Now we know (roughly) the cost of a day off for Matariki – and for good measure the Govt will be changing the Holidays Act

Our Beehive Bulletin … 

When our kindly PM announced 24 June 2022 will be the date for New Zealand’s first official celebration of Matariki, she didn’t mention the cost – at least, not that we recall.   But this week we learned from ACT leader David Seymour that estimates included in official advice to the Government are somewhat eye-watering for the businesses that must pick up the tab.

Mind you, the Government hasn’t finished burdening employers with holiday obligations, although it says it is doing them a big favour by accepting all of 22 recommended changes to the Holidays Act made by the Holidays Act Taskforce.  Just to make things clear, you understand.

News of this was among the latest announcements from the Beehive which – for the record – includes a big tick of approval for the government from the Standard & Poors credit ratings agency.

New data on child poverty are the subject of a post, too (although these don’t show the impact of Covid, which can only have exacerbated inequities).

Here’s what the Beehive has announced:

  • New figures released by Stats NZ today show across-the-board improvements in child poverty rates, with some statistically significant changes over the two years since official measures were put in place. The PM said (for anyone who might have forgotten) reducing the number of children living in poverty is a key priority for the Government.
  • The 2021 Prime Minister’s Education Excellence Awards are open until April 16. There are four main award categories: Excellence in Engaging, Excellence in Leading, Excellence in Teaching and Learning, and Excellence in Wellbeing Education. The Prime Minister’s Supreme Award is given to the best overall entry from these four categories. There is also an Education Focus Prize which this year will be awarded to an education service that can demonstrate excellence in environmental and sustainability education.
  • Three new Jobs for Nature projects will help nature thrive in the Bay of Plenty and keep local people in work, says Conservation Minister Kiri Allan.   
  • The Government has accepted all of the Holidays Act Taskforce’s recommended changes.
  • The Government’s handling of the COVID-19 pandemic and faster than expected economic recovery has been acknowledged in today’s credit rating upgrade, Finance Minister Grant Robertson brayed (presumably confident no conspiracies were involved).

With regard to the cost of Matariki, Seymour flushed out the information about costs to employers through written questions and learned the bill is much bigger than the $219 million the Employers and Manufacturers Association estimated when the idea was raised in September during the election campaign.

As he tells it:

“Answers to written questions I put to Workplace Relations Minister Michael Wood reveal the Ministry of Business, Innovation and Employment (MBIE) estimates the Matariki holiday would cost 534,930 businesses between $377 and $448 million.”

He goes on to note that businesses across the country are already fragile from the effects of COVID-19 and hefty increases in the minimum wage.

Add on extended paid parental leave, the provision for domestic violence leave and a $1 billion bill for extending sick leave from five to 10 days a year,

“ … and it’s clear this Government is being reckless with the country’s ability to pay its way.”

Then there’s the net core Crown debt, which breached the $100 billion mark for the first time last week.

Seymour argues that now the true cost of creating a 12th public holiday is clear, the Government should identify another holiday to be removed from the calendar.

“It’s a shame, but as a nation we simply can’t afford to add more holidays.”

That was before we heard from Workplace Relations and Safety Minister Michael Wood, who had the job of announcing the Government has accepted all of the Holidays Act Taskforce’s recommended changes.  His spin is that this is a win-win decision “which will provide certainty to employers and help employees receive their leave entitlements”.

The task force’s recommendations include:

  • Entitling eligible employees to bereavement leave and family violence leave from their first day of employment.
  • Giving eligible employees one day’s sick leave from their first day of employment, with an additional day given per month until the minimum entitlement is reached.
  • Extending bereavement leave to include more family members, including cultural family groups and more modern family structures.
  • Removing the current parental leave ‘override’ to address discrimination against parents who take time off to care for their young children. Removing this provision will mean that employees returning to work following parental leave will be paid at their full rate for annual holidays.
  • Requiring payslips, so employees know what their used and remaining leave entitlements are, and how these were calculated.

Wood recalled that the Government established the Holidays Act Taskforce to help address challenges with the Holidays Act after a joint request from Business NZ and the Council of Trade Unions.

The Holidays Act 2003 encourages a healthy work-life balance by setting out minimum holiday and leave entitlements for employees, he said.  But employers have found the legislative requirements hard to administer.  Some employees missed out on their entitlements.

The changes put forward by the Holidays Act Taskforce will make it easier to calculate entitlements and pay, giving employees and employers certainty and transparency, Wood said.

“Business and union representatives reached consensus on these changes and we are delivering on our election commitment to implement them.”

The new poverty figures gave an opportunity for Jacinda Ardern, Prime Minister and Minister for Child Poverty Reduction, to credit the Government’s Families Package changes with decreasing the number of children living in poverty by tens of thousands.

The Families Package put more money in the pockets of parents (this is borrowed money which taxpayers must repay, let’s not forget).  Other policies include healthy free lunches in schools, the scrapping of school donations and free doctors’ visits for under 14s to take pressure off household budgets and improve kids’ quality of life.

The latest statistics don’t include the impact of measures introduced since the start of COVID, including the $25 benefit increase, indexation of benefits to average wage increases, doubling the Winter Energy Payment last year and increases to abatement rates.

The PM said:

“We know that there is more work to do, but we estimate over 100,000 households with children are on average over $100 a week better off as a result the full range of changes the Government has made to date.”

Her press statement included …

Actions the Government has taken to help reduce child poverty:

  • $5.5 billion Families Package increased financial support for low income families, including increases to the Family Tax credit, Accommodation Supplement changes, Winter Energy Payment, and Best Start Payment.
  • Indexation of main benefits to average wage growth for the first time in New Zealand’s history.
  • Increasing abatement thresholds to increase the amount beneficiaries can earn before their benefit reduces.
  • Lifts to the minimum wage from $15.75 in 2017 to $20 as of April 2021.
  • $2.8 billion COVID income support package, which increased benefits by $25 per week, doubled the Winter Energy Payment for 2020, and broadened eligibility for the In-Work Tax.
  • Expanding school-based health services and making doctors’ visits free for children under 14.
  • Increasing funding to decile 1-7 schools that agree not to request parental donations, and removing NCEA fees.
  • Expanding free healthy lunches in schools to over 200,000 children by the end of 2021.

The burden on taxpayers mounted when Kiritapu Allen announced a $1.4 million investment in three new Jobs for Nature projects.

The money has gone to …

  • Ngati Tahu-Ngati Whaoa rohe – $826,000 over four years to restore and improve geothermal, fresh-water and cultural sites;
  • Project Aumangea – Tarawera Maunga – $355,555 over one year to clear wilding pines from Mt Tarawera in a joint project involving the Department of Conservation, Ministry for Primary Industry, Bay of Plenty Regional Council, and Ngāti Rangitihi.
  • Project Whakahaumanu – Okere – $220,265 over one year to redeploy Kaitiaki Adventure staff to carry out conservation work on the Otanewainuku Ecological Area where they will undertake removal of noxious plants, fencing, communal garden construction, harakeke transplanting, re-establishment of manuka plantation, pest control and erecting nesting boxes on selected areas.

But while the spending mounts – along with the public debt – we can take comfort from Standard & Poor’s decision to raise New Zealand’s local currency credit rating to AAA with a stable outlook. This follows Fitch reaffirming its AA+ rating last month.

According to Robertson, S&P praised the Government’s handling of the pandemic saying New Zealand is recovering quicker than most advanced economies because it has been able to contain the spread of COVID-19 better than most others.

“We have always said the best economic response to this pandemic is a health response, which is why we went hard and early with our decisions just over a year ago,” Grant Robertson said.

“The economy has bounced back because we did not waste any time as we saw the pandemic take hold overseas. We supported around 1.8 million workers through the Wage Subsidy Scheme and invested billions in infrastructure, training and creating jobs.”

S&P says those measures softened the blow presented by COVID-19 and are supporting the subsequent economic recovery.

The agency also says the New Zealand Government’s relatively better management of the pandemic means that its credit metrics are in a good position to weather negative shocks to the economy.

“Our careful management of the Government’s books meant we were in good shape as we went into 2020, particularly with relatively low public debt. That stood us in good stead as we supported our people and our businesses through the pandemic.”

That support continues as the government opens applications for the new Resurgence Support Payment to help businesses affected by last week’s increased alert levels.

Latest from the Beehive

23 FEBRUARY 2021

Government action reduces child poverty

Entries open for the 2021 Prime Minister’s Education Excellence Awards

Jobs for Nature benefits three projects

Improvements to the Holidays Act on the way

 22 FEBRUARY 2021

NZ’s credit rating lifted as economy recovers

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