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A week in advocacy 

Wage arrears looming for employers
A recent Employment Relations Authority decision could mean many businesses liable for wage arrears.   Catering company Gate Gourmet claimed wage subsidies and gained staff agreement to receiving 80% of normal wages during lockdown, as required by Govt, but this equated to less than the minimum wage and therefore breached the Minimum Wage Act.  The ERA has now ordered Gate Gourmet to pay arrears for the difference between the subsidy and the minimum wage.  Potentially thousands of businesses paid only the wage subsidy or paid less than the minimum wage during lockdown and may now be liable for significant arrears.

Smart re-opening of borders needed
NZ needs a smart re-opening of borders, but is moving much more cautiously than other countries, argues analyst David Skilling.  NZ last faced a shock as big as Covid in the 1970s - oil shock and loss of UK markets - and responded poorly, leading to a distorted, weak economy.  NZ needs to do better this time, in an outward-looking way: 'Fortress NZ'  won’t work.    More testing, user-pays quarantine for international students and foreign workers, and travel bubble agreements with selected countries are needed, he says.

Rethink immigration after Covid
NZ should rethink immigration once Covid-19 is over, NZ Institute of Economic Research says.  In the past we’ve tended to import trained people from overseas rather than increasing the skills of NZers, and we’ve also imported many low-skilled foreign workers for jobs that could be done by NZers.  This has biased investment toward low-skilled, labour-intensive production, away from high-skilled, capital-intensive approaches, making our economy weaker, NZIER says.  “We should consider the skills and people we want to welcome when the migration tap is turned back on.”

Rethink foreign investment too
Draft amendments to the Overseas Investment Act will help facilitate some foreign investment, says BusinessNZ.  The amendments would mean fewer investments having to be screened, simplified consenting requirements, and less focus on lower-risk investments.  But they would also put extra conditions on some foreign companies investing in NZ e.g. those extracting and bottling water - unnecessary duplication since those conditions already apply under the Resource Management Act. Better policies on overseas investment are needed to help the NZ economy recover from Covid-19, BusinessNZ says. 

National’s plan to get NZ working
National outlined the first part of its economic and employment policy to the Canterbury Employers Chamber of Commerce yesterday.  Leader Todd Muller said a National Government would not raise  taxes or cut benefits and would keep borrowing as low as possible for Covid-19 recovery.  He said National would reform the Resource Management Act and Building Code, invest in infrastructure and training, and reinstate regional polytechnics.

Power of cloud 
The Covid lockdown revealed the power of cloud computing, says Xero.   Research during June found 42% of small businesses wish they’d had better technology in place before Covid hit, and nearly three quarters had to make quick changes to their technology to keep the business functioning during lockdown.  Prior research showed 65% of small businesses increased productivity after moving to cloud-based tools.

Election Conference 
Registrations are now open for the Deloitte-Chapman Tripp-BusinessNZ Election Conference.  Party leaders and other politicians pitch their policies for business and the economy to a business audience, in the leading event of the election campaign.  Attendees can connect with the politicians through interactive panel discussions and networking sessions, and the Conference will reveal the results of the Election Survey of over 1,000 businesses.  You can register here.

Driving innovation through digital
Supporting businesses seeking to upgrade their digital performance, EMA is running webinars on developing digital skills for manufacturing and other businesses during Techweek 27 July – 2 August.  The webinar events include Growing Manufacturing Capability Through Technology, and The Race to Digital Under Covid.  Companies wishing to take part can register here.

 

Business Update is a weekly update of activity and advocacy by the BusinessNZ Network

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