Expect labour market reform before November

Prime Minister John Key is refusing to rule out labour market reform, just three months out from the general election.

Mr Key said there had been an adjustment in the labour market since the global financial crisis began in 2008 but reform may be needed if New Zealand was going to ride out the current financial upheaval.

While no policy detail was available, Mr Key said if reform of the labour market would help New Zealand companies be more productive, then the government would definitely look at it.

“Productive companies export. If you're productive and competitive you export and one of the things that drives that is flexibility and clarity in the labour market.”

It was likely the government would unveil new labour market reform policy prior to the election, Mr Key said.

Mr Key would not go into detail of potential reform but high on the agenda of groups that have advocated for reform, such as the Business Roundtable and the Employers and Manufacturers Association, would be the reintroduction of youth minimum rates and more restrictions around collective bargaining.

Predictably, Mr Key's comments were attacked by the Council of Trade Unions (CTU).

Peter Conway, CTU secretary, said that it appeared the government was positioning to launch further attacks on work rights, which will reduce the ability to bargain for better wages.

“We have been increasingly concerned that the government has abandoned any attempt to build a ‘high wage, high skill, high value economy’ and instead is advocating for a ‘competitive’ economy based in part on weakened rights for workers.”

Mr Conway said the government should come clean on these changes rather than hint at them in response to further volatility in the exchange rate.

“Alternative measures from the Reserve Bank to directly control use of credit, restrictions on bank reliance on overseas funds, and moves to a pegged exchange rate against a basket of currencies are the sorts of measures the government should be exploring, not further attacks on work rights.”