Storm continues over NZ labour bill

April 24, 1991

By David Robie

AUCKLAND — Thousands of New Zealanders have taken to the streets recently as unpopular labour and social welfare reforms by the government draw a bitter backlash.

The country's century-old industrial relations system is due to be replaced by a controversial new law on May 1. The government has been accused of arrogantly choosing the international day of worker solidarity to launch the Employment contracts Bill, which will strip unions of traditional rights.

The labour market has been tightly regulated by an industrial conciliation and arbitration system since last century. The new bill will be radical in its impact on workers.

The measure is believed to go further towards deregulation than the legislation of any other Western country — including the United States, where unions at least enjoy legal recognition if workers choose to join them.

Features of the old system to be removed include monopoly union rights to bargain for workers' wages and conditions; special legal recognition of unions (they become incorporated societies); compulsory membership determined by three-yearly ballots; and awards imposing coverage on workers and employers not involved in negotiations.

In the new system, agreements will cover only direct parties to negotiations. Workers and employers can negotiate either individual or collective contracts and may appoint bargaining agents.

However, the legislation fails to include any procedure for appointing bargaining agents. Critics say employers will legally be entitled to block collective bargaining and force workers into individual contracts.

Teachers, health workers, civil servants and other usually restrained groups have staged one-day strikes and headed protest rallies. Many of the country's 180,000 unemployed have also protested.

The protests have been the biggest since the country was split by the South African Springbok rugby tour in 1981.

Government weakened

Prime Minister Jim Bolger's cabinet, already besieged by protests over drastic changes to the welfare system which were introduced at the beginning of April, has been hard pressed to defend the policies.

Speeches by labor minister Bill Birch and finance minister Ruth Richardson drew a sharp attack from former PM Sir Robert Muldoon, now a backbencher in the conservative National government. He accused Richardson of making the "usual claptrap of cliches and slogans", adding that if the government did not change its policies or defeat.

Although the government has a 70% majority in the 97-seat parliament, it won this with barely 48% of the vote in the general election last October. ??? latest poll.

Birch accused protesters of "selfishly ignoring" the country's economic plight and claimed the unions were distributing "propaganda and lies" to their members. Police minister John Banks was booed and jeered at a rally when he declared that the days of compulsory unionism were over and that "useless" unions would go out the back door.

Opposition leader Mike Moore declared "If I was a teacher, I would be out on strike" and pledged to repeal the legislation if Labour were re-elected. He accused the government of attacking a fundamental social consensus built up over generations.

"What we are going through is a counter-revolution of epic proportions", Moore said. "It is a counter-revolution that hits at where New Zealanders live."

NewLabour Party leader Jim Anderton also made a bitter attack on the bill.

Addressing protesters, Council of Trade Unions president Ken Douglas said: "It takes away all previous protection that the union has been able to establish. It gives employers the right to lower our wages, worsen our working conditions and to tell you that you either accept their conditions or get the sack."

Cabinet members deny this, but have been at a loss defending the legislation in public. In a heated television exchange, Douglas challenged Birch to show any guarantee in the bill that employers could not slash wages or sack staff. Birch was unable to answer.


Under the previous Labour government, New Zealand embarked on the most radical free-market reforms of any industrial country. But there has now been no net growth for the past five years, and the country is currently suffering the worst recession of any OECD member.

For many, Rogernomics — named for Sir Roger Douglas, who was then finance minister — became discredited. Prime Minister David Lange sacked Douglas in 1988, before himself resigning a year later.

This failed to save Labour at the last election, and the Bolger government has re-embraced Rogernomics. However, since earlier this year, the government has appeared increasingly frayed.

The choice of former defence secretary Denis McLean, a bitter opponent of NZ's popular nuclear-free policy, as ambassador to Washington in March provoked strong condemnation. Then disclosures that many senior civil servants were earning salaries nudging $200,000 a year while the government was slashing benefits paid to single parents, sickness pensioners and the unemployed by up to 35% stirred bitter resentment.

But it is the labour legislation that has stirred the most anger. "United we bargain — divided we beg" and "For sale: your job — to the lowest bidder" are among the slogans adopted by unions trying to defend their membership.

Many workers see everything they have worked for in life as under threat. More than 700,000 workers belonging to 92 unions in a population of 3.4 million will be affected.

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