Steve Maharey: What we do not as important as who does it and how

Steve Maharey

At 3.6 per cent, New Zealand's unemployment rate is now the lowest in the developed world. In recent years we've pushed ahead of Korea, Switzerland and Ireland to achieve an unemployment rate that is now a third lower than Australia's, and predicted to remain low for the foreseeable future.

This is a mighty achievement. Long-term unemployment is down, productivity is up and a record two million people are participating in the workforce.

The dramatic changes in our labour market over the past five years present both challenges and unprecedented opportunities. New Zealand has gone from a situation of not enough work to one where some industries are struggling to find enough workers.

The latest unemployment figures are part of a trend that began in 2000 along with consistent strong economic growth. Employment has also grown steadily over the past five years and is continuing to grow. The last quarter's growth was a whopping 1.6 per cent - far beyond what economists had predicted.

This is a far cry from the problems that culminated in unemployment peaking at 11 per cent in the early 1990s when the country was losing jobs and unemployment was the No 1 social issue.

As unemployment has reduced over the past four years the Government has shifted its attention to the growth of jobs and the value they add to the economy.

To address skill shortages we are investing heavily in a range of initiatives across education and industry. These include expansion of industry training, 7000 new Modern Apprenticeships, and reorientation of the tertiary sector in a way that is more relevant to the needs of business.

We are also developing policies that will increase the range of choices available to people wanting to enter the workforce. For example, for parents who are looking at a return to the workforce, we are working on new initiatives to boost the provision of quality childcare.

Instead of focusing on the downsides of unemployment, and the need to create a quantity of jobs, we can now focus more on the quality of employment and the need for high-quality and productive jobs.

This means considering a wider range of people and different, more flexible ways of working.

Older people, migrants, people with family responsibilities, people with disabilities, those who have been on the unemployment register for some time, all have abilities, skills, talents and personal qualities to offer.

Some may need more initial support, such as flexible working hours or on-the-job learning. Employers who have taken these steps report unexpected benefits, such as improved productivity, better teamwork, reduced absenteeism and fewer workplace accidents.

The Government is looking at new ways of making work fit with people's changing needs by removing barriers to work and giving people more options.

Barriers can range from lack of accessible transport or accommodation, inflexible work schedules, lack of on-the-job training and inability to match skills to today's labour needs.

The Government has also taken a lead role in looking at work-life balance and the diversity of the workforce. And it is working with Business New Zealand and the Council of Trade Unions on the key issue of productivity.

Increased participation alone is not the key to the prosperity that provides high-quality social services, healthcare and education. Just getting more people into the labour market is not enough. Raising our labour productivity - what we do at work - is.

Productivity means making better use of our workforce and resources to produce more from the same effort by working smarter.

The Productivity Working Group identified practical and relatively simple things like using relevant technology, better organising and scheduling of work and workplace training for staff that can help businesses to produce more with little more effort or cost. This year we will provide some tools to help firms to make and measure those gains.

Increased productivity means that companies can pay higher wages and returns to shareholders, and the country can enjoy better living standards without driving up inflation and interest rates or compromising international competitiveness.

These approaches are part of the Government's total package to address skills shortages.

Other aspects include: a skilled migrant strategy; encouraging skilled New Zealanders to return home; ensuring that all youth are in education, training or work; and providing a range of career advice and training options.

Along with these policies it will continue to push on in the most difficult areas, such as reducing long-term unemployment and unemployment among Maori.

The latest unemployment figures represent a historic opportunity in our social and economic landscape. As a country our response must recognise that we have to think differently about how we work and who will work in the future.

* Steve Maharey is Minister of Social Development and Employment.