Unions fear new job losses

Last updated 08:14 14/02/2013

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Unions are warning another round of more significant redundancies could be announced in days following news power company Contact Energy will shed 100 of its 1100 staff.

Engineering, Printing and Manufacturing Union national secretary Bill Newson said this morning he knew of one decision that had been made, and would be announced as early as today.

Another was pending, although no final decision had been made and he hoped the job losses could be averted.

He said he could not name the companies because the union received information in confidence.

"This is serious stuff."

The news of job cuts at Contact comes on the heels of news 192 jobs will go at Summit Wool Spinners in Oamaru and about half the 400-strong workforce at Mainzeal face redundancy after the construction firm was put into receivership.

National and Labour have both made jobs their main focus this year. The latest data shows a fall in unemployment to 6.9 per cent but also a sharp drop in the participation rate suggesting the labour market is weak.

The job losses at Contact are being partly blamed on weak energy demand, but manufacturing companies have told an Opposition-initiated inquiry the high New Zealand dollar is also curbing investment and harming profits.

Finance Minister Bill English yesterday said bosses calling for a lower dollar want to cut workers' wages.

He told Parliament's finance and expenditure select committee: "What they're actually telling you is they want to cut the real wages of their workers, because that is the other side of the equation. They want to cut the real wages of their workers," he said.

"The workers need a voice in this debate because no one is sticking up for the fact that the exchange rate underpins household living standards."

But John Walley, who heads the New Zealand Manufacturers and Exporters Association, said that while it was "undeniable" a weaker currency hit consumer purchasing power, manufacturers were concerned about their ability to operate in this country.

"You don't worry much about purchasing power if you don't have a job," Walley said.

Manufacturers were concerned that the high dollar, which makes our exports more expensive overseas, could push them out of business.

"It doesn't matter what the wages are, we won't be here to pay them."

Labour finance spokesman David Parker dismissed English's comments as "nonsense".

"What [manufacturers] want is an exchange rate which enables them to compete internationally so they can afford to pay wages," he said.

"The idea that an artificially high exchange rate is good for New Zealand workers because it holds down the price of flat screen TVs is a nonsense if they can't earn a decent wage."

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- BusinessDay.co.nz

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