Speech: Jobs That Work For You

David Shearer

18 October 2012, Hornby Working Men’s Club

Last week, I received a very special Facebook message.

It came from Kathy Rolfe. She lives in Invercargill and wanted to tell me how worried she is that the Tiwai Smelter will close.

Her grandfather helped build the smelter. Her father works for a company that could be affected if Tiwai Point shuts down.

She told me “the most horrible part of it is that people will lose their jobs and have no money for their families”.

Kathy is 12 years old and she gets it.

Job losses hurt. They affect families, businesses and communities.

There are people like Kathy all over the country – in Huntly where Solid Energy is cutting 120 jobs, or Greymouth where the Spring Creek Mine is closing, or in Kawerau where the paper mill is shutting down.

They’re worried about the future of their communities. Because without jobs , the heart of a community is lost.

That’s why I’m here today. To talk about jobs.

Good jobs. Skilled jobs. Jobs that pay well.

Jobs that keep our best and brightest in New Zealand.

It’s a lack of well-paid jobs that is sending 1000 Kiwis a week to Australia for better wages.

People are working harder than ever for less than ever before.

I’m constantly told by people they are working harder than ever before, but can’t seem to get ahead or just keep their head above water.

They’re right. Over the past three years median wages have gone backwards by almost $13 a week once you take into account rising prices.

Meanwhile, household incomes for the top 10% have done very well, increasing their income by $2,000 a year.

The gap between the rich and the rest of NZ has never been wider – and it’s growing.

That’s not right. Kiwis understand that it is not just a financial divide. It’s about fairness and opportunity.

It goes against that most basic of New Zealand values: that no matter where you’re from there’ll be opportunities for you to make a better life.

Why are jobs important?

When it comes to opportunities, it’s all about jobs. There is no challenge more urgent than addressing the lack of decent jobs available.

Jobs matter. And it’s not only about whether you’re earning enough to pay the bills.

It’s because they say so much about you.

Often, when you meet a person one of the first things you’ll find out about them is what they do for a crust.

It’s more than just a weekly wage.

It’s about recognising that what you choose to do with your life matters. It matters to you, your family and your community.

It’s through your job that you’re able to realise your ambitions and give your kids a decent start in life.

It’s a sense of identity and a source of dignity.

That was the message I got from the Spring Creek miners. They’re proud of the work they do.

They’re rightfully proud of the families they’re able to support and the communities they’ve built.

I value hard work, the feeling of a job well done and the life that leads to.

These are New Zealand values. They’re the values that made our standard of living one of the best in the world. They are the values that build opportunities in the future.

That’s why Labour has always stood for jobs.

It’s why Labour fights for the opportunity of a decent job, not just any old job.

That’s why the next Labour government will stand right beside businesses and workers to create better jobs and higher incomes.

Everyone has a part to play. That includes government.

For a country of only 4 million to compete against countries 10 or 100 times larger than us, the government needs to be a player, not a spectator.

That’s at the heart of the fundamental difference between National and Labour.

That’s where our two philosophies diverge.

Two Paths

Today, there are two paths in front of us.

One is the path we have been walking for the last four years.

It’s a path that accepts second best as good enough. It’s one that manages NZ’s decline rather than builds a future.

It’s a path in which Kiwis feel increasingly trapped – trapped in a job that doesn’t pay enough, trapped by unexpected bills, trapped by a lack of opportunity and a stagnant economy.

Prices keep going up but for most New Zealanders wages aren’t keeping pace.

Many of us worry about whether our kids will be ever able to buy a house.

Instead we’re seeing them seek better opportunities in Australia.

This is National’s path – it’s a path to fewer jobs, lower wages and our kids living across the ditch.

National’s attitude is that we just have to accept this future.

But we are four years on from the start of the global financial crisis.

New Zealand was not hit as hard as some other countries because we were well prepared.

Labour ran 9 years of surpluses and paid off government debt.

We brought unemployment to the lowest level in a generation.

So NZ should be starting to turn the corner by now. Instead, things are getting tougher.

John Key and his government are hands off when they need to be hands on.

Instead of focussing on jobs, they’re focussed on selling off New Zealand.

They’re happy to simply stand back and hope things get better.

I call it ostrich economics. Putting their heads in the sand and pretending there’s no problem, that it can fix itself.

It’s disappointing when John Key said he would stop people leaving for Australia, but instead he’s setting new records for exporting Kiwis.

It’s disappointing that John Key promised a brighter future, but when you ask yourself if you’re better off than you were four years ago, you have to answer no.

For me, that’s simply not good enough.

I want to take New Zealand down a very different path.

A pathway to a new economy that leads to a high wage, high skilled future.

One that’s about being a confident, proud New Zealand. Not one that makes excuses for why we’re not doing well.

It’s a path that recognises you can’t fix poverty without creating jobs. And you can’t solve growing inequality without decent jobs.

It’s a path where government gets alongside workers, businesses and our heartland communities to help them grow.

Where we are patriotic, trust in our ability to get ahead, and beat the odds, as we have done in the past.

To succeed the government needs to be a partner, a player in the game.

Getting the big picture right

That starts by getting the big picture right. We have to get off the path we’re on – the path that looks back 15 years for solutions like state asset sales.

Under my leadership, New Zealand will change, it will be forward looking.

We need to be bold and tackle the big issues holding our economy back.

Our policies will ensure our high and volatile dollar doesn’t undermine the competitiveness of our exporters.  We’ll give them the best possible opportunity to succeed.

We are a trading nation. We can only grow wealthy if we export.

That means an independent Reserve Bank that’s given a wider mandate to support exporters and jobs, not just focus on inflation.

We’ll pursue pro-growth tax reform that includes a capital gains tax to take pressure off house prices and ensure people invest in businesses, not the Auckland property market.

And a research and development tax credit that rewards ingenuity and encourages innovation in our businesses.

We’ll expand KiwiSaver to ensure all New Zealanders have a retirement nest egg. But also to invest the money we save into our best businesses so they don’t get sold offshore.

We’ll make superannuation affordable for the long-term so we can guarantee NZ Super for all as well as invest in the future of education and health.

All of those policies are opposed by National. But they are needed. They are tough calls. As leader of the next government, I’m prepared to make them.

Because these issues are the critical ones to make a real difference to our economy. To make a difference to our businesses and create the jobs we need.

But we also have to take action that will make an immediate difference to the lives of struggling New Zealanders.

Government working harder to put New Zealanders in work

Last week the Government announced it would cut the pay of apprentices to encourage more apprenticeships. That’s lunacy.

Even with record numbers fleeing for Australia, John Key still believes that lower wages are the answer.

I have a better alternative.

I’d rather get young New Zealanders off the dole and into apprenticeships.

Labour will do this by giving their dole payment to employers to subsidise these kids into apprenticeships and training.

I want to see local youth transition services bolstered so we’re linking the enthusiasm of our young New Zealanders to the opportunities we have.

With 84,000 young people not in work or education, this has to be a priority.

We also need the Government to be patriotic – to make the most of the money it spends when it comes to creating jobs. At the moment over 200 government agencies spend a total of $30 billion on goods and services, including infrastructure, each year.

By changing the way government buys goods and services, we can create more opportunities for Kiwi businesses and young New Zealanders looking for a job.

Dunedin’s Hillside rail workshops make train carriages to a high standard.

Yet Kiwirail chose a Chinese firm instead of backing local businesses.

That decision could see Hillside workshops close. Over 120 people could lose their jobs.

More than 50 other Dunedin and South Island companies sub-contract to Hillside – they also lost work.

That cost families their livelihood and our economy lost talent and skills that could take decades to replace.

To add insult to injury, those carriages now need substantial repair work.

Why can’t we be patriotic and get in behind NZ companies?

It’s different elsewhere.

President Obama brought in a “25% rule” for stimulus projects. Unless a foreign company is 25% cheaper making a product, the work should be contracted to a US company.

Australia has other checks for local contracting as does Singapore and many other countries.

That’s why we’ll ensure government agencies contract New Zealand businesses wherever possible. To build businesses, jobs and skills.

Labour will require government agencies to do a wider economic analysis of major contracts to ensure they deliver the best price and quality as well as the maximum benefits of the NZ economy.

Labour will also introduce a ‘one in a million’ target for significant government contracts.

It would require companies that are awarded major contracts to take on one apprentice or trainee for every $1 million contract it receives.

A start would be made in the construction sector and expanded into other sectors where it might also create opportunities for young Kiwis.

We’d also look at following Australia’s example and require tenderers to outline the use of NZ components and suppliers in every bid.

These changes could be making a difference right here in Christchurch. They would provide apprenticeship opportunities for young Cantabrians looking to get ahead.

Working harder to put Kiwis first

In rebuilding Christchurch, we could build the workforce we’ll need for the future.

But National is letting this fantastic opportunity pass it by.

National set aside $42 million to help train Kiwis for the rebuild, but 80 per cent of that money is just sitting there untouched.

With 84,000 young New Zealanders not in training or work, something’s not stacking up.

The latest estimates say half the 30,000 workers needed to rebuild the city will be brought in from overseas.

Migrant labour is an important part of our economy. It’s needed here. And once they’re here they should have the same rights as anyone else.

But we also have a responsibility to New Zealanders who need work and skills.

I want to be confident the rebuild isn’t used as an opportunity to bring in workers prepared to work 12 hours a day, 7 days a week for minimum wage simply to undercut competitors.

I’m not prepared to watch NZ go down a path that ends with builders or painters – decent jobs – being paid the minimum wage, instead for their skills.

Whether you’re born in New Zealand or you come here to work, everyone deserves the opportunity to succeed. Low wages undermine that.

We need to avoid being locked into a downward spiral where our skilled people go to Australia for better wages, where those people are replaced by migrants who are paid less, which in turn sends more of our skilled workers to Australia.

We see that now in our fishing industry, with foreign charter vessels using cheap temporary labour to drive down wages and conditions.

We see it our aged care sector. As skill gaps emerge, they’re being filled by temporary overseas workers working longer for less.

I want to make sure that employers wanting to bring in migrant workers are doing what they can to find or train Kiwis to do the job.

It’s simple.

We’d raise the threshold so that businesses need to prove they’ve engaged with WINZ and Industry Training Organisations before they get approval.

We’d require Immigration NZ to consider the competitive impacts, particularly on wages and conditions when it considers granting an approval to bring in temporary workers.

I’d also like to see conditions about wages and working conditions attached to the employer’s approval. And, where it’s appropriate, to require the employer to offer apprenticeships to young New Zealanders.

New Zealanders want to work. They are crying out for opportunities. The rebuild is the chance to give New Zealanders world-class skills and experience to build a career in NZ.

We need to be patriotic.

Because the other option is a one-way ticket to Australia. I won’t stand for that.

Putting us on a better path - Manufacturing

A critical step to putting us on a better path lies in reviving our manufacturing sector. Currently, it’s in crisis. Even if John Key doesn’t want to admit it.

Over the past 4 years, 40,000 jobs have been lost. Exports from the sector have gone backwards by 11 per cent once primary product processing is excluded.

I am not willing to sit by and see New Zealand’s future lost to ostrich economic inaction.

No western country can prosper without a thriving manufacturing sector and the well-paid jobs and quality exports that go with it.

New Zealand can’t prosper on agriculture alone. As good as we are at it, there's a ceiling to how much butter and beef and meat and milk you can make off New Zealand grass.

Manufacturing is the key. It generates around 12% of our GDP – more than farm-gate agriculture and tourism combined.

It employs 11% of our workforce – that’s more than agriculture, forestry and fishing combined.

And for each manufacturing job, 2 – 5 jobs are generated outside in all sorts of other areas.

You can see why it’s so critical.

That’s why last week I announced, along with Russel Norman and Winston Peters, that we will hold a Parliamentary inquiry into manufacturing.

We want to work together to find ways to lift the sector. We want to hear ideas from business, workers, academics.

Good businesses

We have great successful businesses in NZ.

But too many of our best are sold overseas. In the last decade 32 of New Zealand’s biggest high tech companies have been sold offshore.

We’re losing some of our best ideas and brightest hopes for growth, because these companies aren’t getting the support they need to be able to grow right here in New Zealand.

Our top 100 high-tech businesses generate around $6.5 billion, nearly 80% of that through exports.

We need to grow these businesses and quadruple their number over the next 10 years.

For that to happen they’ll need access to New Zealand capital to grow. Too many fail at critical points at their growth.

In the coming months we will be announcing new means of helping these companies.

We need to improve new businesses’ access to export markets.

We need to improve the leadership capacity of these companies as they expand.

We need to look at these options.

Conclusion

Our future is not set in stone.

I’m not resigned to a future of less opportunity and slow decline.

The next Labour Government will fight back for a future of opportunities.

It’s time we got proud, time we got patriotic. It’s time we backed New Zealand, instead of taking our hands off the wheel.

It’s time that we backed our workers, our businesses and our communities.

And it’s time that we made sure that young Kiwis like Kathy Rolfe don’t lie awake at night worrying about their dad having a job.