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Home / New Zealand

<i>Fran O'Sullivan</i>: Key doesn't care for ideologies at jobs summit

Fran O'Sullivan
By Fran O'Sullivan, Fran OSullivan
Head of Business·NZ Herald·
6 Feb, 2009 03:00 PM4 mins to read

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Fran O'Sullivan
Opinion by Fran O'Sullivan
Head of Business, NZME
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KEY POINTS:

John Key's PR machine has yet to reveal who is on the hand-picked guest list for his February 27 jobs summit.

Invitations went out this week and the summiteers have been directed to leave their "ideology" at the door and focus on "what will work for everyday Kiwis".

Along with the latest cliches to come from the Beehive's ninth floor (Think the "rolling maul" and the "short-term sugar fix which will lead to a diet of debt later") the reliance on PR-speak obscures what lies beneath the colour.

It's tempting to think about the event as a giant corporate encounter group where participants will be enticed to collaborate together in the national interest - rather than playing to their own interests. Thankfully, they won't be naked.

It is not rocket science either to work out that "everyday Kiwis" won't get much say on the hot issues to be discussed at the Prime Minister's Summit on Employment. Take the goal "to identify workplace solutions that are in the long-term best interests of New Zealand by identifying specific potentially time-dated measures and agreements that are 'right' for these conditions." (This gobbledygook was drafted by the PM's own department - not me).

This suggests employers and workers might be able to negotiate agreements that enable the introduction of measures like wage "pauses", reductions in working hours or cuts to wage rates, so as many staff as possible can be kept on through the tough times until business picks up.

This will present a considerable challenge to the co-chairs for the core employment session: Council of Trade Unions president Helen Kelly and Air NZ's Rob Fyfe.

Fyfe froze his management team's pay well before US President Barack Obama made it fashionable. But Air NZ may have to shed staff again if conditions do not pick up.

If the upshot of the summit is to come up with new workplace solutions, shouldn't Fyfe be duty bound to follow them even if at some cost to the airline's finances?

Similar questions might also be asked of the bosses from The Warehouse, Fairfax, Telecom and Fisher & Paykel - most of which have dropped staff over the past 18 months.

And will the unions play ball?

The Public Service Association is already cavilling at the notion that Government departmental staff may be in line for salary freezes.

On the shop floors, construction sites and behind retail counters workers will be more likely to go with the "we are all in this together" line if top management is seen to share in the mutual sacrifice.

As prudence becomes the new trend, pressure will come on management perks.

However, there is no suggestion that boards of directors presented with 'restructuring plans' should ensure management does its bit. No sign either of any proposal to ask shareholders to take reduced dividends to help secure the long-term viability of their enterprise and its employees.

But unless the invitation list is wide enough, ideas that fall outside the usual corporate group-think may not get a run.

Summit chair Mark Weldon has shoulder-tapped some well-known Kiwis to chair the six designated workstreams.

Among them: The Warehouse founder Stephen Tindall, Fairfax boss Joan Withers, Professor Ngatata Love, Local Government NZ president Lawrence Yule, Fisher & Paykel Appliances chief John Bongard, Telecom chair Wayne Boyd, accountant John Shewan and investment banker Rob Cameron.

The summit programme is geared towards bigger enterprises (47 per cent of employees are in firms with more than 100 staff).

The Government is clearly concerned that any deepening of the global recession, further reductions in private sector business investment or rationing of firms' funding liquidity may see unemployment rise even higher than the Treasury's downside scenario of 7.5 per cent unemployment in 2001.

But company survival is also paramount.

Key industries like construction, technology, retail and tourism have been singled out as highly exposed to the global recession.

Businesses are also hoarding cash and delaying or cancelling capital expenditure.

And the risk remains that firms will go under if they can't readily access capital.

The Government has portrayed this as a jobs summit, but some of the issues up for discussion - like using the NZ Superannuation Fund to supply investment capital to firms - deserve a broader context like an economic summit.

There is no way the summit can do justice to big issues - like policies to stimulate or bring forward large scale private sector infrastructure - in a single day. Nor will the push to ensure Australian banks treat New Zealand firms as "core" to their interests be able to be settled at this summit.

But Key and Weldon should be able to apply their brand of moral suasion - that's what encounter groups do.

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