NZ changes ‘didn’t deliver worker prosperity’

Helen Kelly speaks with a delegate during Annual Conference.

by Kerri Carr

Changes to industrial laws in New Zealand did not deliver prosperity for workers, New Zealand Council of Trade Unions vice president Helen Kelly told Federation annual conference on July 3.

"From 1985 to 1999 the social and economic structure of New Zealand was torn apart and replaced by a new order," Ms Kelly said.

"The changes were an almost pure application of conventional New Right ideology, described in a quote used by the OECD as one of the most notable episodes of liberalisation that history has to offer."

Ms Kelly said that for 15 years New Zealand and its people experimented to see whether the ideology of individualism and the market would bring wealth and prosperity to a tiny Pacific nation of four million people.

"The message is clear it did not work," she said.

"They didn't work to build a decent society and they also didn't work to being about the economic miracle that was promised.

"The experiment left a long legacy some things were done that cannot be undone.

"A whole generation of children grew up in poverty."

Ms Kelly said the legacy continues in income distribution and poverty.

"Between 1984-1998 the bottom 50 per cent of households decreased their income by 14 per cent while the top 10 per cent increased their income by 43 per cent."

"Can you imagine that over 14 years?" Ms Kelly asked.

She said a Treasury study has found that 90 per cent of New Zealanders were worse off now than they were in 1981.

"Probably the most important part of the New Right package was the industrial relations reform," Ms Kelly said.

"The New Zealand law was extreme contract law."

Ms Kelly said the law was criticised by the International Labour Organisation (ILO) as in breach of conventions. She said a New Zealand National Party politician has told her they don't care about the ILO.

"It was intended as an attack on unions, as the Howard laws are," Ms Kelly said.

"Couched in the language of freedom, neutrality and choice the New Right's policies on the labour market had the real intent of empowering management, and deunionising the workforce.

"The impact on unions was harsh and fast," she said.

"One major private sector union lost half its membership in only one year and at the same time went from the negotiating a total of 49 agreements to over 600 with half the staff."

Ms Kelly said that now only 21.3 per cent of workers in New Zealand are covered by collective agreements; only 10 per cent of private sector workers.

"The results of a weak union movement can be seen in wages growth, despite an overall shortage of labour and strong economic growth," Ms Kelly said.

"The one economic figure that is not increasing in wages," she added.

"Private sector ordinary time wage rates rose just 2.2 per cent in the June 2004 year. Public sector ordinary wage time wages rose by 2.6 per cent in the June 2004 year. Unemployment is down to four per cent which is the lowest rate for 20 years."

Real hourly wages in the period 1980-2001 in New Zealand declined 6.5 per cent.

"Image if you were still earning 1980 wages," Ms Kelly added.

"One of the main arguments for the terrible employment law was to promote efficiency in the labour market, in other words to improve labour productivity," Ms Kelly said.

"In this regard it was a spectacular failure.

"There was zero growth for about six years from 1986 to 1992.

"In terms of gross domestic product per capita, New Zealand fell from being ranked 4th in the OECD in 1960 to 15th in 1993 and we have kept sliding. We're now at about 20th, although recently we have had very good economic growth in OECD terms," Ms Kelly added.

©2000-2002 NSWTF Online is a resource for teachers
provided by the NSW Teachers Federation.
[Authorisation of election comment] [Privacy]

http://www.nswtf.org.au/journal_extras/newz.html
Last Modified: 15 Nov 2005