- Date published:
8:30 am, September 24th, 2020 - 100 comments
Categories: covid-19, Economy, health, infrastructure, jacinda ardern, jobs, labour, Living Wage, minimum wage, uncategorized, wages, workers' rights - Tags:
This is a backpocket election – and that’s where most of Labour’s effort is going as it rightly should.
1.7 million of us now owe our jobs to Labour-led job subsidies. The ability to put food on the table, petrol in the car, and pay the bills, with work. As simple and as fundamental as that.
Hand-in-hand, most small and medium businesses in New Zealand now owe their continued existence to Labour-led business subsidies.
In the degree of economic stress New Zealand is now in, job insecurity remains high (though it was higher in May), so it’s Labour leading out the policies that sustain the strength of our employment.
By mid-July Finance Minister Robertson had spent an unheard of $13 billion to keep our jobs and businesses afloat, and that will have gone up since then.
Despite that massive spend and more, the New Zealand economy still contracted by 12% in the June quarter – the largest drop since records began in 1987.
That tells you the scale of trouble we would have been in had Ardern and Robertson not intervened on such a massive scale.
As Minister Robertson noted at the time, “This result was better than the treasury forecast of 16% and at the lower end of other commentators’ expectations. The June quarter includes almost the entire time New Zealand was in alert level 4 which we moved into on March 26 to this result is not surprising.”
Now, in an election, no one expects voters to be grateful. No one owes their vote to anyone. But apart from Prime Minister Ardern’s simple likeability, the next most important reason to give your vote to Labour is in managing the economy in the interests of the vast majority of New Zealanders.
National has been right to point out that proposing a minimum wage increase on a brittle and low-wage economy at this time is particularly hard on the small to medium businesses that make the great majority of our business numbers. But Labour is still pushing ahead with committing to lifting the minimum wage, again, from $17.70 per hour now to $20 per hour in 2021.
Absent the Multi Employer Collective Agreements many wish for, levering up the minimum wage is the most certain and across-New Zealand approach to higher incomes.
No business can say they didn’t see this coming, because this is what the campaigned on in 2017, to be implemented in 2021. Plus, you gain more sick leave under Labour, and they are proposing at least one more public holiday with Matariki.
That’s 55,000 New Zealand workers.
And 5,000 mental health and addiction support workers also got a decent settlement.
And 55,000 teachers got good increases.
And 30,000 nurses.
That’s not just a set of industry sectors – it’s a massive chunk of the whole of employed New Zealanders getting good pay increases. Well overdue, well deserved.
2. FREE CAREER TRAINING
For those industries where demand is still strong – such as infrastructure construction – Labour leader Jacinda Ardern has signalled that ALL apprenticeships will be free. No cost. This was set out in the budget this year, and has already started.
The fund covers course fees, compulsory course costs, and compulsory student services fees, whether paid by learner or employers. It’s targeting the staff needed most on a sustained basis, such as agriculture, forestry, construction, engineering, transport, mental health and counselling, and manufacturing.
And for those who lost their jobs during COVID’s worst days, that $490 a week (full time) or $250 a week (working part time) put a financial floor under so many when their employment world fell apart around them.
3. TAX THE RICH – AND DON’T TAX 98% OF US ANY MORE
Labour will increase the tax rate for the top 2% of earners – that’s where the wealth is. Income over $180,000 will get taxed at the new rate of 39%. Importantly, this levels the field with Australia who have that same income threshold but to an even steeper step of 47%.
The other big move some may have forgotten, was in extending the “Bright Line Test” to five years. That means if you sell an investment property within five years of owning it you pay a good chunk of the profit to the government in tax. Again, well signalled in what Labour campaigned on in 2017.
Government has got the tax signal right: target the wealthy and their property carefully, while seeking to support productive business, and leave well alone the tax impact on our incomes in this fragile and perilous job market.
4. KEEPING BUSINESS ALIVE
Businesses are the things that employ people in the private sector. Strangely, the current level of government support makes your job in the private sector arguably safer than those in many public sector industries, given the speed and scale of public sector restructures occurring this year especially in devastated local government and its businesses like airports.
During the worst of the COVID crisis, the Labour-led government provided $3.1 billion in tax-loss carry-back. In English, if you’re losing money this year or next, you can offset that against income from when you were profitable and get a good refund.
For all the thousands of little businesses trading products from their garage, they also made sure that all the big foreign companies paid GST on the smaller items. For multiple sectors, from tourism to the arts, there’s big chunks of money to keep their jobs going.
5. MORE LOCAL WORKERS SUPPORTED
While many of our parents and grandparents will tell stories of the season or two that they spent pickings apples in Nelson and elsewhere when they were young, it will take some persuading for Pacifika imported labour to be replaced by a new set of local young people. Because orchardists and viticulturalists need them to start on harvests in October this year, Labour hae announced that workers with expiring working holiday visas will be able to stay to fill short term work in horticulture and viticulture.
That’s 11,000 people – not enough to fulfil every role and leaving plenty of opportunity for young local workers in this next 6 months.
This gives horticultural farmers just this next few months to adjust and prepare for the fact that they probably won’t be coming back, and they will need to work very hard to attract local workers – on the new higher 2021 minimum wages of course. And also in this crisis year sustains faith with our special relationship with many Pacific island countries who rely on remittances from those making their way in New Zealand.
6. DOING PRODUCTIVE WORK
One dare not call it serendipity, but in March this year this Labour-led government outlined its $54 billion of transport projects, through the Government Policy Statement.
Then after the budget, in July they announced a further $3 billion in projects across 14 regions, which Labour expected to yield 20,000 jobs and unlock investment with a project value of over $5 billion. You can see how that is broken down by sector and by region here.
Then on August 18th Minister Robertson and Minister Twyford rolled out the projects that were going to get started the fastest, totalling $2.3 billion.
The list of projects near you keeps getting updated on the Crown Infrastructure partners site and you can see each one of them.
In terms of getting jobs started up, on projects in New Zealand worth doing, no New Zealand government has ever moved faster, or larger, than this Labour-led government.
7. HIGH TECH HIGH PAYING JOBS
Possibly the most astounding thing commercially about the COVID crisis is how much the crisis is a sectoral market shifter. New Zealand now has 29,000 tech firms with nearly 100,000 employees, contributing $16.2 billion to GDP and producing $6.3 billion in exports – it’s New Zealand’s third biggest revenue earner.
I can see it supplanting tourism in importance.
Locked in our studies and bedrooms with our laptops, the world doesn’t care about our location on the map, instead it recognises our innovation, safety, and ease of doing business. The nature of business – harbour bridge crises excluded – is more about connectivity and bandwidth as opposed to freight distances.
So from April this year this government has generated bigger R&D incentives.
As well as the longstanding biggies like Xero, Tait, and Endace, we now see Pushpay, Vend, and Timely pushing up fast. Yes, the new-generation jobs we thought were coming, are here and are growing. Check out Seek for all those unfulfilled tech jobs begging for your skills.
I have a sneaking suspicion there’s more to come from Labour in this space in the weeks to come.
It’s because 2020 has been an economic catastrophe that Ardern and Robertson threw more at sustaining us in employment than at any other time in our history.
For the great majority of New Zealand of us workers, and our families, Labour is defining itself in 2020 with the meaning of the very word labour: to keep people earning, on jobs that are worth doing, or shifting to careers that are needed onto projects that sustain our country into the long term. It’s the anxiety about the economy that is topmost in voters’ minds this election, quite reasonably.
When you set it out, Labour has set out policy measures on an massive scale to meet that anxiety and turn it into a believable employment future for New Zealanders.