Unionists meet with new Prime Minister

Prime Minister Elect John Key met with trade union leaders yesterday and, according to the Dominion Post, won a crucial assurance that National will look at their KiwiSaver changes that would penalise low-income savers.

Brenda Pilott from the public services union and Peter Conway from the Council of Trade Unions are understood to have lobbied for changes to National’s Kiwisaver policy to favour workers on lower incomes. The unions have proposed that, if Kiwisaver must be cut, then it be done by keeping it a 4+4 scheme but capping employer contributions at $20.

Click on the link below for a full analysis of what unions are proposing for Kiwisaver http://www.thestandard.org.nz/unions-offer-better-option-for-kiwisaver-changes/

They also discussed National’s plan to cap spending on the public service. Brenda Pilott said that while the PSA fears for members’ jobs, that John Key indicated yesterday that he wants to retain the public service at about the size it is now, but not see further growth.

John Key has confirmed that he will continue to meet with union leaders regularly.

Greek bankers win international support for the right to bargain

Greek bank workers are currently campaigning to retain pension schemes that they previously negotiated with their employers, but which Greek law now undermines.

The Greek government, concerned at demographic changes and the future viability of pension schemes, changed the law in 2005 to allow unilateral cancellation of these schemes.

In response, the Greek Federation of Bank Employee Unions, with assistance from UNI, took a complaint to the International Labour Organisation (ILO).

The ILO is a United Nations agency which promotes social justice and labour rights agency.  It is made up of government, employer and trade union representatives.

It ruled that the Greek government’s actions were a breach of ILO Convention 98 protecting workers’ right to bargain collectively.  The ILO has called on the Greek government to stop all interference with the negotiated pension schemes in banks and to bring together unions and employers to agree jointly on the future of the schemes (i.e. to negotiate a solution instead of impose it).

(thanks to reedcat for the photo)

Reserve Bank members win 2% KiwiSaver subsidy

Finsec members have just reached a settlement with the Reserve Bank after two days of positive negotiations. The new two-year agreement will see a pay rise of 3% in the first year and 3.5% in the second.

A feature of the agreement is that the bank will lead the finance sector by introducing a 2% subsidy, worth about $1000 in employer contributions, for Finsec members who opt into KiwiSaver.

KiwiSaver is a government initiated retirement savings scheme that starts on 1 July. It begins with a $1,000 tax-free contribution from the government. Anyone aged 18-65 will be able to join a KiwiSaver scheme. They can contribute either 4% or 8% of their gross wage or salary to KiwiSaver, and employers (such as the Reserve Bank) have the option to pay some of that 4% 0r 8% through an employer subsidy. Workers will also be able to use their KiwiSaver savings as a deposit to help purchase a first home.

(Dank je wel Jukkie voor de foto)

Business Tax Review should look at employee savings

A guest comment by CTU Economist, Peter Conway

There is also now considerable speculation about the options for the Government around tax and savings. Unfortunately, it appears as if a major opportunity to boost savings is about to be lost. The outcome of the Business Tax Review is probably going to see a reduction in company tax plus some tax credits. It is true that the tax credits have some merit as they reward investment in R&D, export market development and skills. The CTU submission opposed a direct cut in company tax and gave qualified support to some tax credits. However, comments made by Peter Dunne have confirmed that a cut in company tax is very likely. But both the NZ Institute and the CTU submitted that the Business Tax Review was a significant opportunity to introduce compulsory employer contributions to KiwiSaver.

Say there was a cut in company tax of 3% and on top of that a further cut of 3% linked to compulsory employer contributions to KiwiSaver or exempt schemes. This would not only supercharge KiwiSaver; it would lift savings, boost domestic capital with flow-on effects into the capital account and also take a bit of the load off monetary policy. Business could not complain as they would already be getting a substantial cut in company tax. And it is much easier to do than try to divide a relatively small cut in personal tax into two parts: one for consumption and one linked to compulsory employee contributions. Remember the Australian system is based on compulsory employer contributions.

There is one major technical problem which is that superannuation contributions are based on payroll whereas company tax comes out of profits, so a 3% cut in company tax offset against compulsory employer superannuation contributions would have a variable impact on firms. A softer approach would simply allow firms to offset any employer contributions against a capped level of company tax (say 3%).

However, this is all speculative as the Business Tax Review does not appear likely to address any of this! If the Government can get the right mix of policies around tax, savings, and wages then we will be well on the way to addressing the major structural problems the economy faces. But doing this in a way that meets the tests of political popularity, and impact on monetary policy and maintaining strong support for the public sector is a challenging task!

Irish bankers take action over pensions

A good humoured picket line of Amicus members was maintained throughout a wet and windy day at Bank of Ireland yesterday. The union’s action against the bank’s ‘tearing up of the negotiation process’ over its proposed new pension arrangements was the first at the bank’s head office building in over a decade.

“Pensions are supposed to be for a rainy day, so the weather was fitting, yet over 400 members have turned out today to make their voice heard on the pension’s issue,” said Amicus National Officer, Jerry Shanahan.

The Irish Bank Officials Association, which represents the majority of bank staff, has deferred a ballot for industrial action on the proposed new pensions pending a labour court ruling on the row.

(thanks to gloop.gristle.turnip.spicewar.shevels for the photo)

Pension row at Bank of Ireland escalates

500 workers at the bank of Ireland, who are members of Amicus, have voted to go on strike over the bank’s proposal to weaken pension provisions for future workers. 8000 further workers who belong to the Irish Bank Officers Association (IBOA) will also vote whether to go on strike next week.

Meanwhile, the Services, Industrial, Professional and Technical Union (SIPTU) which represents over 200,000 Irish workers has withdrawn an €8 million account with the bank. It closed the account in protest at the bank’s plan to introduce a cheaper pension contribution scheme.

General Secretary Joe O’Flynn said “Banks have acquired an enormously powerful position in our society, which they have already abused in relation customers. The Bank of Ireland now proposes to drive a coach and four through the industrial relations procedures … in order to save even more money at the expense of its own employees and future pensioners. It is… ironic given huge profits it makes from handling the funds of numerous other pension schemes.”
IBOA and SIPTU are also considering asking hundreds of thousands of these members to close accounts with the bank.

(thanks to JRodrigues for the photo)

Irish bank workers vote on industrial action to protect pensions

Workers at the Bank of Ireland, who are members of either the Irish Bank Officials’ Association or Amicus are currently voting on whether to take industrial action to protect the pension entitlements future bank workers.

Most current Bank of Ireland staff are guaranteed a pension of two thirds of their salary when they retire. The bank wants to remove many of these benefits for future employees. [And here is a realplayer video].

It will be a brave decision for Irish bank workers to take industrial action when the bank’s proposal will not impact upon their own individual pensions. But they will also be aware that the existing pension scheme was won for them by the campaigns of previous union members and that their actions will affect the still distant retirements of many of their future colleagues.

(Thanks to sillydog for the photo)

An American union fable

A month ago the New Yorker published what appears to be becoming a widely discussed story on the need for unions to politically campaign for provisions that benefit all workers and their communities.

The story set in 1950, is about Charles E. Wilson, The president of General Motors and Walter Reuther, the national president of the United Auto Workers Union.

While bargaining with Reuther, Wilson, for the first time, offered every G.M. employee health-care benefits and a pension.

Reuther was opposed to the offer.

“His inclination was to fight for changes that benefited every worker, not just those lucky enough to be employed by General Motors… In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible.”

However the workers eventually accepted the offer and GM established a private pension scheme.

That scheme is now buckling under its own weight and GM is in serious financial difficulty.

“Over the past few years, American taxpayers have been put at risk of assuming tens of billions of dollars of pension liabilities from once profitable companies. Hundreds of thousands of retired steelworkers and airline employees have seen health-care benefits that were promised to them by their employers vanish. General Motors, the country’s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises.”

The New Yorker makes the point that individual American companies cannot guarantee ongoing health care, superannuation and social welfare. But workers in European countries as well as New Zealand, Canada and Australia do have a better guarantee of these services because they have campaigned politically for them to be provided universally, by the state, rather than by individual companies.

(Thanks to lslphoto for the photo)