Archive for the 'Economy' Category

Jobs central to pulling world economy out of danger zone

UNI, the global union of which Finsec is a member, is calling on the G20 meeting of world leaders to put jobs at the centre of an economic recovery programme.

UNI General Secretary Philip Jennings said “Workers’ rights and job creation are key to a recovery. President Obama had it right when he said that collective bargaining should be part of a drive towards a fairer and more just economy. However, the reality is that the G20’s negligent procrastination and limited ambition has once again opened the door to greed and self-interest amongst the banking fraternity while tens of millions faced wage cuts, job losses, and poverty.”

UNI and other unions are calling on the G20 to set up a working group on employment and social protection, invest in infrastructure and green jobs and launch a youth pact guaranteeing young people quality employment and education.


Rising costs hitting low and middle income earners hardest

Council of Trade Unions economist Dr Bill Rosenberg says that inflation doesn’t really show the full price rises faced by low income households, and that lower income people are hardest hit by increased costs.
Rosenberg explains that they are hit differently because a bigger proportion of low income’s people’s spending goes on necessities than it does for high income people.
The 30 percent of households with the lowest income spend 15.1 percent of their expenditure on fruit, vegetables, meat and fish, and grocery food. The top 30 percent in terms of income spend only 10.9 percent of their spending on these items. When it comes to housing, low income people spend 30.7 percent of their expenditure, while high income people spend only 23.6 percent on housing.
Worth thinking about, if people claim that the tax cuts compensated for inflation and GST rises – maybe not, for those on a low or middle income!

Low wage rises overtaken by inflation

The rise in the Labour Cost Index of 1.9 percent in the year to June shows wages are still falling behind inflation of 5.3 percent says Bill Rosenberg, CTU Economist, and even behind price rises other than the GST increase.

“This will make people more determined to ensure their wages do not fall in value. While there is a welcome increase in the number who have had increases during the year (rising from 56 percent to 58 percent), with a median of 2.9 percent, most have had increases less than inflation, and many people (42 percent) have not had wage increases at all during the year,” said Rosenberg.

“Collective agreements are consistently one of the most important reasons (combined with cost of living and keeping up with market rates) for pay rises. This underlines the importance of collective agreements negotiated by unions in ensuring wages do rise as the economy improves.”

The gender pay gap in the average wage is 13 percent.

Trans-Pacific deal no good for finance sector

Finsec Campaigns Director Andrew Campbell has spent part of this week as a union observer at the talks for the Trans Pacific Partnership Agreement (TPPA) at Sky City in Auckland.

Campbell said that while the TTPA was being touted as a trade agreement, in reality the TPPA was about giving special rights to foreign investors and companies.  If these negotiations succeed they will create a mega-treaty across 9 countries that will put restrictions on what policies and laws our governments can adopt for the next century – including regulating the financial sector, GM labelling, foreign investment laws, price of medicines, and even NZ content on TV.

“While most countries are strengthening rules around how banks operate, a TPPA could straightjacket New Zealand with the weak rules that saw us labelled the ‘wild west’ in the 1990s and, if Washington’s financial lobbyists have their way, will allow Wall Street to bring down the US economy again,” said Campbell.

Many unions and other community organisations are working together on a campaign against the deal. Check it out at the link below:

Unemployed present human face to bankers

Unemployed workers in Wellington did a tour of banks – the Reserve Bank, Westpac, ANZ and BNZ to show the human side of unemployment.

After a BNZ economist said that unemployment was ‘artificially low’, unemployed people wanted to send a message that job loss was devastating for families and communities – and more than a statistic.

Finsec General Secretary Andrew Casidy said that banks needed to show an interest in employment. “They can show this through their own employment practices, by investing in jobs when their profits are rising and not sending jobs offshore. They can also show this to their customers with fair interest rates.”

“The banks need to recognise the human cost of unemployment,” said Casidy.

Finsec tells BNZ: unemployment more than a statistic

Finsec said this week that BNZ economists who described 2008 unemployment as artificially low should spend time with those looking for work to better understand the full impact of being jobless.
Finsec campaigns director Andrew Campbell said unemployment was more than a statistic. “They are people struggling to support themselves and their families.”
He also said that BNZ was contributing to the problem by adding to unemployment numbers. “Between 2008 and 2009 BNZ reduced its own full time equivalent staffing numbers by 149.”
“The recent global financial crisis has taught us that we need much greater balance in our economy. BNZ and other bank economists should stop trading jobs against inflation,” said Campbell. “Getting people back into work and the economy growing should be the number one focus for bank economists.”

Banks’ overseas funding still a problem with balance of payments

The Council of Trade Unions welcomed an improvement in New Zealand’s International Investment Position, but noted that banks’ overseas debt comprised three quarters of our net international liabilities.

“It appears that the Reserve Bank has been successful in beginning to wean the Big Four Australian owned banks off their short term borrowing habits, but not so successful in reducing their dependence on overseas funding,” said CTU Economist Bill Rosenberg. “That makes it more difficult for the Reserve Bank to control monetary conditions. The Reserve Bank should be considering more direct actions to control the banks’ overseas borrowing.”

Rosenberg cites the example of South Korea’s recent restrictions on the use of foreign currency loans and regulation on banks’ short term borrowing.

Aussie banks gouging billions on interest rates

New evidence has emerged that Australian banks are using the financial crisis as cover for charging borrowers more than their cost increases.

The Sydney Morning Herald analysed Australian Reserve Bank figures to find out how much borrowers are contributing towards bank profits – and revealed that someone with a three-year fixed rate home loan of A$300,000 pays a personal contribution to growing bank profits of between A$75 and $125. Overall, the increase in costs to banks was more than offset by interest rate increases.

Consumer advocacy spokesperson from Choice, Christopher Zinn said “It’s well documented that the large banks profited in various ways from the financial downturn, including taking market share from smaller competitors, and increasing their lending profit margins.”

This analysis is consistent with the multi-party banking inquiry held in New Zealand which concluded that the benefit of official cash rate reductions had not been fully passed on to customers.

We needed Robin Hood budget, but got Sherriff of Nottingham instead

With this week’s budget, the National Government has flipped the Robin Hood story and are taking from the poor to give to the rich, said Finsec General Secretary Andrew Casdiy.

“With international calls growing for a “Robin Hood” tax (a small extra tax on banks), and an urgent need to help ordinary Kiwis who are suffering as a result of the recession, the Government has got this budget badly wrong,” said Finsec General Secretary Andrew Casidy. Yes, there are across the board tax cuts – but the biggest cuts are being delivered to those on the highest incomes. They are simply unfair.”

“Our members see many families who are struggling to keep up with their day to day expenses even without a GST increase. National’s tax cuts favouring large corporates and high income earners will simply increase the divide between rich and poor in this country and make things even more unequal, which will be bad for everyone.”

“We need government to invest in jobs and in the social services that will help our most vulnerable through tough times. Instead, the wealthiest New Zealanders will benefit the most from these tax cuts – the very people who can best afford to contribute more to a fairer society.”

Obama’s Finsec-style plan for banks

A proposed international tax on banks is top of the agenda at this weekend’s meeting of finance ministers and central bank governors from the G20 countries.

President Obama has had a serve at Wall St this week as part of his campaign to introduce greater regulation, and said “A free market was never meant to be a free license to take whatever you can get, however you can get it.”

Barack Obama reiterated his plan for the same type of financial reform Finsec has been promoting for New Zealand for the last eighteen months. His proposals include:

• Limiting the size of banks and their risky transactions

• Providing more transparency of financial transactions

• A dedicated consumer protection agency

Obama went on to say “Some — and let me be clear, not all — but some on Wall Street forgot that behind every dollar traded or leveraged there’s family looking to buy a house, or pay for an education, open a business, save for retirement. What happens on Wall Street has real consequences across the country, across our economy.”

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