Cunliffe kowtows to unions at expense of NZ economy

Labour Party leadership hopeful David Cunliffe’s promise to expand Part 6A of the Employment Relations Act to all workers would be a massive change to New Zealand’s employment laws and would have an immediate and negative impact on productivity and competition in New Zealand, ACT Leader John Banks said today.

“Part 6A of the Employment Relations Act currently forces companies who win a contract to employ all of the staff of the previous contractor,” Mr Banks said. 

“Right now it only applies to a few industries deemed to have ‘vulnerable’ workers but David Cunliffe’s proposal would expand this clause to cover all workers.  

“This is bad news for freedom of contract, workers in the business that win the contract, the customers of successful businesses and competition. 

“A business cannot increase its productivity and be competitive if it is forced to take on previous staff, who may not have been performing.  The firm’s ability to perform the contract is reduced which harms their customers and puts all of their employees’ jobs at greater risk. 

“In effect this clause protects poor performing businesses and makes it harder for new businesses to enter the market.    It also hurts employees because new workers who could have been hired are not.

“Expanding this clause would see productivity reduced, incomes reduced and a reduction in the ability of the economy to generate jobs. 

“By making this promise, David Cunliffe has shown that union demands are more important to him than what is best for New Zealanders.  A Government led by him would be a very scary prospect for New Zealanders and business in particular,” Mr Banks said.



Freshwater reform 2013 and beyond

Freshwater is a vital component of human life and our economy. The management of the freshwater resource is therefore very important but as knowledge about freshwater evolves that management must adjust to avoid unnecessary scarcity or quality problems.

A key part of management is to oversee systems that efficiently allocate freshwater, avoiding the waste associated with both under- and over-exploitation. It is very important to get these systems right.

ACT acknowledges the valuable work undertaken by the Land and Water Reform on these issues, particularly in respect of its examination of the case for tradable rights or consents and the desirable design features of such a mechanism.

ACT's April 2013 submission on the government discussion document: Improving our resource management system stressed the value, environmentally and otherwise, of a system of well-defined and well-enforced property rights for resolving disputes over the allocation of natural and physical resources and maximising the well-being of people and communities.

That submission explained why government interventions of a specific nature might be desirable in situations of a public good character, but such interventions needed to be respectful of private property rights. The RMA differed markedly from the Public Works Act in that respect.

Another problem with the RMA that this submission identified was the failure of its purpose statement to clarify whether the purpose was to improve the well-being of people in their community, or to sacrifice it to some other cause.

This submission on the government's March 2013 discussion document, Freshwater reform 2013 and beyond is largely supportive of the approach taken in this document, yet finds the same issues potentially arising to a significant degree.

Read ACT's freshwater submission here 500.72 KB

Auckland's Unitary Plan won't make a jot of difference to housing affordability

It doesn't matter whether the Unitary Plan allows for relatively intensified development inside the Rural Urban Boundary, or greenfield developments outside of it, aka subdivisions. 

That is because the problem Auckland has at its core is anti-development legislation - the Resource Management ACT (RMA).

It isn't right when developments in Long Bay, for example, take 18 years to get off the ground and can be held up by people living in the Coromandel.

The RMA came into effect in 1991. 

At that time the ratio of median house price to median income was around 3 to 1. 

That means before the RMA, a median house price was $300,000 and the median household income was $100,000.  That's easily affordable. 

Today it is almost 6 to 1. 

Even if median incomes moved to $150,000 (which they haven't), median house prices have increased to $750,000.  That's quite unaffordable.

It takes too long to build a house in Auckland, and it costs too much.

The RMA has created the situation in Auckland where perfectly responsible developments are opposed and delayed to the extent that, if they ever get off the ground, the extra costs have pushed up the price of the final product.  It has made housing unaffordable, and created a crisis.

It is therefore irrelevant what the Unitary Plan says about where properties can be built, and what land can be developed. 

Unless the RMA is dramatically reformed to create a presumption of development and a restriction on the opposition to developments, the Unitary Plan will mean nothing. 

And that is because people in Coromandel will still be permitted to oppose, and thereby delay, developments in Auckland.

Author of this blog post, Nick Kearney, is the Local Board Member for the Kaipatiki Ward. 

The inner Waitemata Harbour suburbs of Beach Haven, Birkenhead, Chatswood, Birkdale, Northcote Peninsula, Glenfield, Hillcrest and Marlborough make up the Kaipātiki local board area. It is bounded by the Northern Motorway to the east.



Nathan Guy Must Stop Making Excuses And Do Something

Primary Industries Minister Nathan Guy is looking for excuses to justify his inaction amid growing calls by kiwifruit growers that the industry needs an independent inquiry, ACT New Zealand Primary Industries Spokesman Don Nicolson said today.

“Initially the Minister said he wouldn’t initiate an inquiry because Zespri was before the Courts on a charge of smuggling.

“Now that Zespri has been found guilty, he is using the excuse that an internal inquiry is already taking place and there is no need for the Government to step in.

“But growers who have contacted ACT do not have any faith in the internal inquiry,” Mr Nicolson said.

“New Zealand Kiwifruit Growers Incorporated (NZKGI), which is charged with conducting the inquiry, is the very organisation that commissioned the 2007 Grant Samuel Report into Zespri and then suppressed it because it was unfavourable.

“What has changed in NZKGI since then?

“NZKGI has no credibility when it comes to conducting an independent inquiry into Zespri.  The report won’t be worth the paper it is written on.

“The Minister’s continued position of doing nothing is unacceptable.  By failing to take action, the Minister appears to be sanctioning Zespri's poor business behaviour that threatens our reputation.
“Kiwifruit is big business for New Zealand and our reputation relies on Zespri acting as a good corporate citizen.  If its reputation is damaged our entire industry will suffer.

“The Government forces all growers to export through Zespri.  It is therefore the Government’s responsibility to ensure that Zespri’s operations are above board.   Initiating an independent inquiry is the only way the Government can do this,” Mr Nicolson said.



Include small franchisees in Part 6A exemption says ACT

ACT Leader John Banks today called on National to change the Employment Relations Amendment Bill to ensure small franchisees are exempt from Part 6A of the Employment Relations Act.

“Franchisees are legally and financially separate business to their franchisors – they are not joint ventures, related entities or partnerships.   They do not share in each other’s profits and they file their own GST, PAYE and tax returns,” Mr Banks said.

“ACT believes franchisees with 19 or fewer employees should be treated as small to medium enterprises for the purposes of the Part 6A exemption.

“Part 6A puts jobs and firms at risk as it forces businesses who win a new contract in the cleaning and catering industries to take on staff employed by the previous contractor.  

“How can a business be competitive and increase productivity if they are forced to take on previous staff, who may not have been performing the job well?   The firm’s ability to perform the contract is reduced, putting all the workers’ jobs at greater risk. 

“Also one worker’s gain is another worker’s loss.  Workers who could have been hired are not hired.  

“Productivity is reduced.  Incomes are reduced.  The ability of the economy to generate jobs is reduced.

“ACT wanted National to dump Part 6A altogether.  National instead decided to exempt small businesses.  Currently, franchisees fall outside of the definition of a small business. 

 “ACT does not believe it is fair to group all franchisees within a franchise together for the purposes of the Part 6A exemption.   They should be treated as independent small business owners, just the same as non-franchised businesses with 19 or fewer staff.

“To treat these businesses differently is inequitable and unfairly penalises would-be workers and franchisees while giving non-franchisees a competitive advantage.

 “This must be changed,” Mr Banks said.



Kiwifruit Collaboration Arrangements ‘Most Likely Illegal’ In International Markets

Claims by former senior personnel of Turners and Growers that Kiwifruit New Zealand’ s application process for Collaborative Marketing Arrangements (CMA) with Zespri is ‘farcical’ and ‘lacks openness, fairness and integrity’ is further indication that all is not well in the kiwifruit industry, ACT New Zealand Associate Primary Industries Spokesman  Robin Grieve said today.

 Former Turners and Growers development manager, Murray Malone, and  former Managing Director of Turners and Growers, Jeff Wesley, told rural newspaper ‘Straight Furrow’ that New Zealand’s collaborative arrangements could be seen as collusion in the eyes of international trade. 

They say, under the CMA process growers are ‘forced to collude with Zespri to fix price and to dominate market position.’  While not illegal in New Zealand, this is ‘most likely illegal in some of the target markets in which the fruit is sold including China’.

“Growers in the kiwifruit industry have faced big challenges over recent times and it is imperative that their financial returns are not compromised by an inefficient and dysfunctional marketing system which has the government’s fingerprints all over it,” Mr Grieve said.

“The government imposed a monopolistic marketing system on the industry and then just walked away, leaving Zespri without proper oversight.   Now the problems are piling up.

“Without the option to take their business elsewhere growers are trapped.   It is time the government, which denied growers the freedom to sell their produce elsewhere, takes its obligations more seriously.   

“ACT has been calling on Minister Nathan Guy to launch an independent inquiry into Zespri since it was convicted in China for smuggling.  Yesterday, ACT called for the potential inquiry to include claims by growers that they are subjected to bullying and secrecy by the company. 

“The Minister owes it to growers to initiate an inquiry to ensure his regulations are not propping up a marketing system that is costing growers’ money and possibly forcing them to act illegally,” Mr Grieve said.








Minister Can No Longer Ignore Calls For An Inquiry Into Zespri

Primary industries Minister Nathan Guy cannot continue to ignore the damning claims of bullying, secrecy and unacceptable behaviour from concerned growers who are forced by the Government to supply their produce to monopoly exporter Zespri, ACT New Zealand Associate Primary industries Spokesman Robin Grieve said today.

“ACT has been calling on the Government to initiate an independent inquiry into Zespri’s activities after it was convicted of smuggling in China.   ACT now wants the inquiry broadened to look into concerns expressed by growers about the lack of transparency and intimidation by Zespri,” Mr Grieve said.

“A One News story over the weekend revealed the growing discontent among growers concerned with Zespri’s behaviour.   A number of growers were too afraid to appear on camera but told One News they are so appalled with Zespri’s conduct they would no longer deal with Zespri if they had the choice.

 “Zespri Board candidate, Tom Wilson, confirmed their claims saying people are ‘reluctant to stand up and voice their genuine concerns’ as the ‘Zespri PR network can destroy people’.  He says Zespri’s culture is arrogant, self-serving and needs to change.  

“ACT opposes monopolies - especially government mandated ones - because they generally become bloated, inefficient, and lazy.  ACT believes it is Zespri’s monopoly status and lack of proper oversight that has caused the current problems.   They are a monopoly out of control.

"It’s time for the Minister to listen and take action by launching an independent inquiry. 

“The inquiry currently being undertaken by New Zealand Kiwifruit Growers Incorporated is not independent and therefore the validity of any findings is compromised. 

 “Growers need an assurance that they are doing business with a reputable company.  At the moment there is no way they can find out.  Growers who question Zespri appear to be stonewalled and faced with intimidation if they speak out.

“The Government is responsible for how the kiwifruit industry is set up.   It is the Government’s responsibility to get to the bottom of this issue,” Mr Grieve said. 


Labour’s Limit On Share Fund Size Intrudes On Shareholders’ Rights

ACT New Zealand will not support Labour MP Damien O’Connor’s Dairy Industry Restructuring Amendment Bill (No2), ACT New Zealand Primary Industries Spokesman Don Nicolson said today.

The Bill would limit the proportion of Fonterra co-operative shares that can be held in its shareholders fund to 20 per cent of Fonterra’s share total.

“Legislating tighter limits on the size of the fund is an unnecessary intrusion into the rights and interests of shareholders to determine the destiny of their own company,” Mr Nicolson said.

“Fonterra has sufficient constitutional safeguards and mechanisms for representation and communication to allow shareholders to determine the size of the  fund.   Shareholders are more than capable of doing this without interference from Government.

“ACT believes the Government’s regulatory involvement with Fonterra should be limited to ensuring that the supply and sale of milk and milk products within New Zealand are open to competition.
“Fonterra is the world’s largest exporter of dairy produce and New Zealand’s largest company.  It competes in an ever-changing world and needs to be able to respond to changing circumstances and continue to evolve as a company for the benefit of its shareholders.

“Excessive and unnecessary government involvement will only hinder its ability to do this,” Mr Nicolson said.


Banks backs convention centre for Auckland

The Sky City Convention Centre proposal is a good deal for taxpayers and Auckland ratepayers and has my support, ACT Leader John Banks said today.

“Auckland is an international city and needs a world class convention venue.  But running a convention centre is an economically tough and risky business,” Mr Banks said. 

“Globally, taxpayer or ratepayer-owned convention centres often run at a substantial loss and attract on-going subsidies.

“It is essential that any convention centre proposal is taken forward by a seasoned operator that can compete in the highly competitive entertainment industry. 

"It is also important that it is the operator that carries the risk, and not the taxpayer or Auckland ratepayer.   The Sky City proposal satisfies both those requirements. 

"I also support this deal because it does more to protect the few gamblers who cannot control their behaviour.  I acknowledge there is only so much that can be done to protect people from themselves.   In the end it’s up to individuals to take personal reasonability for their actions.  However, the proposal  introduces systems to allow data to be analysed for problem gamblers and ups the host responsibility monitoring to 24/7.

"I am satisfied that the regulatory concessions in the Convention Centre  proposal are both necessary and reasonable in the circumstances. I will be supporting any necessary legislation," Mr Banks said. 


More Questions Raised About Zespri's Operations

Zespri’s apparent bad administration in China raises serious questions about their operations and reinforces the call that kiwifruit growers should be free to sell their products to customers and exporters of their choice, ACT New Zealand Primary Industry Spokesman Don Nicolson said today.

Zespri Management Consulting Corporation and one of its employees have recently been found guilty in a Shanghai Court of false customs declaration.

“If this is what has been allowed to happen in China, what confidence can growers have that this isn’t happening in Zespri’s other markets?” Mr Nicolson said.

“In November 2011, Zespri was fined in Korea for anti-competitive behaviour in the Korean market.  Just this weekend the New Zealand Herald revealed that Zespri has a serious employment issue with their highest paid offshore executive. Now rural newspaper, Straight Furrow, has revealed Zespri may be involved in transfer pricing.

“The full cost of management and governance oversight is borne entirely by growers, therefore growers need confidence that Zespri’s processes are rock solid. With all these issues coming to light, growers will be wondering, how much worse is it going to get?

“Ultimately, ACT would like to amend the Kiwifruit Industry Restructuring Act 1999 so that growers can sell their products to the customers and countries of their choice.  But in the interim, the government as authors of Zespri’s enabling legislation must launch an inquiry into this developing fiasco,” Mr Nicolson said.