How well is New Zealand working?

How well are we working?
How well are we working?

Employers have slammed the government's scorecard on creating jobs and developing a viable growth agenda, a survey of business owners has found.

The Ernst & Young/Sunday Star-Times Job Creation Survey also indicated how widespread employers' concerns over unemployment and job creation are, with an overwhelming majority expecting it to be a major issue at the next General Election.

The survey participants were owners or managers, mainly mid-market, in a variety of industries nationwide.

Some answers from the survey on employers' expectations around employment this year.
Some answers from the survey on employers' expectations around employment this year.

It found that just over half of those businesses (54 per cent) had hired someone in the last year, but slightly less than that (51 per cent) intended hiring anyone in the year ahead.

When asked if they thought job creation was the responsibility of the government, the private sector or a combination of both, an overwhelming majority (79 per cent) said both.

However most were unimpressed with the government's contribution to that process.

When asked how to rate the government job creation performance on a scale of one to 10, with one meaning very poor and 10 meaning outstanding, 69 per cent rated it between one and five and less less than a third gave it a positive rating of six or more.

That trend was even more intensified when the survey asked people to use the same scale to rate the government's ability to date to develop a viable business growth agenda, with 71 per cent rating it between one and five and 29 per cent rating it between six and 10.

When asked how important they thought unemployment and job creation would be as an issue at the next General Election, on a scale with one for minor importance and 10 for critical importance, 78 per cent rated it between six and 10.

Ernst & Young partner Jon Hooper said the survey results were particularly significant because unemployment was what he called a "lagging indicator" that trailed other economic performance measures.

"We are really just starting to hit the heart of the problem now, which is why we're seeing these results saying it will a critical issue at the election," he said.

"They [the government] has started to implement some policies around creating a better {economic] environment here, but the message is very clear, that this is a critical issue."

"This shows that a section of the business community thinks the Government has failed," the Labour Party's jobs spokesman Grant Robertson said.

"We need a hands-on government, not a hands-off one and I think the message from the business people who have been surveyed here is that they think this is a hands-off government that is not playing its part. Nobody expects it to do everything, but they think the government is not coming to the party.

"That means having a government that's prepared to use the levers it has to help with job creation, from monetary policy to supporting firms with new ideas, to using the power of the state with building houses."

New Zealand Council of Trade Unions secretary Peter Conway said the government didn't have a magic wand to create jobs, "but they can do heaps more".

"They could... take back some of the $5 billion a year that went in tax cuts to those on top incomes, and create a $500 million a year Jobs Fund.

"They could maximise locally-made content in the $30b a year the government procures, expand vocational education, support community and environmental employment schemes, change monetary policy settings to support growth, invest more in housing and target higher levels of the Job Stream subsidies to those most disadvantaged in the labour market and stop reductions in the public service", he said.

Phil O'Reilly, the chief executive of Business NZ which represents many employers, said one of his biggest concerns was the number of unemployed young people with few or no work skills, many of whom were Maori or Pacific people.

His concern was that even when unemployment began to fall, and it was likely to do so only slowly, those people would remain unemployed because others with skills would be the first to get jobs.

There was "a very lively debate" among employers about how that should be tackled, he said.

"We are all grappling with what to do about that and a lot of it is about giving them skills."

He suggested the government should consider reintroducing a scheme that gave employers subsidies to hire young people and give them training.

"Although there's a cost to the government, it might get employers making that choice to hire them and give them some training," he said.

For full survey results, click here


The Government rejects criticism of its efforts to create jobs and growth in the economy, with Employment Minister Steven Joyce, pictured, saying it is working hard on both issues.

"Look at the last week," he said after reading through the results of the Ernst & Young Sunday Star-Times Job Creation Survey.

"We've had the PM in Mexico working on TPP [the Trans-Pacific Partnership], we've announced $25 million of research and development grants for Callaghan Innovation, we've got the mixed ownership model starting which is a boost to the capital markets which is an important part of the BGA [Business Growth Initiative], we've got the East Coast Oil and Gas study announced yesterday, and we've got the RMA [Resource Management Act] reforms announced a week ago.

"And the Crown accounts came out this week which said things are going better than expected and the tunnelling machine is turning up for the Waterview tunnel.

"So, in just one week, you could point to seven or eight things which are part of the BGA, and I think we'll see an increasing momentum this year around each of those things.

"We've produced an agenda [the BGA] which has something like 300 initiatives in it, but I certainly wouldn't be surprised if not every business has had the opportunity to read it."

Joyce made it clear he would not be taking up job-creation suggestions such as introducing more jobs in the state sector rather than shedding them.

"The other thing they would want us to do is get the Government's books back under control and and reduce the cost of capital and keep interest rates low and, unfortunately, they are two sides of the same coin. And, if we asked if they'd be prepared to have a higher Government deficit for longer, most would say no to that one," he said.

But he agreed more could be done to improve the chances of Kiwi companies winning Government supply contracts. He said procurement initiatives, to be announced in the next couple of weeks, that would include increasing the amount of notice given when tenders were called for, should address that.

Joyce said he believed initiatives already implemented to keep young people in school or training for longer were helping stem the flow of young, unskilled people into the dole queues, and he was working with Maori Party co-leader Tariana Turia to develop a programme to get more young Maori and Pacific Islanders into trades.


Sunday Star Times