Our new coalition government.

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#2436129 11-Mar-2020 09:16

MikeB4:

@GV27 I am long time National supporter and was a member for some time. I have become saddened and disillusioned by this dinosaur and the inept leadership it currently has in place. I see no viable leaders in the top ten of the line up.

I am closer than ever to voting Labour in this years election.

The moral quandary I am facing is do I vote for the regressive, do-nothing approach of the 2000s to stop a terribly overblown, poorly planned transit project in Auckland that no one, not even public transport advocates, actually wants and otherwise general political paralysis?

These are both bad options IMO.

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#2436157 11-Mar-2020 09:53

Depending how the impending recession plays out some of the large projects may have to go on hold for a bit.

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#2436188 11-Mar-2020 10:09

I don't work in a business that pays minimum wage, but I can tell you that business is already suffering generally, and it hasn't really even "hit" here yet.

*Delaying* things which may put businesses under even more pressure seems like a reasonable thing to consider, if the alternative is the business failing altogether and laying off ALL their staff. It might be a somewhat minor extra expense in your mind, but it all counts, especially if sales are down as well.

Businesses have increased their pricing to end-users as a result of the last changes, to try and avoid reducing staff numbers, but trying to increase pricing during a time of financial insecurity is going to be a struggle.

There have already been reasonably significant increases under this government, which I do support, but I feel it happened to big and too fast. Delaying the last increase was what recommended at the time the policy was announced and is supported by a number of economists too.

We were out for dinner last night in an area where we could see 4 restaurants as well as our own, and we were the ONLY customers in any of those restaurants. They are really hurting badly. We ended up in a discussion with 3 owners, 2 of them say they have about 10 days of buffer, and if things don't improve, they will be gone.

It's not about screwing the poor minimum wage workers in this instance.

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#2436190 11-Mar-2020 10:13

networkn:

I don't work in a business that pays minimum wage, but I can tell you that business is already suffering generally, and it hasn't really even "hit" here yet.

*Delaying* things which may put businesses under even more pressure seems like a reasonable thing to consider, if the alternative is the business failing altogether and laying off ALL their staff. It might be a somewhat minor extra expense in your mind, but it all counts, especially if sales are down as well.

Businesses have increased their pricing to end-users as a result of the last changes, to try and avoid reducing staff numbers, but trying to increase pricing during a time of financial insecurity is going to be a struggle.

There have already been reasonably significant increases under this government, which I do support, but I feel it happened to big and too fast. Delaying the last increase was what recommended at the time the policy was announced and is supported by a number of economists too.

We were out for dinner last night in an area where we could see 4 restaurants as well as our own, and we were the ONLY customers in any of those restaurants. They are really hurting badly. We ended up in a discussion with 3 owners, 2 of them say they have about 10 days of buffer, and if things don't improve, they will be gone.

It's not about screwing the poor minimum wage workers in this instance.

It is a fine line to walk. If the minimum wage review is delayed this may actually worsen the impending recession as it may affect spending power.

Mahon

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Ultimate Geek

#2436296 11-Mar-2020 11:54

MikeB4:

networkn:

I don't work in a business that pays minimum wage, but I can tell you that business is already suffering generally, and it hasn't really even "hit" here yet.

*Delaying* things which may put businesses under even more pressure seems like a reasonable thing to consider, if the alternative is the business failing altogether and laying off ALL their staff. It might be a somewhat minor extra expense in your mind, but it all counts, especially if sales are down as well.

Businesses have increased their pricing to end-users as a result of the last changes, to try and avoid reducing staff numbers, but trying to increase pricing during a time of financial insecurity is going to be a struggle.

There have already been reasonably significant increases under this government, which I do support, but I feel it happened to big and too fast. Delaying the last increase was what recommended at the time the policy was announced and is supported by a number of economists too.

We were out for dinner last night in an area where we could see 4 restaurants as well as our own, and we were the ONLY customers in any of those restaurants. They are really hurting badly. We ended up in a discussion with 3 owners, 2 of them say they have about 10 days of buffer, and if things don't improve, they will be gone.

It's not about screwing the poor minimum wage workers in this instance.

It is a fine line to walk. If the minimum wage review is delayed this may actually worsen the impending recession as it may affect spending power.

So private sector employers are going to pluck the extra money from thin air?

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#2436299 11-Mar-2020 12:06

Mahon:

So private sector employers are going to pluck the extra money from thin air?

Don't be silly! They take the money from their secret money trees :)

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#2436300 11-Mar-2020 12:10

@Mahon no they pass it on to their customers as prescribed in business for beginners.
If these companies cannot cover this then they are poorly managed or technically insolvent or both.

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#2436313 11-Mar-2020 12:48

MikeB4: @Mahon no they pass it on to their customers as prescribed in business for beginners.
If these companies cannot come with then they are poorly managed or technically insolvent or both.

Yeah Mahon, and if they can't just magic up a price increase to take care of the ever-increasing cost of running a business, they should just take it on the chin, perhaps from the millions of dollars of salary (At the expense of their poor underpaid mistreated staff) that all business owners in NZ make LOL.

I mean in NZ, our consumers are super reasonable people who won't go to almost any lengths to save a few dollars on the cost of a product or service. We are so fortunate that our consumers are really carefree when it comes to the cost of their products and services constantly increasing. Especially in periods of financial uncertainty.

But it's business owners fault really, they are really just poorly run or technically insolvent.

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#2436318 11-Mar-2020 12:57

Every time there is a modest increase in the pay for the lowest paid of our society there is this chorus of cries and claims of mass extinctions of the small businesses on New Zealand. The crying wolf has occurred so often no one buys it anymore.

wsnz

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Ultimate Geek

#2436320 11-Mar-2020 13:02

MikeB4: @Mahon no they pass it on to their customers as prescribed in business for beginners.
If these companies cannot cover this then they are poorly managed or technically insolvent or both.

Unfortunately the situation is more complicated than that.

For businesses selling non-essential items (mid to high range clothing, electronics, motor vehicles etc.) the consumer cannot and will not accept any further price increases, instead they will choose to simply save their money. For businesses selling essential items (supermarkets etc.), consumers will reduce their spending.

Either of these scenarios have serious implications on cash flow, especially for small businesses.

Businesses have already seen significant increases in costs. With respect to a retail organisation I am involved with, freight has increased 2-5%, cost of goods 3-8%, lease costs 3%, R&M costs 3-8%etc.

An additional $48/week might seem like a small increase when viewed in isolation, however the reality is that the increase in costs is more than double that, and per employee of the firm.

Now we have the perfect storm; a probable recession and large increases to the costs of doing business.

wsnz

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#2436321 11-Mar-2020 13:06

MikeB4:

Every time there is a modest increase in the pay for the lowest paid of our society there is this chorus of cries and claims of mass extinctions of the small businesses on New Zealand. The crying wolf has occurred so often no one buys it anymore.

I'd really encourage you to speak with retailers about the effects of the minimum wage rise in context of the other increases in costs, especially those in hospitality, and what they intend to do to keep the business alive. Small business is hurting very badly. Many owners take home less than the staff, and when viewed in the context of the hours of work being undertaken by the owners, they are taking home well below minimum wage.

GV27

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#2436323 11-Mar-2020 13:11

We have an event, at the moment. Specific assistance can be tailored around that for exposed industries.

A broader recession is different. We aren't at that point yet.

Handle9

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#2436522 11-Mar-2020 20:09

wsnz:

I'd really encourage you to speak with retailers about the effects of the minimum wage rise in context of the other increases in costs, especially those in hospitality, and what they intend to do to keep the business alive. Small business is hurting very badly. Many owners take home less than the staff, and when viewed in the context of the hours of work being undertaken by the owners, they are taking home well below minimum wage.

Given that there is effectively full employment in NZ then some wage pressure should happen rather than the stagflation that has existed for many years. It's the only way some businesses will invest in productivity improvements.

If that makes some bad businesses non viable then so be it. What is more likely is most businesses will pass on part of the cost increases and also shed some staff in parts of their businesses that are non-viable. That isn't the worst outcome as it helps productive businesses who are struggling to find staff.

This will lead to some price inflation as well but once again that isn't the worst outcome for the overall economy (as opposed to individual businesses).

Fred99

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#2437415 13-Mar-2020 10:34

GV27:

We have an event, at the moment. Specific assistance can be tailored around that for exposed industries.

A broader recession is different. We aren't at that point yet.

By definition, we can't be "at that point" until the start of 3rd quarter of 2020. Doesn't mean that we're not already in very deep trouble.

GV27

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#2437487 13-Mar-2020 12:12

Fred99:

GV27:

We have an event, at the moment. Specific assistance can be tailored around that for exposed industries.

A broader recession is different. We aren't at that point yet.

By definition, we can't be "at that point" until the start of 3rd quarter of 2020. Doesn't mean that we're not already in very deep trouble.

The world is a very different place since I wrote this - about $1tn poorer globally.

I definitely share your sentiment now. I still think the most effective thing we could do is big picture relief (WFFTC overboost, defer/discount PAYE obligations for employers, RBNZ cooperation to assist mortgage owners etc).

I think whatever assistance the Govt provides needs to be done in a way that still allows this well-overdue minimum wage increase to go through. If they're going to reach into the bag of tricks, they just need to reach deeper.

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