Acting Prime Minister Winston Peters suggested yesterday that public sector unions were seeking wage rises now because they believed the coalition would be more likely to pay than the previous Government.

Meanwhile, BusinessNZ is warning of a drop in business confidence – raising questions about whether like the Clark Government, the Ardern Government faces a first-year winter of discontent from business.

Staff at both the Ministry of Business Innovation and Employment and the Inland Revenue Department have voted to strike for two hours on July 9 and July 23.

The IRD strike has been exacerbated by the need to implement the “Best Start” addition to Working for Families which will give eligible families up to $60 a week for all babies born after July 1.

PSA members at Inland Revenue have not taken industrial action in 22 years, and PSA National Secretary Erin Polaczuk says this shows they are at the end of their tether.

“To give just one example – Inland Revenue’s system is unable to process the Best Start tax credit.

“It starts on 1 July, and members are told they will have to process this manually, drastically increasing their workload.

“To have all this happening while the employer refuses to consider a modest across-the-board pay increase is deeply upsetting to our members.”

At the same time, mediation between the New Zealand Nurses’ Organisation and the District Health Boards ended yesterday without agreement as the boards try to avert strike action proposed by the nurses for July 5, with notice of a second 24-hour strike planned for July 12 likely. 

Both the boards and the nurses are have now asked the Employment Relations Authority for urgent facilitation. This involves the Authority making a recommendation for settlement.


Meanwhile, DHBs are continuing to implement contingency plans to ensure emergency and essential services are available if the strike goes ahead.

Peters said the Government was not unsympathetic to the workers.

But he seemed to agree that unions would regard the Government as an easier target than its predecessor.

“I suppose you tend to go to a bus stop where a bus does come by,” he said at the weekly post-Cabinet press conference.

While the public sector strike action has so far shown no signs so far of spreading to the private sector, Business New Zealand, yesterday issued a warning about business confidence.

The Government has been dismissive of business confidence surveys with Economic Development Minister, David Parker, calling them “junk”.

The surveys present a dichotomy.

On the one hand business activity is buoyant.

Consumer confidence is high.

But on the other, business confidence is falling.

BusinessNZ Chief Executive Kirk Hope says the economy is forecast to grow at around 3 percent out to June 2020, but there are risks to achieving this.

Both domestic and international, these are combining to keep business confidence in the doldrums.

“Policy uncertainty and some ad hoc changes are likely to be driving this continuing nervousness,” Hope said yesterday.

“These include the political, rather than economic, rationale for effectively banning the issuance of future offshore oil and gas exploration licences.

“The jury is still out on whether the range of Taskforce and Working Groups set up will provide consistent policy outcomes that promote increased business competitiveness.

“And though the agricultural sector is enjoying higher lamb and dairy prices on the back of improved global demand, the outbreak of mycoplasma bovis will affect productivity.”

Finance Minister Grant Robertson told TVOne’s “Q+A” at the weekend that business confidence falling shortly after they were elected was not new for Labour Governments.

“If you go back historically on business confidence data, this happens,” he said.

“It doesn’t necessarily match up with GDP growth, which has actually been historically very good under Labour-led governments.

“We just have to keep working together on these relationships.

“We’ve got a number of work programmes underway that the business community are absolutely critical to, the future of work area that I’m working on.

“Some of the industrial relations changes. We know we have to work as a partnership.”

Peters, however, seemed resigned yesterday to low business confidence figures, at least for the short term.

He said he wasn’t expecting any immediate pickup.

“There is a certain comment line out there that suggests that a Government, where it involves Labour and New Zealand First with the Greens as backup partners, is not to be relied upon in running the economy,

“But we will turn that around, and we already have in my view by what is a very sound budget surplus and forward projections in what are very difficult times, whilst addressing huge areas of deficit that haven’t been addressed in the last nine years,” he said.

“I have seen this in this country and other countries before but we are going to work our way through it and gain their confidence, and as I have pointed out to the business community all over this country, there is more money awash in this economy this year than they have ever seen before and if you can’t make some of that then maybe the first place to look is in the mirror.”

When Peters said, he had seen this (drop in confidence)  before he was presumably referring to the so-called “Winter of Discontent” in 2000 when business made it clear that they opposed the Clark Government’s plans to repeal the Employment Contracts Act and raise the minimum wage.

Peters has previously blamed the Round Table for that mood among business.

But Helen Clark and Michael Cullen front footed the business community by continually visiting and addressing business groups.

Cullen subsequently said that those speeches led business to eventually conclude that Labour was not proposing a return to “some antiquated form of socialism”.

This plan may be being revived. This Friday Peters will speak to the Otago Chamber of Commerce.