Beneficiary-bashing Bill back in Parliament, and worse than ever

Paula Bennett’s draconian Social Assistance (Future Focus) Bill has been reported back to Parliament by the Social Services Select Committee. 

Despite overwhelming opposition to the Bill by submitters, the National Party used its majority on the Select Committee to report it back largely unchanged. They even decided to recommend a harsher reduction of benefit regime for beneficiaries who are deemed to have failed a work test than had been proposed in the original Bill. 

Here’s my minority report from the Select Committee on behalf of the Green Party: 

The Green Party believes that this Bill will hurt New Zealand’s most vulnerable families, increase their housing and food insecurity, encourage discrimination against beneficiary families, and exacerbate the growing gap between wealthy and poor families. 

Of the 71 submissions to the Social Services Select Committee on the Bill, only four were in support of it proceeding. The Green Party shares the concerns of many of the submitters that the Bill is ideologically inspired faith-based legislation that lacks evidential support for its most significant provisions.  

That concern is also reflected in comment in the Ministry of Social Development’s Regulatory Impact Statement on the Bill: 

“There is no research currently available which accurately quantifies the size of the behavioural response from these changes in policies. This prevents estimates, with the degree of accuracy required, from being made of the number of people who will move from benefit to work over a year, as a result of the proposed changes.” 

The Green Party does not share the “Work First” ideology that underpins this Bill. The ideology – that any paid work, however menial and at whatever conditions and pay rates, is better than no paid work – both risks causing real financial and social harm to some of New Zealand’s most vulnerable citizens and fails to recognise the value of the unpaid work that beneficiaries undertake caring for children or disabled and elderly adults and providing voluntary contributions to their communities. 

Work testing domestic purposes benefit

The Green Party believes that parents themselves are the people best qualified to make the decision as to how, or if, they balance their childcare responsibilities with paid employment.  The Bill will deny parents that choice if they are in receipt of a domestic purposes benefit and their youngest child is aged 6 or over. They will be required to work 15 hours a week, if such work is available, whether or not they consider this is in the interest of their children

Many parents will find it difficult to obtain quality and affordable childcare, particularly during school holidays when they will still be expected to be working but their children will not be at school.  There are significant risks to child welfare of children being left “home alone” under the policy that were identified in a 2002 evaluation of the 1999 reforms that previously imposed a work test on sole parent beneficiaries.  That evaluation recommended that further research be undertaken on this risk, but no such further research was done.

The “work first” approach, coupled with the abolition of Training Incentive Allowance for tertiary education, risks parents being moved off domestic purposes benefit into lowly paid, temporary, and/or casual employment to satisfy the work test.  The Green Party fears this is likely to increase labour market churn, with negative implications for both employers and the individuals concerned who are forced into such employment.

The Green Party also asserts that there is no evidence from the previous occasion when domestic purposes benefit was work tested subsequent to the 1999 reforms that supports the view that a work testing regime has any significant impact in moving domestic purposes beneficiaries into paid work.

Benefit abatement

Prior to the 2008 election the National Party pledged to relax the income tests for benefits so that all income less than $100 a week was exempt from income testing.  That was a proposal that the Green Party supported. However, the Bill retains the current income testing threshold of $80 for unemployment and sickness beneficiaries.  The result is that all unemployment beneficiaries who earn $100 a week or more will be $14 a week worse off than if the Government had fully implemented the National Party’s pre-election pledge in this regard.  This will not only impact negatively of the personal finances of unemployment and sickness beneficiaries who work part-time, but will act as a disincentive for them to undertake additional part-time work.

 Work testing sickness benefit

The proposals in the Bill to work test sickness beneficiaries appears to be a knee-jerk response to increasing numbers of sickness beneficiaries, but the Green Party is concerned that the Social Services Select Committee was provided with no evidence that it is likely to be successful in stopping the growth in sickness benefit numbers.

Several submitters referred to a similar approach taken in Australia in 2006, to an evaluation of that policy that revealed that it was spectacularly unsuccessful reducing Australian disability support pension numbers, and to comments earlier this year from Australian Minister for Families and Community Services, Jenny Macklin, that “The big stick approach had no impact on the number of people on disability support pensions. In fact, the numbers kept going up. It was a simplistic approach to a complex problem.”

The Green Party believes the Australian experience would suggest that work testing sickness beneficiaries is unlikely to achieve its objective of reducing the growth in sickness benefit numbers. 

Furthermore, the Green Party is concerned work-testing of sickness beneficiaries could have significant negative impacts, including the added stress of an expectation to look for work, under threat of sanctions such as reduction or loss of benefit, being likely to be detrimental to the health of beneficiaries, particularly those suffering from mental illness.

The Green Party is also concerned that there will be reluctance among employers to employ people with poor employment records due to ill health or disability. Many of those who are employed are likely to get only casual and/or temporary work, so their work test obligations, and the stress they cause, will be ongoing.

85 thoughts on “Beneficiary-bashing Bill back in Parliament, and worse than ever

  1. “It was a simplistic approach to a complex problem.”
    Sums up National’s total approach to governing!

  2. Employers can offer jobs at minimum wages and many will be obliged to accept. Raise New Zealand’s incomes to the same as Australia? What a joke!

  3. Metiria says “The ideology – that any paid work, however menial and at whatever conditions and pay rates, is better than no paid work ”

    Or you could take the Green Party approach. That a pimply faced teenager with no experience or work record MUST be paid the same as someone with decades of work experience.

    Who is an employer going to choose?

    So what happened when the Green Party banned the youth wage?

    Surprise surprise – Youth unemployment skyrocketed – on introduction of the Green Policy youth unemployemnt went from 15% straight up to 25% – what a diaster for youth.

    It Metiria wants an example where good intentioned ideology has been a total failure, just look at your own policy on youth rates.

  4. Sprout – why should people bludge off the taxpayer when they are offered a job?

    I find it disgusting that you think people should be able to have a choice between a job and bludging on the dole.

    Because when you have a chance of a job and turn it down, that truely is bludging.

  5. You can have all the wellfare you desire provided you have the budget to pay for it.

    At current budgetting we are unable to sustain the welfare programme in New Zealand.

    It would be most appreciated if the co leader of a parliamentary party could actually do some basic economic forecasting and show from which budgetted income the state can spend the welfare money.

    Income redistribution it is called but with a limited income (and huge borrowing) the volume on income able to be redistributed is restricted.

    For a Greens co leader to show no concept of budgetting in wanting unlimited welfare is a sad reflection of that leadership.

    One day the Greens will provide the electorate with a yearly state budget that is sustainable and all encompassing.

    Till that is achieved, all the co leaser has done in her comment to parliament is a non sensical rant.

    Greens, still trying to have a first world welfare system in a country with a third world economy.

  6. And not in a good way. Using phrases like that negates any point you may have. We know your views are tainted with prejudice and can discount anything you say from that point on. At least, I do.

  7. photonz1, this is not about people “bludging on the dole”.

    The Green Party has always supported people on the unemployment benefit being required to seek, and if offered take, suitable employment.

    This Bill is about the State forcing people who have childcare responsibilities or who are sick or disabled to look for work, despite their meeting the statutory qualifications for DPB or sickness benefit. The Greens maintain that should be the choice of the individual concerned, to made on the basis of whether the she/he considers working is the best option best for her/him and her/his family.

  8. @Gerrit 5:50 AM

    You can have all the wellfare you desire provided you have the budget to pay for it.

    Gerrit, this isn’t about the welfare budget – it is purely about ideology. The Regualtory Impact Statement for the Bill shows that the Ministry of Social Development doesn’t even know whether it will have any significant impact in moving people off benefits and into work. The Australian experience would indicate it won’t. There is no evidence it will save money.

    What’s more, there will be significant additional costs in administering the work testing of DPB and sickness benefit.

  9. As I see it, the biggest problem with dealing with the NACTs is this assumption by many that they can be reasoned with and that a good argument will sway them.
    “Ideologically inspired faith-based legislation” sums up how useless argument is, although I wouldn’t say that “we NACTs and our millionaire backers are rich selfish so and so’s who want to be NZ’s feudal lords” is so much an ‘ideology’ as more of an ‘ongoing plan’.
    Until the NZ public wake-up and start actively working against this government we will all be taken for a ride as our pockets are emptied into those of the real parasite class…

  10. frog – you talk of people with health issues or some sort of disability or childcare responsibilities – that covers half the workforce.

    And you think they should have a “choice” of if they work or not. Why don’t we all just grab a benefit instead of working if it’s a choice.

    Most parents I know can’t afford to have one of them staying at home after their kids get to school age, including single parents.

    So you have people who can’t afford the luxury of staying at home when their kids go to school, working hard and paying tax, so that beneficiaries can have that luxury.

    I didn’t hear your opinion on the massive leap in youth unemployment when ther disasterous Green Party youth wage law came in.

  11. toad,

    Dont know if it is 100% ideology. There are certain amounts of financial constraints as well.

    Declining personal and corporate tax take for example wont be offset by an increase in GST or the ETS.

    In fact I expect the tax take to go down as people spend less due to the GST hike and the increase in prices due to the ETS.

    The biggest area of growth seems to be the untaxable black market.

    Irrespective if you see it as ideology or not, it still beholds the Greens to come up with budgets if the claim to want to have a policy to increase expenditure.

    With the babvy boomers retiring and expecting to live something in the region of an extra thirty years (welfare payments as well remember) the country simply cant afford to have 1 tax payer supporting 1 non-tax payer (benificiary or state employee).

    It simply is not sustainable.

    Sad that for once Dr Brash came out with a very sensable retire age proposal but got shot down, not for the proposal but because he was Dr Brash.

    Greens should take more notice of good ideas, not shooting the messenger.

  12. robertguyton says “We know your views are tainted with prejudice and can discount anything you say from that point on. At least, I do.”

    Fantastic. That will free up band width from your never ending sniping and put downs.

    I bet you can’t do it.

    Metiria – your last paragraph is concerned that people with poor employment records or illnesses won’t get a chance to work. They’d have a much better chance if they could have a trial.

    While the Greens are against this, it’s interesting that just the sort of people you claim to be concerned about, are in favour of it.

    Immigrant groups have spoken very positively about the 90 day trails. We might get a few more highly skilled poeple working in their specialised fields instead being wasted driving taxis.

  13. This is just another part of this Govt.s efforts to ‘slash & burn’ public services.. make everything users pays.. support the fortunate & put the boot into the less fortunate in society. We can’t all be millionares like some MPs or business owners.. but we are all kiwis & a more understanding tone should be fostered.. 2011 will hopefully be a change of power in Aotearoa.. Kia-ora

  14. “They’d have a much better chance if they could have a trial.”

    They could have such a ‘trial’ without the draconian legislation National has introduced.

    Good employee/employer relations doesn’t require dictatorial legislation to work.
    We can see that, you can’t.

  15. @Gerrit 11:44 AM

    I agree with you re your comments about the ageing population and the baby boomers retiring, but Brash’s suggestion isn’t a solution to the problem. Paying people a higher rate of NZ Super if they apply for it later doesn’t solve the fiscal problem created by fewer working age adults having to support a greater number of retirees. Essentially, it is fiscally neutral. A higher rate of tax on other income received by superannuitants would be a more effective way of addressing the issue imo.

    @photonz1 11:47 AM

    An increased churn in and out of employment by people with a marginal capacity for work, whether caused by increased hiring and firing due to trial periods or by work testing their benefits, will impact negatively on productivity, and therefore on wage levels. So much for closing the wage gap with Australia – these policies will do the exact opposite.

  16. robertguyton –

    If they can already ahve a trial as you claim, then you have no problem with trials?

  17. Photo. As usual never let the evidence get in the way of your ideology.
    Youth unemployment increased as did all semi skilled unemployment by the same amount with the recession. Youth rates do not increase overall youth employment as they just shift unemployment up a few years. Can give multitudes of references if you need them but I think your mind has already closed.
    How much does NACT pay you to blog here?

  18. toad – increased churn obviously has some higher costs but it is also haw well known and significant benefits.

    It means more workers find jobs they like and are good at, and employers find the happiest and most productive workers.

    Effectively increased churn means those workers who are not so good are replaced by better ones.

    The best workers rise up the ladder, and companies become more productive.

    There are some really big advantages of the trial scheme, like employers taking on MORE workers, and people on the margins getting MORE opportunities.

    It far more complex than the simplistic negative picture you paint.

  19. @photonz1 12:41 PM

    The best workers rise up the ladder, and companies become more productive.

    Only at the high skill, high income end of the labour market, photonz1. Churn among low-skilled, low income people with a marginal capacity for work is damaging to productivity.

    BTW, when do you sleep? Comments at 2:01 AM, 2:08 AM!!!

  20. Kerry Thomas – Youth rates massively spiked with a 10% increase in the quarter that youth rates were abolished.

    At the same time general unemployment rose 3% but spread over more than a year.

    And while general unemployment has started to come down, youth unemployment has stayed at all time record levels.

    Imagine you are an employer who is taking a big financial risk of taking on new workers.

    You have to pay the same for someone with experience and a good work record, as someone fresh from school with zero experience and zero work record.

    Who would you chose?

    Would you take a big punt on a riskier, less experienced person with no work record?.

    Or do you chose the person with the most experience and the best work record?

  21. toad – even at the lower end of the skill markets, churn means more poeple end up in jobs they are happy with, and are more productive at.

    There’s less holding posiitons they are not good at or don’t want.

    It’s more to do with the reasons for the churn – i.e. being able to take a chance on people who might be really good, and being able to get rid of people who aren’t.

    And sleep – what’s that? If there’s work to do, I’m at my computer.(though I do notice Greens generally seem to be early to sleep and early to rise – few late comments most nights)

  22. Photonz1-You describe a very depressing New Zealand culture. From what you suggest we have far more poor parents here than most other countries and a very dodgy untrustworthy workforce. You support a perceived need to drive down wages, workers rights and rip benefits of bad parents to sort things out. You also suggest employers are mostly trustworthy and don’t abuse weak employment law to maximise profits.

    The common denominator for most of those involved with our worst cases of child abuse and petty crime is poverty and lack of education. Surely it is through raising minimum wages, improving job security and making education more accessable that will make the most difference rather than punitive employment law.

    What has damaged our economy far more than a lazy untrustworthy workforce is the greed of big business: property developers who speculate with disregard of possible consequences; overseas banks that cream profits of New Zealanders and don’t pay taxes; and finance companies and advisors who gambled investors money for their own benefit and lied about their situations. The CEOs and managers in many cases accepted obscene salaries and bonuses that could have been better used raising the incomes of their low waged workers.

    A look at our housing should make it most obvious where the real excesses exist. We have a growing number of gated communities and homes that rival Hollywood and at the same time we have some of the poorest insulated homes in the OECD and huge numbers of struggling families living in conditions that are causing 3rd world illnesses.

    I guess it is easier to bash those on low wages and benefits because they probably don’t vote and it is useful to have a scapegoat that doesn’t have the knowledge or capacity to fight back. As for dodgy businesses and their CEOs and managers, the SFO has a hard time making cases stick and there is no real will to hit those who pay campaign funds.

    Photonz1-You are welcome to your employment philosophies and educational views, they just give me the heebie jeebies.

  23. YOU HAVE TO pay the same for someone with experience and a good work record as someone who doesn’t. Quack.

    People with decades of work experience should be paid the minimum wage. Quack.

  24. Actually Photo I prefer the new employee that I can train properly rather than one who has had work experience in a pretend apprenticeship, with someone else, sweeping floors while they fill in dumbed down course papers.
    It takes less than two weeks to find out if they have the two vital work skills. Interest in the job and willingness to learn.

    Obviously you look at different stats from the rest of us.
    http://www.dol.govt.nz/publications/lmr/youth/in-the-labour-market/youth2009-summary.pdf

  25. sprout – you attibute me with a whole lot of quantative opinions that I’ve nver made.

    You think making it HARDER to employ people, HARDER to remove useless workers, and HARDER to find the right ones will somehow improve the economy.

    The simple fact is, the easier you make it to employ the right people, the MORE you will increase total employment.

    The harder you make it for employers to employ people, the LESS people will be in work.

  26. Kia ora koutou, nice to see all the comments

    photonz1 refers to ‘a pimply faced teenager with no experience or work record MUST be paid the same as someone with decades of work experience.’ Wrong problem photononz1. If a person with decades of experience is being paid the minimum wage THAT is a genuine problem. The fact that the minimum wage applies regardless of age is not.

    And trial periods by agreement were already in place for employers to use, the new extension is coercive and bad for business. It will increase uncertainty and ill will in the workplace. It have a chilling effect on experienced people shifting jobs. Its destructive.

    Gerrit you complain about the miserly government budget – budgets are always about choices. The Nats choose unsustainable job-poor wealth transfers to the those with the most. The Greens rightly reject that. Our Green New Deal work http://www.greens.org.nz/gnd has genuine and sustainable job creation that doesn’t punish children.
    This attack on children is all about ideology and nothing about facts.

    All the available evidence shows that these measures don’t work and all the NZ assessment shows there is no correlation (let alone causation) between these policies and the intended outcome. Its absolute rubbish.
    mx

  27. Metiria Turei

    Thanks for your reply though you missed the gist of my comment.

    I’m not complaining about misery government budgets, just making the comment that the Greens want welfare to cover everyone but cannot produce a budget to where the taxation will come from to pay for it.

    Your Green Deal is full of promise and guidelines but very skinny on taxation to welfare cashflow.

    Simply stating in the Green Deal

    This second pack could create over 25,000 FTE jobs directly and a total of more than 50,000 FTE jobs altogether by investing $474.5 million over ten years in:

    *

    Forestry (jobs in rural areas, export industry, improved water quality)
    *

    Animal pest control (biodiversity gains, jobs in rural areas, expanded fur industry)
    *

    Wilding conifer control (Retains economic base to keep rural communities viable, protect biodiversity)

    All good stuff but where will you source the M$474.5??

    Increased taxation or will you cut existing government funding?

  28. Kerry – you keep going on about knowing what a worker is like in just two weeks.

    If you have no trial period, it doesn’t matter if you can tell what they are like after two minutes – if they’re no good it’s too late and they are your permanent employees.

    In many jobs two weeks is less than 10% into on the job training. If you can tell how people can perform in things they haven’t yet been trained in, how they will handle responsibility they have had yet, how they will handle stressful situations you’ve never seen them in, how they will handle personal relationships with other workers – then you must be an employment genius.

    With those skills you could start the first employment agency that gives a guarantee on workers.

  29. @robertguyton 6:37 PM

    “How much does NACT pay you to blog here”.

    I suspect very little, if anything, because the quality of the analysis from photonz1 is very poor. All spin, and no substance.

  30. Gerrit, if you want the detail then read past the summary.
    http://www.greens.org.nz/greennewdeal2

    What area would be afforested? 280,000 hectares over 10 years
    What forest types are expected? A mix of fast and slower growing plantation exotics, with a little indigenous
    How much carbon could this capture? 11.8 million tonnes CO2e over 10 years
    How much would it cost? No cost. The Government carries it as contingent liability.
    How many jobs could we expect this to create? Direct jobs estimated at 7700 FTE years over 10 years. Indirect jobs of an additional 7700 FTE years over 10 years Total jobs of 15,400 FTE years over ten years
    Will it produce any savings (increased efficiency, redirected spending etc)? Reduced carbon liability in 2020 and beyond. Ecosystem service benefits and saved costs to councils, landowners and government.
    Increased economic diversity, resilience and productivity generally
    Improved environmental conditions on farms and downstream
    What flow-on economic impacts would this have? Ecosystem service benefits and reduced public costs. Jobs in sustainable silviculture, harvesting and timber and wood products. More quality timber for local use and export. Less use of chemical treatments and fumigants with more hardwood available. More scenic and ecologically healthy landscapes for local communities and tourists to enjoy
    How quickly could it start? Immediately, but calculations assume a 2 year ramp up to full planting rates

  31. Metiria

    There will always be some jobs that pay the lowest (unless every job is paid exactly the same).

    Often a lot of experience may make a better worker, but it doesn’t necessarily mean that a low wage job – the likes of road workers, shop assistants, labourers, cleaners, garden maintenance, fast food workers etc – suddenly becomes a higher wage job.

    It’s a fact that some jobs will always be lowest paid no matter who is doing them.

    And it’s easy to work out who employers will choose given the choice between someone with a work record and experience compared to someone with neither.

    Metiria says “It have a chilling effect on experienced people shifting jobs.”

    The sky won’t fall in, just like it hasn’t fallen in with the current trial periods. (Where the sky HAS fallen in is youth unemployment)

    If trials are so bad, then it’s very strange that immigrant groups are applauding the move saying it will make it much easier for them to get work.

    And we have 40% of those employed under the trial period would not have been employed without it.

    And over three quarters taken on in a trail end up with a permanent job.

    Hardly sounds like the chilling, destructive picture you are painting.

  32. Photonz1, your youth unemployment scenario is not supported by the evidence.

    Significant increases in the youth minimum wage occured following reforms in 2001. The result, which you may find difficult to explain, given your neo-liberal ideology, was that the participation of young people in employment actually increased following the 2001 increase in the youth minimum wage.

    On that basis, I suggest that the explanation of the increase in youth unemployment in 2008-2009 is simply that the economy went into recession, and that the first people employers lay off and the last people they hire, in that circumstance, are young people with no little employment history.

    It’s all up to the recession, and the increase in the youth minimum wage had very little to do with it, from my perusal of the historical evidence.

  33. toad – the recesion certainly had a major impact and far more severe on youth than the general workforce.

    A senior lectuirer in economics at Canterbury University has analysed the data from youth unemployment and found a huge spike when youth rates came in – AFTER allowing for the normal multiplier effect, AND recesion.

    http://2.bp.blogspot.com/_StJkwRhDuIs/S29VOry6DYI/AAAAAAAAAMc/VYEclIvaWPQ/s1600-h/ue.JPG

    He found that since 1986, youth unemployment was very close to always being 1.44 time adult unemployment plus 9 percentage points. (i.e If adult unemployment is 10% then the multiplier effect means youth rates should be around 14.4% + 9% = 23.4%.)

    As you’ll see, youth rate have been close to this ratio of adult unemployment since 1986 – all until youth rate were abolished – see
    http://2.bp.blogspot.com/_StJkwRhDuIs/S29VgIWgTFI/AAAAAAAAAMk/LEquM0BKy5c/s1600-h/resid.JPG

  34. photonz1, you still haven’t refuted the Treasury report I referred to on the consequnces of the 2001 increase in the youth minimum wage – that revealed youth employment rates actually went up, rather than down, following those reforms.

    What do you have to say about that?

    I’ll admit that the causal link is equivocal, and different studies show different results.

    But you seem to hang on an ideological position that is not suported by the evidence.

    Tell me, photonz1, what happened in association with the 2001 youth minimum wage increases that resulted in the increased youth employment reported in the evidence from the Treasury and DoL research, rather than decreased youth employment that your hypothesis would predict to have occurred?

  35. Metiria Turia,

    The Greens had a cost of M$474.5 on the project (refer to your Green Deal reference). It is a cost that has to be found somewhere.

    You have not asnwered where the cost is to be sourced.

    Perhaps this from the Green Deal explains why

    When preparing its budget and costing policy the Government has access to a range of economic planning tools by virtue of being Government. The Green Party does not have this access. While we have used all means at our disposal to estimate the cost of the measures that we propose, and the number of jobs that we expect to create, these are approximations, as are any estimates of flow-on effects for the economy. We would expect that, if Government agreed to take up any of these measures, the Green Party would gain access to officials and other economic analysis resources to arrive at even more accurate assessments of the costs and benefits of these initiatives.

    So while you have commendable outcomes you still havent “found” (through taxation ot cutting existing state expenditure) the M$474.5 outlined as required in the Green Deal.

    Us public are cynical of politicians claiming huge benefits for a modest investment (only M$474.5) based on calculations you dont really know are accurate.

    If you cant get the budget right how do you know what benefits are achieveable?

  36. toad – I presume you mean 2001, when a few (on the surface contradictory) things happened
    – overall employment went up,
    – including youth employment.
    – overall UNemployment went down
    – BUT youth unemployment went UP (and even your linked report says this)
    – youth education went down.

    However there were no big moves in any direction by the statistics – changes were negligable (especially when compared to 2008)

    As you can see from the link to the second graph
    http://2.bp.blogspot.com/_StJkwRhDuIs/S29VgIWgTFI/AAAAAAAAAMk/LEquM0BKy5c/s1600-h/resid.JPG
    the relative multiplied rate of youth unemployment compared to general unemployment has stayed pretty much the same , including in 2001, until the huge spike that coincided with the abolition of youth rates.

    I suppose we’ll just have to wait until treasury does a proper study of it.

    In the meantime we have youth unemployment running at 25%.

    And pay rates that make it much more risky to employ them compared to someone a bit older (unless of course we could give them a 90 day trial)

  37. Well Photo I must be getting something right as everyone who I have employed beyond two weeks has done well for me and have gone on to become successful employees or employers elsewhere.

  38. photonz1 – I acknowledge there is a correlation in 2008. But correlation does not mean causation.

    If there were a causative relationship, you would expect there to have been a similar spike following 2001, when youth rates were abolished for 18 and 19 year olds and the youth minimum wage was increased for those aged 16 & 17. There was not.

  39. The Future Focus Bill, as well as acting those receiving the DPB also makes other changes, such as the removal of the Job Seeker Agreement betwenn W&I and someone on the Unemployment Beenfit. Combined with extending the 90-day job trial to all reasonable and unreasonable employers and W&I’s unlawful use of 13-week stand-downs when a job trialist is dismissed we have one mess approaching.
    Also, some members of Paula the Bene Basher’s taskforce see no need for a minimum wage for anyone as they claim this is a barrier to good folk who unfortunately can not get a job and thus getting a chnace in life and no longer being a bludger making life-style choices or some such rhetoric….. Unsuew whan such a policy initative will gain support from NACT but when it does I estimate wages for the most lowly will fall to about $6/hour gross – my maths simply divides the gross UB rate for those over 18 living away from home (184.87) by 30 hours (the legal definition of full-time). The Minister of Employment has not yet suggested this iniative as a way to close the incomes gap with Australia but I guess Sir Roger would support her if she did. Such a step may just satisfy those who want a balanced budget.

  40. Trying to support a couple of iwi teens as they try and get a job.
    What I can say is that there is almost nothing out there(make’s it hard to be encouraging, optimistic or supportive!).
    These kids are already doing it tough – some with no shoes, no food no home etc…..it’s hard to think how their lives might be made more difficult – but that won’t stop the gnats trying I suppose – we have the shipping containers ready!

  41. Kerry – what do you do at the two week point if they are no good?

    You’ve already given them a permanent contract from day one.

  42. Kerry sounds as though he’s a very good employer who can pick and retain good staff without needing punative legislation to fall back on.
    He makes photonz1’s clamouring for ‘the power to dismiss’ look like a personality fault.

  43. He must chose very carefully and rule out everybody on the margins.

    We still haven’t heard what he does if he finds someones not that good after two weeks (or two minutes) which is too late because a permanent contract is already in force.

  44. @photonz1 5:53 PM

    robert – more like the ultimate employer – absolutely perfect.

    Therein lies the biggest problem with your support for trial periods, photonz1. No employer is “absolutely perfect”.

    Employers make mistakes from time to time, just like everyone else does. So why should an employer be exempted from personal grievance proceedings if he or she makes a mistake that costs an enployee his or her job?

  45. robert – do you actually read the b/s you write?

    Take away the b/s – there’s nothing there.

    toad – it doesn’t cost them their job, if they don’t actually have a job. They have been given a trial – not a permananet job. You keep talking of trials as if they have the exactly the same rights as permanent workers.

    Under your scheme – employers have fully contracted workers into a permanent contract, before they have even seen five minutes work from them.

    Immigrants are depserate to get a chance for a trial – you want to kill off that chance for them and everybody else on the margins.

  46. photonz1, you are atempting to obfuscate and misdirect. Toad’s question was simple:

    Employers make mistakes from time to time, just like everyone else does. So why should an employer be exempted from personal grievance proceedings if he or she makes a mistake that costs an employee his or her job?

    Should an employer be exempted from personal grievance action if he or she has made a mistake that costs an employee his or her job? Yes, or no? And, if yes, why?

  47. Mr Guyton would be a great PM Piccy – that’d give ya the gripes now wouldn’t it?
    Essentially I like your post – kill off everybody’s chances, divide, divide and conquer….the people you love might not stay in office…

  48. frog – how difficult is it to understand that a trial for a job, is not a job with a permanent contract.

    It is in fact – surprise, surprise – just what the name suggests – a trial.

    And it has resulted in jobs that wouldn’t have otherwise existed, and people getting permanent contracts who would have otherwise been unemployed.

    Akmost all of the 20% whose trial didn’t lead to permanent work were because of poor performance or bad attitude. A small number were because they didn’t like the job and mutually agreed to leave. And a very small number were simply because economic conditions changed for the business.

    The other nearly 80% got permanent contracts.

    If it is so appallingly bad for workers, can you explain why immigrant groups think it’s a great idea?

  49. So let me get this right, photonz1:

    An employee on a trial makes a mistake, and the employee gets the sack.

    An employee on a trial doesn’t make a mistake, but the employer thinks s/he does, and the employee still gets the sack.

    An employee on a trial doesn’t make a mistake, but the employer thinks someone else who approaches him or her could do a better job, so the employee still gets the sack.

    An employee on a trial does really well, but someone knocks on the employer’s door that the employer rather fancies. So the employee gets the sack and the new applicant is employed and is about to be sexually harassed.

    Are you starting to get it, photonz1?

  50. toads system – the second someone starts working they have a permanent contract, even if they prove to be totally useless after their very first minute.

    Useless worker costs the business money, costs some other good worker a job, cost other workers pay rises, means other workers have to work harder to make up for them, makes NZ less efficient, and less productive.

    toads system – force businesses to hold onto useless workers even when they drag the company down.

    In your scenario, you also don’t seem to understand the real world of employing someone very well. On average it costs employers thousands of dollars and a lot of time to employ someone.

    You also seem to fail to understand that from an employers point of view, the WORST possible outcome for them from a trial is having to let someone go.

    This was made very clear in the DOL report.

  51. You still haven’t answered my question photonz1.

    Still obfuscating.

    Do you think any of the dismissal scenarios I have posed in my 9:24 PM comment are justified, and if so, which ones?

  52. toad – obfuscating – you mean like not answering why imigrants think the trials are a great idea?

    To be dismissed, first you’d have to have been given a job.

    If all you’ve been offered is a trial with no guarantee of employment at any stage, then you can be let go at any stage for any reason.

    Few employers want what they consider to be the worst possible outcome – letting someone go and going through the huge expense and time wasting excercies of going through the whole process of advertising, recruiting and training all over again.

    Your turn to answer – if the world will fall in because of trials (just like the ones that have been working very successfully) – why do immigrants think they are a really good idea?

  53. Amongst all the judgmental stuff about useless workers phutunz1 said “And it has resulted in jobs that wouldn’t have otherwise existed.” Perhaps. Evidence gentlesir – other than you of course.
    My understanding of the trials is trialist A can be used for 87 days, be told to try their luck with W&I, trialist B used for 87 days and told to go and reenrol with W&I, trialist C is teated similarly…… But I guess this is just a trialor (if such a word exists) using trials as the law permits. I wonder when the trialor is seen as an abuser though.

  54. Just read the about face Paula did regarding abatements. She promised changes both before the general elections and at the Wellington Employment Forum in 2009 that the change from $80 to $100 would occur. Broken promise that will worsen those on benefits looking for part-time work, and as folk probably realise, the way into a new job is from an existing one.
    A comment also on the distinction between long-term Sickness benes and Invalid Benefit recipients. It is the ability to work more than 15-hours a week in open employment constantly – not that their condition is necessarilly short-term.. The FF changes will cause harm as those with long-term conditions, but perhaps able to work some of time are targetted.
    And back with the 90 day trialists – not Met’s original topic but what the hell. It can affect any one, any job – even if it is with the same “good” employer as you have had for years – not just the youth or older unemployed returning to paid work.

  55. Yes, Graham, clearly a broken promise. National’s pre-election policy stated:

    Allow beneficiaries to earn up to $100 a week before their benefit is affected
    Beneficiaries, and/or their partners, can currently earn up to $80 a week ($4,160 a year) before the level of their benefit is affected. This threshold has remained unchanged since 1996. Above $80 a week, people on the DPB and IB have their benefits abated at 30% for a time, then 70%. People on other benefits go straight to a 70% abatement. After paying tax on their extra income, and losing part of their benefit, beneficiaries can be in a position where they are losing up to 92 cents of every additional dollar they earn. This is a disincentive for people to work even a few hours a week.

    In 2006, only 38,000 of the 280,000 people on a main benefit reported earning $80 a week or more. The biggest group of beneficiaries that reported earning other income were people on the DPB.

    National will raise this threshold to $100 a week. This will help to encourage work wherever possible. It is an extra incentive for people to dip their toes into the labour market. Raising the earnings threshold gives beneficiaries an additional incentive to work a few hours a week, to get into the work habit, to gain some confidence, and to start building up some work skills. That is an important step in the progression towards full-time work.

    At or just above the minimum wage, a person could work for a day a week and not have their benefit affected.

  56. Graham – did you not follow the story when it was top of the news?

    Of the employers who used the trial, the Department of Labour suvey found 40% of employers would not have employed people without it. (see link below P 24)

    A big problem from an employers point of view is that you’re worried about taking on more staff because of the huge financial risk, and not being able to get rid of someone if they are no good.

    So a trial removes one of the largest barriers to employing people. It’s obvious that trials will mean jobs where they wouldn’t have otherwise existed. (I have a very small business but would never have employed anyone without a trial – ditto with most other small business owners I know).

    Why would a company take on lots of successive people in trails, when it was clear from the survey that someone not getting a permanent contract at the end of the trial was the WORST possible outcome for employers.

    Taking on someone new on average costs thousands of dollars in advertising, recruiting, interviewing and training, and is a huge waste of time.

    Why would a business go to all that trouble, spend thousands of dollars, and start induction and training back at zero again, all for no reason?

    DOL survey, P24 –
    http://www.dol.govt.nz/publications/research/trial-periods/trial-periods-evaluation.pdf

  57. Graham – how can a 90 day trial, (to use your quote) “affect any one, any job – even if it is with the same “good” employer as you have had for years ”

    – when it is only for NEW employees who have NEVER previously worked for an employer.

    Sounds like youre making false stuff up to try to frighten people into thinking it’s something it’s not.

  58. “”We still haven’t heard what he does if he finds someones not that good after two weeks (or two minutes) which is too late because a permanent contract is already in force””.
    It is simple you just write into the contract a fair trial period where either can part company for any fair reason. Called a probation period in law as Toad pointed out. Only had to use it on one person who was into tinnies. I would have been able to summarily dismiss him anyway at any time for drug taking.
    The only ones who need 90 day periods to get rid of employees are dodgy employers. Get the point!

  59. Phutunz1, so I am to believe a por quality peice of researxch from the Dept of Lavbour re the job creation aspects of the trial scheme am I. I prefer something with more academic rigour.
    And many ways the trial scheme can be abused. But I guess phutunz may never come acorss abusive employers as a class of being. While the legislation is yet to be drafted I would be surprised if it did not allow for employers of places of more than 20-employees to re-structure and then having appointees to “new” positions “trialling” in the position, and if not acceptable, then what…. And then we have the situation of tasks being contracted out, such as hospital cleaning, with a new contractor taking on existing staff for a “trial” period. But of course such actions could be said to be abusive… and of course we have few such gentlesirs in NZ….do we, gentlesirs.
    I recall one Gerry Brownlee, when on the Select Committee hearing submissions on the Employment Contract Bill stating that he did not believe the EC Bill (to become the ECA) would create employmenrt scenarios being painted by those opposed to the Bill because such poor employers were few and far between. Evidence shows that when permitted the dregs soon make their pressence felt, and some decent bosses follow because they beleive they need to to remain competitive.
    Roll on the removal of the minimum wage…… I am sure Sir Roger’s mates want it, eh phutunz.

  60. Kerry – if you summarily dismissed someone for drug taking, even in a probationary period, they would have been dismissed unfairly and you would lose any case they took.

    You can’t just “summarily dismiss” someone under a probation period – you have to give go though a long process first.

    Under a probation period, first you are legally required to
    – provide training and assistance to correct the problem
    – provide time and opportunity to improve
    – review performance during that time and give feedback on performance

    If all this fails, THEN you can give a warning, which will have to be documented.

    If this still fails, then you are required to have FACTUAL EVIDENCE of the problem.

    Even then, you still can’t dismiss. The worker has a right to see the factual evidence.

    But you still can’t dismiss yet. You have to give the worker reasonable time to consider the information and to make a response.

    If the response contains ANY new information, you can’t dismiss. It has to be fully investigated.

    If a similar thing has happened in the past with any other worker, and they haven’t been sacked, then you have set a precident and you can’t sack anyone for the same thing.

    So if you have “sumarily dismissed” someone for drug taking you’ve missed about ten steps that you legally have to undertake. Without all these processes (and this is just for probation periods), then you’d be absolutely screwed in the employment court and you’d be handing over several thousand dollars to your druggie for unfair dismissal.

    One company lost a case in the employment court for sacking a worker for drug dealing at work. They had a zero tollerance policy for drug use, but because they did not have a specific policy against drug “DEALING”, the dismissal was ruled unfair, and the company had to pay out to the drug dealer.

  61. Workers should not be given assistance or opportunity to improve. Quack.

    Employers should be able to dismiss workers on suspicion of drug taking and shouldn’t have to have any evidence. Quack.

  62. Photo.
    You have just proven you don’t know what the hell you are talking about.

    The law allows for summary dismissal for endangering other workers (drug taking on a ship, oil rig or building site), stealing, falsifying cv’s etc. It is to dangerous in the type of work we do to have someone on drugs.

    You have to have proof but it is pretty hard for someone to argue when he is seen by several of your staff.
    You would also have the grounds for instant dismissal written into your contracts for things that are important to the job.
    Employment court case law has upheld dismissals for these reasons. Even an accident chasing lawyer will not take a case to court he has no chance of winning.

  63. Solkta.
    Normally I would agree with you that employees should be given an opportunity to improve, but some things like someone who is violent to others or spaced out are just too much of a hazard in some jobs.

  64. Kerry, yes I agree that some work places are so dangerous that intoxication cannot be tolerated, even once. Though as you say this would be made clear in the contract. I had taken photo’s comments in context of his other posts.

  65. Kerry – I just listed the Department of Labours legal requirements.

    Perhaps you need to complain to the Department of Labour that their published processes are completely wrong and they “don’t know what the hell [they] are talking about”.

    I don’t think “you don’t know what the hell you are talking about” would work as a defence in the employment court when they list all the legally reqired steps you’ve missed.

    And then you completely miss the point anyway.

    Yes – the dismissal was completely warranted.

    But the process was unfair, so the dismissed employee is due a payout.

  66. Kerry – exactly what you did – dismiss someone summarily for drug use – even with witnesses – is the EXAMPLE given by the Department of Labour of what CAN’T be done.

    Allegations from other staff is not considered proof.

    In fact it sounds like you didn’t take a single one of the steps you are required to take.

  67. Just as a matter of interest for those who may want to watch, the Future Focus Bill is up in Parliament for Second Reading debate this afternoon – probably about 3pm.

  68. Kerry – your statement “I would have been able to summarily dismiss him anyway at any time for drug taking.”

    Is completely wrong.

    What you have described – dismissing someone because colleagues have witnessed drug use – is exactly the Department of Labour example of what employers legally CAN’T do.

  69. Debate over employment law is interesting, but mean-time the FF Bill looks like it is through – broken promises and all.
    I looked for the Bills based on JK’s announcements to his mates at their conference and coulsd not find anything about the extension to the 90-day trial stuff…..hence wonder about Phutunz’s comment that “it is only for NEW employees who have NEVER previously worked for an employer”. (I think Phutunz means “THAT employer before”… rather than “an employer” cuaae that would mean it was only for those who had never worked before…in which damned few homo-sapiens would be affected. If it is any employer, my or in fact a new position by ealier claims apply….)
    But I am intreged…does Phutunz know something I don’t…. is it a leak…is he in a 90-day trial period…. and to quote antoher, “if so, quack” – (or have I simply failed to find the Bill…. in which case quack ME.)
    If the 90-trial for all reasonable and unreasonable employers is going to be anything like the employment programmes of the 1990s we will have a mess and abuse as danger signs are evident for those recently trialed.
    In the 1990s I am aware of
    “Agents” for contractors offering jobs for meat and bread and the dole…(don’t bother getting off the dole mate…wink, wink
    And the oh-so decent employer (quack)I discovered using the wage-subsidy scheme to employ a NEW employee… only to find another NEW employee doing the same work…same employer….a few months later with a new subsidy…and how many times did I personally witness NEW employees with this employer…. Well it went on for 18 months until my complaints saw a change in behaviour from the public servant administering the scheme.
    A genuine question: Phutunz, have you seen the draft Bill? If so, can you swear it is only for people never employed before, is it that they never been employed by a particular person…..

  70. Graham – I’m not sure if you’re deliberately misreading my comments.

    If you have any interest in this issue, then you’ll be totally aware that an employer cannot cannot offer an employer a trial if they have worked for then before (but then you weren’t aware of the headlines from the DoL report, so maybe this isn’t an issue you’ve taken much notice of?)

    So obviously when I talk about an employee who has never worked for an employer before, I’m talking about the one offering them the trial.

  71. Phutunz…. less haste, as to quote “If you have any interest in this issue, then you’ll be totally aware that an employer cannot cannot offer an employer a trial if they have worked for then before” Employers offering employers what exactly. The law is too loosely written…
    It is a new position in reality. If I worked for X in 2008, then left, X could trial me in 2010.
    If I worked for Z’s compacy ABC Ltd in July 2010, Z restructedf and Z now employed me via companny BAC Ltd in August 2010 then in law we have a new employer….. hence trial very probable. So, unless you can cite the section in the LAW disputing my supposition I will maintain my stance.
    As for interest in the issue I am too busy with more immediate issues relating people and their inadequate income but I suspect I will have plenty of real live abuses in the weeks to come around this issue that will dispute your lofty interpretation of reasonable employers,,,(but I suspect by then interest will have waned).

  72. Graham – you are expecting “plenty of real live abuses in the weeks to come around this issue”.

    Is this because seen lots of real live abuses over the last year with trial periods?

  73. Phutunz1 and others – apologies for non response over weekend, I have no computer at home – but sadly I do expectplenty of abuses by reasonable and unreasonable employers as well as misinterpretations of the law by W&I. In recent history the Work 4 Dole scheme (Peter McCardle NZF 1996-9) is the closest in terms of the triangle of obligations, rights. and responsibilities between job-seekers, W&I and employers and there were large numbers of abuses then. The 90-day trial scheme for employers of fewer than 20-people threw up a lot of what the employees/trialists would say were abuses and as I mentioned some blogs ago, W&I were putting failed trialists on 13-week stabd-downs even though section 60H of the Socxial Security Act expreswly said this was to happen.
    I have already claimed the Dept of Labour survey into the 90-day trial system lacks rigour in its methodology. The only real way to know jobs were created that would have otherwise not been is for the employers to have been surveyed befre the trial.
    Asking something like: “Are you considering creating a new job?” If the answer was “No” and then the trial was used and the business generated from the trialist justified a new full-time position filled by someone (trialist or not) then you could defend the claim the trial was the reason for the new position. Otherwise claims from the employers are dubious from an academic point-of-view……

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