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Creating jobs more than just a election policy label

Nov 18th, 2011 | By | Category: Featured Article, Features, Front Page Layout, News

 JOBS may be a big election issue but business commentator Rod Oram (right) questions the reality of job creation policies listed on party websites.

The Greens have their comprehensive Green Jobs plan, National has an assortment of policies which it claims will boost employment and Labour has a brief six point plan.

Mr Oram says he is hesitant of the term “job creation policy” because there isn’t always as much substance to the policies as the parties claim.

“Those are the jobs that they hope will come out of them (the policies) but that’s really difficult to forecast how many of those jobs are going to be there and whether they’ll eventually turn up.

“So those numbers are rather more wishful thinking of those parties, rather than actual job creation policies.

“They are economic development policies and not specifically job creation ones,” he says.

The Green Jobs plan outlines how 100,000 green jobs will be created.

The plan involves direct government investment, building sustainable infrastructure, greening small and medium enterprises, introducing new regulation, reforming capital markets and retaining ownership of our state-owned enterprises.

Direct investment will involve expanding the Heat Smart home insulation programme by including 200,000 homes over the next three years, costing $350 million and employing 4000 people directly.

The Greens outline claims that if one percent of the global market for renewable energy solutions is captured, a $6 to $8 billion export industry will be created employing 47,000 to 65,000 people in new green jobs.

Mr Oram says while this may be mathematically correct New Zealand does not have the capability to capture that market at this stage.

“If you’re not capable, you won’t get the one percent,” he says.

“I think it’s really important that we should be doing that but a lot more work needs to go into that to make sure we are capable of it.”

National unveiled its job creation strategies under its employment relations policy which includes rolling out high speed broad-brand, supporting rural growth, investing in infrastructure, encouraging the forestry industry, investing in irrigation and implementing a controversial youth wage.

The youth wage is set at 80 percent of the adult minimum wage and will be eligible to three groups of people:

  • 16- and 17-year-olds in their first six months of work with a new employer.
  • 18- and 19-year-olds entering the workforce after more than six months on a designated benefit.
  • 16- to 19-year-old workers training in a recognised industry course involving at least 40 credits a year.

“The starting-out wage will give some of our youngest and most inexperienced workers a much-needed foot in the door. It will provide them with valuable work experience that may not have otherwise been available to them,” says John Key (right).

Mr Oram, however, says there is quite a bit of division of opinion on youth wages.

“Obviously parties to the right believe that if you cuts those wages more jobs will be created and parties on the left say, that no people deserve to start on a proper wage, regardless of what age they are,” he says.

“Rather inconveniently for the Government, the Treasury has produced a report, showing that the lower youth wages, and lower minimum wages don’t create more jobs or convertly there’s lots more conditions that go into employing someone.”

Act also supports the youth wage but does not believe in government sponsored employment.

Party president Chris Simmons (left) says government should also not be in the business of job creation as this will never be sustainable because the jobs will be a cost on the economy.

“Businesses are the employers of people and so creating jobs by government legislation does not work.”

Mr Oram didn’t agree with Mr Simmons statement saying “if you look at countries that we admire for their economic development like Singapore, or Ireland before it went off the rails, there was a lot of work that went in by Government to help investors and companies to build industry – there’s an important role for Government to play, however it’s hard to do well.”

The right policies, resources and bringing people together – can play a very positive role in economic development says Mr Oram.

Labour has a more simplified approach with a six point plan including:

  •  A savings scheme that will provide new investment for New Zealand businesses.
  • Supporting innovation to develop new products to sell to the rest of the world.
  • Changing monetary policy to support exporters against a volatile New Zealand dollar.
  • Helping unemployed youth into training and apprenticeships.
  • Stimulating the economy by putting money into the pockets of those who need it.
  • Making Kiwi jobs a consideration when issuing government contracts.

The Mana Party opposes the youth wage and instead proposes that the minimum wage be increased to $15 dollars an hour.

Its employment policies include:

  • Introduce a requirement for all State-Owned Enterprises and Māori corporate entities to prioritise the employment of New Zealand residents or face significant financial penalties.
  • Incentivise the processing of New Zealand resources in New Zealand so the value-added component benefits the country.
  • Introduce a scheme to create new community service jobs for those currently unemployed. Involving work in schools, hospitals, retirement villages, kuia/koroua flats, and community organizations providing adult literacy and numeracy learning where required.
  • Increasing government investment in papakainga and other community housing construction projects in areas where there are shortages of low cost rental housing, significantly boosting employment in the construction industry.  (Investment in environmentally sustainable housing is of particular interest as it is more labour-intensive, having the potential to create greater levels of employment)
  • Support the creation of quality apprenticeship schemes that can train young people in trades training, without the burden of high tertiary education fees.

NZ First’s 2011 manifesto claims that the official unemployment figures are skewed:

“The present measurement of employment allows that someone on one hour a week employment is deemed to be in employed. That criteria is a fiction and it is more likely that New Zealand unemployment is nearer 10% which more accurate analysis (Roy Morgan) suggests.”

Its manifesto states it will boost the economy and create more jobs by reducing business compliance costs, supporting the Tertiary Education Commission in enhancing the relationship between employers and Industry Training Organisations, up-skilling labour to meet employers’ needs and extending the Modern Apprenticeship Scheme to older trainees.

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