at 8:48 pm

    Just realised that WINZ are going to love this!

    If a qualifying factory worker is on min wage, then every second week they will earn $384 before tax plus $60 top up (also taxed?).

    So, every second week they will have to recalculate entitlements such as housing supp and so forth.

    Maybe redundant workers could apply for a job at WINZ to help with the increased workload?

    • Lew 13.1
      11 March 2009 at 9:24 pm

      Bill,

      (also taxed?)

      Yes, any top-up will be paid as salary/wages and taxed accordingly. This is as it should be, else it would be better to take the 5h top-up than to work 5h at minimum wage.

      L

      • Bill 13.1.1
        11 March 2009 at 9:59 pm

        It’s 8 hours lost wage, not 5. Anyway…

        • Lew 13.1.1.1
          11 March 2009 at 10:03 pm

          It’s three hours’ lost wage, assuming minimum wage. But the point of taxing it is to avoid a moral hazard where people would be more inclined to take the money than to work.

          L

          • IrishBill 13.1.1.1.1
            12 March 2009 at 7:50 am

            There’s no moral hazard if there is a strict criteria for access to the scheme. I’ve still not seen any sign from National of how that will be administered.

            Cap: “Rough year”. I think it will be a little longer than that.

  14. Jum 14
    11 March 2009 at 9:29 pm

    Johnty Rhodes
    March 11, 2009 at 8:05 pm

    The fact you can somehow turn the obvious disadvantages to people not able to use public transport into communism proves your dysfunctional state yet again.

    Kiwirail will cost less in the future than roading will. (The taxpayers are paying all the roading costs and if ppp will be paying all the social costs.) Typical of a right extremist to imagine it is cheaper to transport by truck (private firm), instead of rail; cheaper to repair all our roads from constant damaging use (private firm), instead of repairing rail tracks or laying new ones. Yes the obvious of course is private businesses get more money out of the taxpayers and the taxpayers get nothing out of the government like subsidised transport for school children, stress free travel, the social aspects and tourism of relaxing while travelling long distance, etc.

    As usual the extreme righties don’t consider others; it’s all about ‘take’ in your language, and you have learnt nothing about conserving the future unless its yours. Selfish prxxks.

  15. Mike 15
    12 March 2009 at 7:48 am

    What happens to the 8% holiday pay for that missing day? And the employer’s Kiwisaver contributions?

    This poorly thought out scheme seems to be based more on public relations than actual outcomes.

  16. rainman 16
    12 March 2009 at 8:17 am

    “This poorly thought out scheme seems to be based more on public relations than actual outcomes”

    Ah, I see you’ve met our government then.

    It will be a long three years, that’s for sure.

  17. sally 17
    12 March 2009 at 8:25 am

    “This poorly thought out scheme seems to be based more on public relations than actual outcomes.”

    Welcome to the Crosby|Textor Coalition.

  18. Rachael Le Mer 18
    12 March 2009 at 9:55 am

    I will hire more gals for the influx of bored men expected to frequent my establishment. How exciting, life is one big holiday for me.

  19. Rich 19
    12 March 2009 at 10:51 am

    I just did the sums,.

    $20 million will pay for the subsidy for less than 8,000 workers. Since 10 workers need to be on this scheme to save one job, this will *save* less than 800 jobs (even assuming that every firm using the scheme was actually going to make people redundant).

    By some reckonings, the coming depression will wipe out 150,000 jobs in NZ.

    Like the cycleway, this is just a bogus scheme that gives the impression of doing something.

    • Draco T Bastard 19.1
      12 March 2009 at 11:03 am

      It’s unlikely that one policy will save 150k jobs. Not that I think NACT are trying to save jobs though.

      • Tane 19.1.1
        12 March 2009 at 11:15 am

        Best case scenario is 2,500 jobs saved. That’s based on a Government prediction of 25,000 people taking up the scheme on the basis of ten people per one job saved, and the scheme having a 100% success rate in saving jobs.

  20. gobsmacked 20
    12 March 2009 at 11:06 am

    John Key’s Big Idea …

    “Fishing Friday”.

    • Bill 20.1
      12 March 2009 at 11:28 am

      Very Catholic that.

      Maybe phase two will involve being reconciled with our place in the scheme of things, saying words over our Friday fish and looking forward to our righteous heavenly reward.

      Except…been in phase two for a few generations now. So the reinstatement of fish on a Friday it is then. Followed by dessert of pie in the sky. Oh how we progress!

  21. BLiP 21
    12 March 2009 at 1:16 pm

    John Key’s 9 Day Fortnight = Titanic + Deck Chairs