2018 06 – Letter From New Zealand

Letter From New Zealand

by Feargus O’Raghallaigh

Every day, every hour … and then maybe?

It’s only a matter of months since we got a Labour-led government and yet the change is noticeable. New Zealand Labour is not the CPSU and the present NZ Labour is but a very, very milky pink. Yet it has made a difference.

Even meetings of the New Zealand Fabians, surviving ’60s footsoldiers in the main, are suddenly well-attended and there is a distinct interest more generally in politics.

Business is, when polled, considerably less chipper than it was about the future despite continued growth, negligible inflation, including of wages, and record low interest rates.

Business utterly loathes Labour even though the new government keeps bending the knee to fiscal orthodoxy.

On the other hand one can sense changes in small things – and not so small.

For years bosses in NZ have kept the lid on wages – and could depend on National-led governments to help through continuing to undermine already weak unions. Now there is a Workplace Relations Minister, Iain Lees-Galloway MP (Lab., Palmerston North), who has baldly told businesses to stop complaining about alleged labour shortages. If they are having difficulties hiring, he says, think the unthinkable: offer and pay higher wages. Those employers who can’t hack this he has also said, should fold their tents.

He’s gone further. He wants to see increased unionisation, sacre bleu! He’s going to roll back (a little bit) anti-union legislation. The right to fixed meal breaks will be restored, the labour inspectorate numbers increased and so on. Little things? Well seen in the round, meal break and other restrictions collectively amount to the sorts of things, a general balance in the workplace, all in the name of ‘flexibility’, aimed at keeping workers cowed. Even chipping away as this government is doing, is significant.

Public transport workers are actually, increasingly regularly, going on strike in Auckland and likely to do so in Wellington. Here in NZ, local authorities ‘procure’ public transport provision through periodic re-tendering with bidders always focusing on wage cuts as a key element in their bids. Unlike the EU there are no transfer of undertakings laws here. Procuring public agencies (local and municipal authorities in the main) don’t give a toss about collective bargaining.

It’s nothing to do with the change in government but the Employment Court has handed down a decision in the case of one employer (Smith’s City, a big white goods retailer) on the definition of hours of work. Workers must be paid for (currently unpaid) time taken to bang up tills after closing and also for attendance at (so-called) voluntary pre-opening pep talks.

It turns out large numbers of companies were engaged in such not-paid-for sweating and now it is all spilling out. The practices are rampant throughout the retail trade – and probably further afield. Being paid from clock-in to clock-out is the law – and it is going to be enforced according to Lees-Galloway. I doubt that a year ago companies would be responding as they now are: hands up and (back) paying up.

Statutory meal breaks must also be respected (i.e. part of paid-for hours). Paid parental leave has been upped from modest levels (and the Prime Minister is pregnant, so motherhood is good). There is more to come on this front. Factory and employment inspectorates are to be beefed up and inspections intensified.

In the great scheme of history none of this amounts to a revolution. In New Zealand terms though it is for workers a big roll-back after decades of drudge, increasing exploitation at the margins.

The push now also is on for a ‘living wage’ as opposed to the statutory minimum wage. The living wage movement is particularly active in local government.

In other spheres too things seem to be changing, if again in small ways. There is in government a new emphasis on public transport – if yet though it really has to be seen in action. The role of public housing is being restored, though again we have to see the scale of the commitment. This is in the context of severe housing problems in the bigger towns and cities.

Unemployment remains a chronic problem – despite very low and falling national headline rates. Maori rates and young Maori rates especially, spectacularly spike above the national averages. These are deep intergenerational clusters with all kinds of surrounding issues and problems, the land of We Were Warriors, truly awful and depressing. And utterly incapable of being even managed under current policies, including policing, the policies pursued for decades.

The economy also remains a primary commodity producer – milk, meat, fruit and logs – and now all to China as opposed to the old country. There is also a depressing belief – amounting to a national, cross-political (and party) religion – in markets and competition and competitive markets as the solution to everything.

Against that one might point to the change in the remit of the Reserve Bank: to include employment and unemployment in its mandate as well as inflation. Well yes, except that like every other government in the world it utterly misunderstands the nature of modern money and further, continues to abide by ‘household’ concepts of public finance.

Which brings us to the bigger picture – the macro economy and the public sector – as opposed to the micro scene of the workplace. Here after the government’s first budget, we can begin to see where the problems will emerge. The dilemma for the government is the self-imposed tight fiscal orthodoxy, the so-called Budget Responsibility Rules (BRR). This effectively amounts to a continuation of the deficit elimination and debt reduction programme of the previous National-led government.

This is in the face of an election campaign and promises to reverse years of impossibly tight limits on for example health spending and education imposed by National government.

Nurses are queuing up for a big hike in their wages – and rightly so. District Health Boards (DHBs), their employers, need big increases in their central funding actually, the DHB model is busted. Local authorities are everywhere grappling with homelessness on the verge of another winter (it’s the southern hemisphere!).

Current public spending, in government departments, local agencies and public bodies, is everywhere impossibly straitjacketed after a decade of pursuit of budget ‘surplus’. Frankly it is impossible to square the circle, an impossible chimaera and a political stupidity.

Then there is the refocusing and expansion of the public capital programme – the shift away from big highways and toward environmental spending, a big public housing programme and increased spending on schools and hospitals.

Again frankly, the cap doesn’t fit. Same old ‘responsible’ Labour parties trying to be nice to capitalism and being ‘responsible’. And business and capitalism will never say ‘yes’ to Labour. Time ‘nice’ Labour gave up the ghost on that.