Dissecting the NZ job summit output – Top twenty

After reviewing the raw output from the 6 groups, let’s now turn to the published “Top Twenty” list, and some quick comments.

Job Summit – Top Twenty
Core Workplace and Employment Issues

1. Retain and Upskill – the nine day fortnight
Retain jobs by reducing wage costs while firms earnings are down. Retain jobs short and long term by upskilling workers. Possible focus on a nine day fortnight or maximum 6 week block release.

–> The nine day fortnight (or less) is a personal favorite, and one I’ve advocated before for both employees and employers. Why not make it even more flexible – down to even 6 day fortnights? The extra free time can be filled by entrepreneurial activities for those so inclined.
–> Sadly the move seems to be for Government to pay for the day off, which seems a bit rough. Why not just reduce the pay?
–> “Upskilling workers” is a motherhood statement, and comes with a very real cost. External training can run to the thousands per person day, and even internal training comes with logistical costs. Meanwhile you are paying workers to be trained.
–> Giving unpaid time off to go to universities and polytechs  is a potential winner, though many people do this already without taking the time out.
For all of these the concern is that those that earn less money are unable to afford the unpaid time away from work.

2. Intra-national migration achieved
Creation of a seasonal work marketplace that will remove barriers (information, infrastructure, qualifications/skills) between employers and seasonal workers.

–> This makes no sense to me. Isn’t there a decent private enterprise system for matching jobs and potential employees? Trade Me and Seek seem to be pretty good. Who would create and run this rather unnecessary extra marketplace – the Government?. Aren’t seasonal workers able to get jobs anyway? And what about the working holiday tourists – will they still be able to partially finance their journeys?

Skills and Transition
3. Keeping people in education and creating jobs through education and training
Expand group training programmes, review current apprenticeships models with a view to sustaining and expanding levels of training and introduce a training requirement as part of government procurement processes. Support summer employment for students, facilitating retraining and promoting the importance and value of education.

–> What are group training programs? They sound like they cost money (see 1:).
–> There has to be some room for improving the apprenticeship system, perhaps with decent Government subsidies for employers? The idea of paying very small amounts in exchange for training is fundamentally a good one. However I’m concerned that some trades which were wildly popular in recent times with the mining and housing led boom will have oversupply of workers going forward. The market will clear, but sometimes it takes time.
–> A training requirement as part of a Government procurement process would discriminate against some firms, especially smaller firms. As I said above training is expensive and smaller firms will find it especially hard, while all firms will find compliance bureaucratic.

Remove barriers and increase enablers/incentives to ensure that the education and training system is well-placed to meet current needs and opportunities including a specific focus on Maori/Pasifika people.

–> What are the barriers? You want to lower entry requirements? How wil tertiary institutions cope with this? Won’t this decrease the experience for those that can qualify? I had always thought we were pretty good on this front, and very good when it comes to reaching out to all cultural groups. This feels like a land grab, and we’ve had years of working on this already.

–> What I would like to see is the return of (the tiny) payments to study. I used to get $80 per week to go to university in Palmerston North, but then I’m living in the past.

4. Improve matching of supply and demand for training
Improve identification and matching of clearly identifiable job opportunities in the short and medium term by industry groups to direct future education and training priorities.

–> more training. Please – we get the story, but really, it is not generating income i nthe short term. Who would do this? What is wrong with allowing market forces to determine what training gets used? – individuals will choose training that gets them a job. Meanwhile there is plenty of information about in training courses – try Google, or maybe someone can do a quick start up for $5000.

5. Redundancy and transition support programme
Improve support for people about to be made redundant or who are unemployed to help them transition to new work opportunities and training including:
-Particular focus on those most vulnerable
– Income assistance
-Enhanced industry partnerships
-Auditing, integrating and streamlining
-Improving information and access to services

–> Good – we need to make sure the safety net is there when people fall. We also need to make sure we don’t create thousands of consultants or push people into fields that are politically popular but not sustainable in the log term.
–> However those bullets raise more questions than they answer – what does “collaboration” mean? What does “Auditing, integrating and streamlining” mean? Surely we are pretty good at this stuff these days? This feels like layers of bureaucracy to me.

Maori Economy, Local and Regional Government
6. Enhanced utilisation of iwi assets
Creating new employment in the primary production sector by bringing Maori land and water based assets into higher value export focused productive use.  This may involve accessing existing business support, legislative/regulatory review and active facilitation of intra-Maori partnerships.

–> This wasn’t (like a few of the top 20) in the group break out output, and it is certainly interesting. It does sound a bit like planting trees, farms, tourism and factories on Iwi land – a business-first solution with obvious issues. It’s a good idea, but we have to remember that Iwi are in charge of their own resources and while outsiders can encourage and offer to invest, it is up to the Iwi to determine their own future.

Investing in projects that support Maori kinship -based infrastructure, including iwi-led housing projects, innovative approaches to existing state housing stock, and marae development.

->This new idea could be really interesting, a good use for infrastrucutre spending.  It is hard to tell whether government funds is the idea or not. This coulkd be lousy or fantastic, with the devils are in the details.

7. Government systems
Ensure that government services to Maori deliver effective results.

–> motherhood, apple pie and useless as an action. What does this really mean? What have we been working on since 1984?

8. Urgently develop and implement new sources of bond funding
Aggregate local government debt to gain access to debt funding at lower than current interest rates. Also, prioritise New Zealand investment plan across central/local government, that ensures a job creation focus, incentives for expenditure, quality spend that best positions New Zealand for medium to long term and avoids competition for capacity and capability.

-> Will aggregation help – or is it that local government finances are the issue here? Aggregating (mortgage) debt to get higher credit ratings and lower interest rates is exactly what got us into this mess in the first place, while spreads for NZ and local government will be high regardless.
–> If aggregation is a good thing, then why has nobody in the private sector done it already?.
–> Prioritising local government investment is done by local government, and I am not so sure how much extra they have in their pockets.
–> I’m concerned about any statement that has the words “avoids competition” – tending to think that competition is a good thing resulting in cheaper, higher quality results.

9. Reduce regulatory compliance costs and impediments
Adopt a permissive approach to increase the range of permitted activities in e.g.  building and housing, food safety. Enable local government to determine appropriate level of consultation.  Seek a moratorium on drinking water and air quality standards. Improve practice in council processing of regulatory consents.

–> This is the anti-environment clause, and the again the devil will be in the details of this. While I do not doubt that regulation has gone a bit far and is certainly cumbersome, the idea of reducing our water, food or environment quality for a quick buck is one that will fail in the public domain. Food safety in particular is everything for NZ’s economy – we cannot afford to compromise.

Helping firms survive
10. Big projects fast track
Establish a taskforce(s) to report directly to a relevant minister to anticipate and actively manage approval and regulatory processes for major and/or complex processes.

–> I do like this idea – make it quick and easy for big projects to be approved – or not approved.
–> Muldoon called this Think Big, but this looks to be more of “enable private sector to Think Big” which makes sense.
–> This overlaps with #14

11. Rule-making freeze
Cabinet directive issued to government agencies/regulators to stop all rule and regulation making or extension, unless specifically approved by the minister.  Reduce all enforcement activity to focus on minimum acceptable standards (rather than ‘nice to haves’) and the overall immediate interest for New Zealand.

–> Easy, but will it make a difference? Rules will be made as new information comes to light.
–>How about a “Relentless Rule Removal” campaign – much like the Great Qango hunt in earlier times?  That’s something I could buy in to.

12. Boosting tourist traffic co-fund
Establish a government/private co-funded $60 million fund to support initiatives to increase visitor numbers targeting 1% global market share, through short and long haul promotional activity, domestic tourism promotion and targeted infrastructure development.

–> an interesting idea but $60m is pissing in the ocean for such a big industry. Pushing on airports to reduce landing fees, fast-tracking Australia/NZ domestic travel status and so on would be more effective. We are actually pretty good on a lot of this stuff already.

Business Investment
13. Accelerate energy, environmental and water initiatives for employment and productivity improvements
–> That’s a good idea. It overlaps with #9, #10 and #14 – between big projects and training this list has some recurring themes.

14. Streamline regulatory approval processes for major projects
Accelerate transmission grid investment by increasing threshold for Electricity Commission consideration of electricity projects to $50 million. Allow longer wheel-based trucks and heavier loading. Establish taskforces reporting to a minister for vetting major infrastructure investment proposals and ensuring regulatory processes are quickly and consistently completed.

–> Another good idea, which oddly seems a bit specific for electricity. I really like the taskforce based approach to large investment approval, together with aggressive timetables for decisions but aggressive reaching out to stakeholders.

–> what about the smaller stuff – making it easy for individuals and small businesses to sell back to the grid. Let a thousand generators blossom
–> what about smart metering. Great for infrastructure (we can make them here – and by we I mean Textmate could, and with no ongoing telco costs), but even better to help us each use less power.

15. Access to working capital delivered via an extension of the Export Credit Office
Extend the Export Credit Office to also apply to domestic firms that need cash flow funding for completion of confirmed contract orders.

-> This is a big one as the ECO does extend a lot of credit to Exporters. Extending it to domestic circumstances does seem pretty hard as we are now essentially creating another bank.
–> What about extending the mandate (and backing) of Kiwibank to aggressively target SME’s instead?
–> Why just contracts? What is a contract? How do you assess counterparty risk? Why not on accounts receivable as well? Why not for importers as well?

16. Level the playing field to NZ firms for local and central government procurement
Revise procurement guidelines to ensure they do not bias against local providers by stipulating a specified firm size or track record.

–> Yes, this is good. The track record one is amusingly and frustratingly Catch-22 – you can only supply if you have supplied before. The GETS system does need some work to be fair to smaller providers. Even the application process to view tenders is convoluted, seeming more to push you away than let you in.

Firm Funding
17. Super-charged debt market
Possibilities include streamlining reporting and disclosure requirements, long term bond issues, involvement by a wider range of organisations such as local government.

–> Yes – I’m all for better disclosure and the like.
–> Are we large enough to support a debt market like this? Who will rate the bonds – the discredited agencies?
–> Who makes the market? Who does this really benefit?

18. Government/bank equity investment fund
Develop an equity growth fund to allow large institutional investors access to quality investments in the SME sector that are currently unavailable to them.
–> This has potential, though the language is a little scary. Those large institutional investors have always been able to invest in SMEs if they want to – but they seem unable to do so. Meanwhile SMEs find it hard to get funds to grow – banks may lend on balance sheet items but not on P&L prospects and business plans, and that credit will tighten through the year.
–> But the details matter. Who will run the the funds? How do we adapt lending criteria to adjust for SME’s? Are we talking equity as well as debt? Most of all, what people will be involved?
–> And a related question – How many sustainable jobs have the VIFs created through their investments? By sustainable I mean that the firms are profitable and no longer need to be supported by investors.

19. Commitment by banks to providing capital to NZ firms
Banks and Government co-fund partnership for preferred equity, financed by bank and government equity, leveraged with debt funding.
–> Sure , but as long as the Government has equity in the deal and or the banks. This is what the banks should be doing on their own, and again the devils are in the finer details.

20. Banks to significantly invest in financial literacy
Investing in educational initiatives to improve the financial literacy of their customers with a focus on SME businesses

–> This is a bit too stable door for me, but always good. Are banks not doing this already? If not then why not? Being the trusted advisor on all things business is after all a great way to identify and close on opportunities.

Overall an interesting top 20, with maybe a few goers in there but a few losers as well. There are overlaps, and gaps, but it is a good continuation from the group outputs, tightening up some of the ideas, dropping many of them and substituting some good new ones. But it’s still pretty raw, and there is a long way to go from here to tangible actions.

So what does Government and industry do with this all? and what else will emerge from the individuals that were there?

Both Bill English and John Key gave speeches at the conclusion of the event, and there has more output after the event. Nowhere in these two posts, for example, have we seen the NZ bicycle track idea (something that I’ve seen kicked around for a while – including at FOO) but somehow it emerged as one of the lead stories.

So next up let’s look at the subsequent output in another post. In a day or four.

Published by Lance Wiggs