Job Summit ideas come to fruition

Expansion of group training schemes is required as part of Government contracts. Photo / Sarah Ivey

Hard-pressed businesses may be set to get help to cope with late-paying customers in tomorrow's Budget.

The Government appears to be ready to pick up a proposal from February's Job Summit for the Treasury's Export Credit Office to guarantee bank loans for domestic firms to fill confirmed orders - branching outside the export sector for the first time.

Prime Minister John Key said several Job Summit ideas would come to fruition tomorrow.

"Initiatives have come from the summit, some of which are already announced, and others are progressing. Thursday's Budget will include a few more," he said.

Other summit ideas which may be ready for action include loosening enrolment caps on tertiary institutes, funding institutes to employ students in the summer holidays and new guidelines making it easier for local firms to supply goods and services to the Government.

But the Budget's biggest impact on jobs could be in housing, with a home insulation package and the proposed "Gateway" scheme, which will let first-home buyers build on public land without having to buy it for up to 10 years.

The Export Credit Office has already quietly extended its role since February by offering to guarantee working capital and trade credits totalling up to $50 million for exporters hit by tighter international credit markets.

Manager Carmen Moana said demand for the new services had been greater than expected, and ministers are considering lifting the $50 million limit. She said the office was also "in a position to be able to operationalise" extending its working capital guarantee beyond the export sector as soon as it had the Government's sign-off.

"We have that guarantee already for exporting firms. The discussions we've had with officials are about how we leverage off that existing guarantee, with the banks potentially looking at increasing levels of cover or a longer time frame."

As with the existing exporters' scheme, any extension to domestic borrowers would be on the basis that companies proved they had a sound contract with a customer and that they had not otherwise been able to raise the finance needed to carry out the contract. They would also have to pay a commercial fee for the guarantee.

Master Builders Federation chief executive Warwick Quinn said he expected to see initiatives in the Budget to help first-home buyers, including details of the income levels and other criteria for the proposed Gateway scheme.

"What we put forward at the Job Summit was to try and kick-start new housing, so to make that more affordable we put forward suggestions to help young or first-home buyers into the market, such as equity sharing, low-interest loans and whatever mechanisms might be suitable to encourage them into the market, including the Gateway project," he said.

Meanwhile, the Ministry of Social Development said that as of May 15, seven firms had signed up to the summit's flagship programme - the "nine-day fortnight" scheme. It pays employers $12.50 an hour for five hours a fortnight for up to 10 times the number of workers they would otherwise have made redundant, on condition that they don't lay off any of the workers in the scheme for six months.

The ministry is paying the subsidy for 758 workers to save 143 jobs at the seven businesses.

Fisher and Paykel Appliances in Auckland and Summit Wool Spinners in Oamaru are still the only two firms that have signed up publicly, and Fairfax Magazines has publicly invited its staff to join the scheme.

The ministry said it had provided redundancy support to 5913 workers laid off by 325 employers since the start of this year.

Its monthly tallies suggest redundancies have worsened this month, with support given to 1503 workers laid off by 60 employers in the two weeks to May 15. This probably included the 186 people who lost their jobs in the collapse of clothing manufacturer Lane Walker Rudkin.

The ministry helped 2677 redundant workers between January 5 and May 15 under its ReStart package, which provides higher family support and an accommodation supplement for up to 16 weeks after redundancy.

Just over 1100 of these (41 per cent) were in Auckland, confirming other data showing that the recession has hit hardest in the country's manufacturing capital.

* Proposals and outcomes

THE BIG 3

1 Nine-day fortnight

Idea: Retain jobs by reducing wage costs and upskilling workers one day a fortnight.

Outcome: Government pays employers $12.50 an hour for five hours a fortnight for six months for up to 10 times the number of workers who would have faced redundancy, on condition that none of the workers covered are made redundant in the six months. Taken up by seven firms so far, covering 758 workers.

* * *

2 State/banks equity fund

Idea: $2 billion fund to take shareholdings in struggling firms.

Outcome: Abandoned on April 20 due to worries that the scheme would have jeopardised the banks' stability.

* * *

3 National cycleway

Idea: Build a bike track from Cape Reinga to Bluff.

Outcome: $50 million announced on May 14 for a series of "Great Rides" with a long-term aim of a national network of cycleways.

* * *

THE REST OF THE TOP 21

4 Seasonal marketplace

Idea: A marketplace to link employers with seasonal workers.

Outcome: Agencies collecting data to support planning.

* * *

5 Expand training

Idea: Expand group training programmes; review apprenticeship models to expand training; require training as part of government contracts, eg for state housing.

Outcome: Apprenticeship co-ordinators keep funding for 12 weeks after an apprentice loses a job to find the trainee a new job. Budget may suspend penalties on training institutes that exceed their enrolment caps and may fund institutes to employ students in the summer vacation.

* * *

6 Match training to jobs

Idea: Match education and training priorities to identifiable job opportunities.

Outcome: Skill supply and demand indicators now available on Labour Department website.

* * *

7 Redundancy support

Idea: Improve support for redundant workers including income support, better information and access to services.

Outcome: ReStart package unveiled before election provides higher family support and accommodation subsidy for 16 weeks after redundancy.

* * *

8 Better use of iwi assets

Idea: Bring Maori land and water-based assets into higher-value export-focused productive use.

Outcome: Maori Trustee Amendment Bill passed. Officials scoping a review of regulatory barriers to utilising Maori land and finalising plans to improve rating of Maori land.

* * *

9 Services for Maori

Idea: Improve effectiveness of government services to Maori.

Outcome: Officials "monitoring options".

* * *

10 Local/central government investment

Idea: Job-focused investment plan across central and local governments, with pooling local body borrowing to access lower interest rates.

Outcome: 20-year national infrastructure plan being drawn up by end of this year by new Treasury infrastructure unit, advised by National Infrastructure Advisory Board appointed on Monday (no local government representatives). Joint steering group about to issue request for proposals for design of local government borrowing vehicle.

* * *

11 Reduce regulatory compliance costs

Idea: Adopt permissive approach to building consents and food safety; moratorium on drinking water and air quality standards.

Outcome: Regulatory Improvement Bill introduced. Building Act being reviewed to possibly exempt low-risk work and some work done by licensed building practitioners from the need for consents. Bill streamlining Resource Management Act now at select committee, due to be passed by July 1. Drinking water and air quality standards to be reviewed in longer-term stage two of Resource Management Act reform.

* * *

12 Fast-track big projects

Idea: Taskforces to manage regulatory approvals for major projects.

Outcome: Officials studying overseas models including possible taskforces.

* * *

13 Rule-making freeze

Idea: Cabinet directive to stop all new regulations unless approved by a minister.

Outcome: No action yet, but see (11).

* * *

14 Tourist marketing fund

Idea: Co-funded state/private $60 million fund to promote tourism.

Outcome: Extra $2.5 million, matched by Air NZ, to attract tourists from Australia; and $250,000 for a feasibility study on an Auckland convention centre. Tourism Minister John Key has said there "won't be a big boost" for tourism in the Budget but "over the next few years the Government will put more into the pot".

* * *

15 Energy and water

Idea: Accelerate energy, environmental and water initiatives.

Outcome: Home insulation package in Budget. Five-year extension of tax exemption for offshore oil and gas exploration; $36 million fund over three years to subsidise biodiesel production; energy strategy under review to encourage more electricity generation. Water strategy due in next few months.

* * *

16 Streamline consents for electricity projects

Idea: Accelerate electricity grid investment by raising threshold requiring Electricity Commission approval from $1.5 million to $50 million.

Outcome: Threshold for commission approval raised to $20 million.

* * *

17 Working capital guarantee

Idea: Extend Export Credit Office guarantees to domestic firms needing working capital for confirmed orders.

Outcome: Officials working on plan, may be in Budget.

* * *

18 Revise state purchasing policy

Idea: Revise procurement guidelines to ensure they don't disadvantage local providers by stipulating firm size or track record.

Outcome: Review under way as part of "value for money" public sector review, may be in Budget.

* * *

19 Super-charged debt market

Idea: Longer-term bond issues; streamlined reporting and disclosure requirements.

Outcome: New 12-year government bond launched on May 4.

* * *

20 Equity growth fund

Idea: A fund to allow institutional investors to invest in small and medium enterprises.

Outcome: No action yet.

* * *

21 Financial literacy

Idea: Banks to take educational initiatives to improve their customers' financial literacy.

Outcome: Bankers Association still working on educational material.