Matt Cowley: Employment issues are going to plague small businesses

Challenges are mounting for local employers. Photo / Getty Images

OPINION

It's a crazy time for small businesses that want to employ a team of local residents.

Staffing is the most common issue facing Tauranga employers across all sectors. We are at the peak of an employment crisis, with a sinking pool of available, eligible staff and rising staff costs.

The region is already at record low employment levels. Additionally, since June last year, New Zealand's net migration has been dropping by around 1,000 each month as more Kiwis buy a one-way ticket overseas.

Many employers went through a painful process a few months ago to exit unvaccinated staff from their workplaces to comply with the Government's vaccine mandates.

However, the recent relaxation of the mandates suggests that the process was a waste of time for many businesses. Now employers are desperately trying to re-employ their staff.

It is also a lot harder for employers to recruit overseas workers. Working visas are only issued where the declared employer has passed an accreditation process and they are paying the worker a minimum hourly wage of $27.76 or more.

Then, from April 1, the adult minimum wage will increase from $20.00 to $21.20 per hour. Other employees will be asking for more wages as those on the minimum wage catch up to them.

But the big kicker is the Government's announcement of the Fair Pay Agreements. The thought of 1,000 café workers in central Auckland compelling all café owners across New Zealand into compulsory collective pay agreements is ludicrous. There are other significant details about the Fair Pay Agreements, which I will go into in the future.

The Fair Pay Agreements will happen: the Minister of Workplace Relations said it was an election manifesto promise and the Labour Government has the numbers to pass it into law.

There are further changes in the mix as the Government is also investigating a new Income Insurance Scheme. Although the employees will pay the insurance levy to support them if they lose their job, if staff see a reduction in their monthly take-home pay, they will be asking the employer for more pay to make up for it.

The cumulative impact of all these changes is overwhelming for many small business owners.

The Government frequently refers to traditional industries whose workers unions have battled for, such as bus drivers, cleaners and in healthcare. But are they being honest about the cumulative impact on small business owners, who make up about 97 per cent of New Zealand's businesses?

When will the Government have a helicopter view of the impacts that the Government's relentless employment law changes are having on local businesses?

At what point does the Reserve Bank of New Zealand call out the Government's policy changes that will have a prolonged impact on inflation (which the Reserve Bank is desperately trying to get under control)?

People on lower incomes are feeling the pain of rising costs, but there are other ways to support them that do not perpetuate and prolong this incredible period of inflation.

Matt Cowley is the chief executive of the Tauranga Business Chamber