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Key has highest jobless rate since Shipley: Labour

Finance minister Bill English is pushing on with the government’s plans to help business make employment decisions, despite a 13-year high in unemployment figures.

Statistics New Zealand’s latest household labour force numbers show people out of work rose to 7.3% in the September quarter.

As expected, the number has been seized on by Labour leader David Shearer and other opposition MPs, who say prime minister John Key’s legacy is leaving the highest jobless rate since Jenny Shipley’s National government in the late 1990s.

Mr English has partially blamed the struggles Britain, US and Europe continue to face.

“That’s having a bit more of an impact on us than we expected and shows it’s reasonably tough for people in the job market,” he says.

He accepts the economy is a lot softer now than it has been in recent months, but says the unexpected jump in jobless figures is at odds with other figures he has seen, such as a fall in unemployment benefit figures.

Mr English says Auckland is driving the unemployment rate, but he is at a loss to explain why the benefit numbers there have been falling.

He is again relying on the Christchurch rebuild to stimulate job growth, with the recruitment drive on to find 1000 additional contractors.

The fluctuating job market does not wash with Green MP Metiria Turei, who says it is the third rise over the last three quarters.

“There is no plan to create or stimulate jobs in this economy by this government. They keep claiming businesses create jobs and therefore they have very little role in it, but actually they set the economic settings.

“They are obsessed with industries which are highly extractive – are very much 20th century industries, not 21st century industries.”

Mr Shearer agrees the latest figures are “disastrous” and does not believe National has a plan to help out business owners.

“What’s the plan? More unemployment? So far their plan has driven unemployment up rather than down. I remain completely unconvinced.”

Mr English was unclear about how many jobs the government had created in the past two years, despite promising last year to create 170,000 new jobs over four years.

“I couldn’t give the precise numbers now. I’ll have another look at that in the half-year update, which will be published in December.”

Meanwhile, a new Kelly global workforce index survey shows New Zealand’s workforce is one of the oldest in the world.

The index surveyed 3500 people and showed the mean age of New Zealand’s workforce is 35.2, compared to 31.9 throughout the rest of Asia Pacific.

 bcunningham@nbr.co.nz

More by Blair Cunningham

Comments and questions
48

Key & English have no strategy for the economy. That is why it is in a mess. Their only strategy was to win elections. FX dealers never have strategies beyond a few weeks.

Ever hear of a thing called the GFC and the long-lasting, wide-ranging effects it has had on the entire globe?

Surely you don't think Norman & Shearer's "brilliant" idea of printing money would work?

Unless you long for home brew called Ouzo? We'd be called New Zimbabwe!

So deficit spending for tax cuts to the rich Key isn't an idiot? Under Clark/Cullen surpluses and growth, under Banker Key and Flailing English deficits, cronyism, stagnation, job losses, population loss and Deaths for corporate profit.

In the period the Labour government was in power a retarded baboon could have achieved surpluses and growth - even Greece managed to pull off growth in that period. The reality is that Labour continued to borrow, instead of reducing the debt and investing in growth while there was money to do so and Key and co are now requiring us to pay for it.

Typical left wing generalisation that doesn't bear up to close scrutiny. The top tax rate was reduced to align with the Trust rate and the company tax rate to ensure the rich were stuffing their incomes into family trusts and businesses. The income tax reduction was offset by an increase in GST, a consumption tax the 'rich' can't completely avoid. Beneficiaries were compensated by an increase in payments and low income earners had a rebate for incomes up to $50k. Sure inflation ate most of this increase but then Norman and Shearer would claim the Reserve Bank shouldn't focus on inflation despite the fact it is the biggest destroyer of lower income household spending power. The company tax rate was also adjusted to match Australia to prevent business flight across the ditch, in contradiction to your claims.
The deficit you claim National has racked up is mostly a result of the Clarke/Cullen vote buying lolly scramble of interest free student loans and middle class welfare aka Working for Families The welfare system also ballooned under the Labour government to the point where MSD now spends $12m per annum on lawn mowing among other things. Oh and there was also an earthquake in case you missed that.
As Margaret Thatcher once said 'the problem with socialism is eventually you run out of other people's money to spend' go see Greece for a real world example.

Actually we are somewhat more akin to a cross between Mexico and Greece which I have labelled New Meece. Corporate Australia is employing our low paid labour force and we have a level of bureaucracy that knows no bounds. To be fair the Key government has inherited a cot case engineered by a socialist Clark regime that empowered bureaucracy beyond its wildest imagination. Just try and get local or central government to make a quick decision practically impossible.

Whatever they have or don't have, they are better for our future than the personality and intellectual vacuum on the other side of the house, both red and green.

The problem with politics is that there is always someone to blame, whether the blame is right or wrong. There are other factors influencing the NZ economy other than the people elected to run it. Businesses that create jobs and then decide to outsource those jobs to another country is driven by profit, those jobs are lost to kiwis. However, if the government legislates to discourage this type of business practice they are accused of interfering too much. Too much interference then discourages businesses to setup in NZ rather than say Australia. There is always a trade off.

Don't you just love it when Labour politicians and supporters confirm beyond all doubt that they don't have the first clue about world events, or are totally incapable of reading!!.

And Labour has a workable plan? Labour hates business owners - remember that Labour despises any successful 'rich pr*cks'.

more like 2 seconds n 24 hours

I am a small business with 30 staff. Have been in the export business for over 30 years and I'm fast becoming dismayed with our present govt's lack of understanding of our compliance costs, high dollar and other difficulties in general. My staff are ever so appreciative we have managed to kep them in employment. For how much longer - I do not know

We are in almost the same boat, with an equivalent sized business.

Its not a consequences they are high unemployment rates with a National Government. The party should be renamed Multi National, because thats who they are working for.

What they fail to understand is small business generate employment, while large multi national companies shut businesses down. Its their game. Take out the competition.

Governments dont work for the people. They work for themselves.

Anonymous. I'm sure the Government does indeed understand. Most NZ'rs will feel some sympathy for you. But, (and there's always a but) the Government isnt responsible for the GFC and its still significant impact. The high NZ dollar, and I assume you mean against the US dollar, is very much attributable to the US printing money, thus devaluing their currency by dilution. Unfortunately for the US, they have no other option to combat the threat of deflation, since their interest rates are so low. Suffering from deflation contracts an economy and can't be tolerated, particularly at present. (see also Japan for this effect)
Being in a small business myself, I would suggest you need to do something about your product range, customer base etc. It is not the Governments job to protect you. It is yours. There is an argument to say that you have been benefiting in the last 30 years from an artificially priced USD.

Well just be thankfull you are not in Australia then, imagine what the higher Australian dollar would do to your business. Get real! Unless we adopted the Chinese regime for the NZ$ then we have no control over the impact of the world economy!! Then, even if we implemented exchange rate controls, we would be seen by the rest of the world as "anti-completive" from a trade relations point of view, and no-one would by your products anyway...

Not a surprise.

MANY of the predictions and warning about business failure and unemployment written in the mountains of submissions for the ETS warned of this. Stick a background tax in place and watch spread harm through an economy like a virus in a computer.

World leaders!

It's what happens when you stop pushing the unemployed onto other benefits to hide the problem. It's no different from previously except the numbers are being reported properly.

Possibly a valid argument. However the really scary thing is that the Ministerof Finance does not have the knowledge or the intelligence to be able to provide such an answer. "I don't know how many jobs we created" - surely that in itself should be enough for him to lose his portfolio.

who was finance minister under jenny shipley. Surely not the same finance minister as under Mr Key?

Perhaps the drop in Benefit numbers in Auckland is the result of changes to rules on eligibility and tightening up on those who have been collecting the benefit when not entitled. Not a bad thing.

@ #1 Could it be that NZ has no strategy or vision? Where should NZ invest tax funds - Education? Job creation?

We tend to look intio rear vision mirrors as a nation instead of taking a punt on the future, and it is this that is sorely needed and probably wont happen given the near complete lack of vision (not to mention energy wasted on cheap point scoring) by both sides of the house.

NZ needs to become a state of Australia and be done with it. We should at least be a single economic entity

That would be like fusion to a corpse.

For the Aussies?

New Zealand does need to be a state of Australia but I sincerely doubt that a majority of the Australian people plus states would vote to amend the federal constitution to allow it to be so.

This is no longer a country Australians identify with, as the same but different, the way it once did.

What does New Zealand have to offer Australia? Those who have something to offer Australia have shown their committment to Australia by moving there.

The Australians will have no choice in the matter - the big secret that politicians choose not to alert the folk to is that NZ is currently part of NSW already. Read the first paragrapg of the Australian constitution and it includes NZ. As I am told all NZ needs to do is declare our intent and it happens.

Unemployment will continue to grow as more and more people continue to buy overseas goods.

Discover-Me.co.nz is helping local manufacturers by promoting and selling their goods online. No listing fee's, low commission, everyone wins.

Rather than wait for Key or English to come up with a plan.... you can help by supporting our sellers.

Hundreds of products are being added every week.

Bill English has got himself a double.

Well, here we go again. This is an issue which should be addressed on a bipartisan basis as it is something that effects all Kiwis. Lets not waste time with knocking the present government lets all be productive and if there are good ideas out there get them on the table and improve the lot of all Kiwis - or is it just wishful thinking on my part that there are some smart ideas out there? Adam Smith, you might like to be the first to share a smart idea for growth?

Ray, thank you for asking. There are smart ideas for growth. They are well developed and will be a sigfificant party of the strategy of the next government if David Cunliffe is driving Policy
Have a ;look here. . http://cunliffe.co.nz/category/speeches/

Hope is not a strategy.

This govt doesn't know bat sh1t how to manage an economy. Lets print money and get the manufacturing jobs back to Owtearowa.

Brilliant idea that printing money, we could all then go and live on the street because we won't be able to afford to rent a house and pay for food as the same time!! Or alternatively, all those manufacturers you speak will still end up overseas as they won't be able to afford the NZ labour costs!!!

Ray, thank you for the invitation. A large number of smart ideas for growth are to be found here:

http://cunliffe.co.nz/category/speeches/

National has been firing all the left wing bureaucrats that were employed by Labour and Dictator Helen, I think this is the reason for the increase in unemployment.

All 170,000 of them?

Yes !! All 170,000. Never was there so much padding of figures as occurred during the Clark era.
She, and She alone must bear most of the responsibility for the demise of the e,plyment opportunities in NZ, and also for the rise in unemployables.

That's because National did not reclassify a lot of unemployed as "sickness beneficiaries" which Labour cleverly did, thus removing whatever little stick there was left for those to go get a job.

As many should be able to clearly see now the smile has slipped..
Derivatives Traders are not the Business generators or innovators they have been talked up to be & can actually be Business eviscerators..They speculate with others' money unless they have insider tips too..Be good to actually have a National Party business review wouldnt it? but that would actually require some transparency and accountability and no amnesia or buck passing! Anyone want a side bet on that happening before December?

I'm not having a crack at National as I'm much happier withthem than I believe I would be with the others.

There was a comment that Unemployment has risen while Benefits have dropped and the difference couldn't be explained. It may be that as Benefits are represented as a dollar value, when people leave for overseas this number diminishes. With Unemployment represented as a percentage those same people leaving are lowering the population making the Unemployment percentage higher of those that remain.

A possibility anyway.

I've said it before and its worth repeating. No government (except in Muldoons era when he allegedly knew the names the list was so short) has any desire to count the true unemployed.
In the last year I have never in a very long life known so many folk out of work. Most are not registered anywhere, they are just lost to the system relying on partners income or savings. Many are in self employed businesses that are'nt even paying wages. Politics aside....its pretty grim.

Why do you blame the National government? It is a balancing act for any government when comes to job creation. Already the tax revenue is coming down, how is the government going to grow the economy if they have less to spend?

National government is already in debt trying to revitalise Christchurch. It is very easy for National opponents to point fingers, but do the opposiitions have any solutions?

The government is cutting their expenses now to reduce their debt. Should the government cut jobs in the public sector or should the government cut their support to the social welfarre of New Zealand? Which is more important? You cannot have both?

Maybe now people will understand the children's story "Shonkey Donkey". Creating jobs was not to build a cycleway, or infrastructure to enable Fletchers to profit. Jobs will come when the government allows the small business to function in a manner not stiffled by red tape. NZ subcontractors can not even tender work without the government becoming involved and insisting that Fletchers be considered. Brownlee and Joyce are punching well above their weight (impossible I hear you say ) and are just puppets to the corporations.
Please let the average Kiwi get on with it and have some realism in the country.

Operating in the tourism our business is being badly affected by the high NZ dollar. However there is no simple fix for this as the strength of our dollar is mainly due to the bad state of the European, UK and US economies resulting the weakness of their economies. Beware of political parties offering simplistic solutions to this problem.

Low employments is the inevitable consequence of increased efficiency in almost all commercial activities, particularly in the clerical field, and evident in retail with increasing low stafffed online shopping. Job losses have been mainly in clerical and admin in NZ. It's the sdame right through the civilised world. Perhaps we're looking at the biggest change in commerce since the industrial revolution. Ultimately we will be reduced to a four day working week, and until then, look forward to around 10% plus unemployment world-wide. .

Hi Harriet,
A lot of our corporations are shipping back office/ Call centre jobs overseas. This is criminal. Even Orcon (government owned is sending their call centre overseas). Unlike manufacturing, an ISP, bank, , or electricity company does not have to compete with the rest of the world. They compete with each other in NZ. The government should start to punish these poor corporate's with penalties for sending jobs overseas.

It seems a lot of people have forgotten what 'Fortress NZ' was like pre-1984, when all sorts of manufacturing industries were 'propped up' by government policies (such as import duties and licenses) in order to 'make work' in NZ. The car industry is a good example. In 1984, it cost $24000 1984 dollars to buy a 1600cc New Zealand assembled Japanese hatchback. It costs about the same in 2012 dollars to buy a similar sized (but far superior quality) vehicle. Removing protections cost jobs in NZ, but it also allowed competitive international markets to reduce the price of almost all goods consumed in NZ (clothing, appliances, household commodities etc). Putting protections back in place to keep jobs in NZ will simply cause the cost of all goods to rise, hurting the New Zealand economy.

The government is not obliged to provide everyone with a job - it does not 'create' or 'destroy' jobs - it simply creates the environment where others in response to the economic environment and policy signals hire and fire people in accordance with their productive activities. There is no 'magic policy bullet' that will solve NZ's economic woes. But meddling in one area will almost certainly have unexpected negative consequences elsewhere. No amount of wishful thinking by policy-makers will ever create jobs. Policy makers are no better at reading the entrails of economic environments in order to pick 'winners' and 'losers' for job creation/industry stimulus than the owners of the firms that actually live and die in the international markets and thereby create and destroy jobs. All policy makerscan do is to manipulate the distribution of the gains and losses between different of the economy - a very risky activity that might create even bigger losses than doing nothing. If they somehow 'get it right', it is rarely a result of better knowledge, but rather just a matter of luck. During the 1930s Depression, Roosevelt made a lot of costly mistakes along with the much-heralded activities for which he has become known. In the fullness of time, history tends to forget the failures, leaving the sense that it was inspired policy and not just plain luck that led to some activities being vindicated. The current government policy of 'first doing no harm' may yet prove to be overall a better outcome than 'diving in where angels fear to tread'.

What planet are you on?

If freemarket existed, then the current government ideology would work.

Local manufacturers competing with slave labour is hardly freemarket, unless you want your fellow citizens to work to the same slave conditions.

If freemarket works so well, why are most of the western economics that adopt it having to print money to get out of it?

If you havent noticed, since adopting Rogernomics (1984) or the freemarket he called it, NZ hasnt exactly been moving forward. All thats happened is monopolies; more overseas owned, (sold by the government) have been charging what they like and sucking NZ dry of their money supply.

This money supply is now being replaced by overseas debt. Greece here we come.

Typical rubbish from left wing, union supporting socialists.