While legitimate questions remain about the government’s broader economic vision and priorities, individual measures aimed at improving productivity and competition can be worthwhile.
Each measure should be evaluated on its merits: practicality, effectiveness and fairness. One example announced this week is a review to crack down on "creeping acquisitions", where companies cumulatively reduce competition.
Meanwhile, the Workplace Relations Minister, Act New Zealand’s Brooke van Velden, has announced several changes to the personal grievance process. These, she says, help correct a tilt that was too far in favour of employees.
The changes will be amendments to be introduced next year to the Employment Relations Act. Employers will welcome the likes of lowering the level for procedural error and reducing payouts or remedies when the employee is at fault.
Care must be taken to ensure that the pendulum does not swing too far in the other direction. "Natural justice" will need to be retained. The processes are there for good reasons, but are a minefield even for big companies.
Also, the legislation will target those earning more than $180,000. They will be unable to claim "unjustified dismissal" under the Act. They will retain personal grievance rights as well as common law rights against unlawful dismissal if their employment contracts are breached.
Australia has had a similar "fire at will" provision since the 1990s for those earning, at present, more than $A175,000 ($NZ192,000).
New Zealand has a reputation for mediocre management, and this change could improve company flexibility, productivity and success. Underperforming chief executives or senior managers have the most serious impact on other staff and the business, but the termination process can be extremely difficult, time-consuming and costly.
Failures and poor performance from high-paid technical staff can also seriously damage businesses or other organisations. Developing and monitoring performance plans over extended periods through the exacting and complex dismissal process can be a nightmare for boards or senior staff.
Unfortunately, on occasion, the planned change will lead to arbitrary and unfair treatment. Personality differences, prejudices and ignorance will apply.
It is reasonable to expect that high-paid employees, with their skills and experience, will be better positioned to find new jobs than lower-paid workers. As in the United States, easier dismissal could prompt less job-loss stigma.
Poorly managed or governed organisations could foolishly dispense with a diversity of opinions and critical thinking. Sometimes, an advantage of monitoring and performance plans is that deeper issues are unearthed, or misconceptions and misunderstandings corrected.
Sensible companies will also shy from capricious staff decisions given the costs, hassles and challenges of hiring and bringing on board senior employees.
The planned indexing of the "basic salary" threshold of $180,000 is a safeguard. More vulnerable middle management and middle-paid specialist staff should not creep into coverage.
The core protections against unjustified dismissal must be retained for most employees because of what can be the power imbalance, especially if jobs are scarce.
New Zealand, like the rest of the West, has seen wage and salary divergence accelerate. CEO and senior management incomes have soared, often to what most regard as obscene levels.
This growing disparity erodes public sympathy and can fuel resentment towards high-paid executives. Aren’t they capable of looking after themselves?
Many, it seems, do. Contractual payouts can be enormous. Others will have less leverage.
Above the threshold is 3.4% of the workforce. That represents a large and growing number.
Raising the threshold to $250,000, as previously suggested by the New Zealand Initiative, a pro-free-market think tank, could be a reasonable approach.
Ms van Velden’s announcements align with the government’s moves to try to improve business effectiveness and therefore the nation’s prosperity. There is room now for debate on the merits and details.
