Scoop Election 08: edited by Gordon Campbell

Firing At Will And Firing Up Broadband

December 10th, 2008


Gordon Campbell on the 90 day ‘fire at will’ legislation, and on the faster broadband plan.

So much for due consideration to an important change to workplace rights. The new government will be ramming through its 90 day probationary period for new workers under urgency. This ‘fire at will’ Christmas gift to those employers who run small and medium scale business will pose a few passing twinges of conscience for the Maori Party though.

A few years ago, the Maori Party played a crucial role in voting down the very similar Mapp Bill. They can probably afford the luxury of voting against their new pals this time as well, since their votes won’t be needed to pass it. Yet the sight of the Maori Party exercising its conscience from the backseat of a ministerial limousine rather than on the protest lines is likely to leave a sour taste in the mouths of its supporters.

Naturally enough, the employer lobby groups are over the moon. The fact that after a trial period, employers will be able to sack workers without facing a personal grievance claim is actually pro –worker, Business New Zealand’s Phil O’Reilly told the NZ Herald According to O’Reilly, the least skilled, most marginal employees, those most at risk of not gaining jobs, would get the most benefit. Moreover, Labour Minister Kate Wilkinson also said on RNZ this morning that ‘good faith’ provisions will govern the situation.

Neither claim is likely to be borne out in practice. Given that the current industrial relations legislation already allows for a probationary period – but one conducted fairly on both sides – it will be interesting to see just how Wilkinson’s good faith safeguard will work in practice, once the requirement for fairness on the employer side has been stripped out.

Will good faith alone protect young workers from employers who will choose to abuse this chronic 90 day holiday from fair hiring and firing procedures? Will we know in future what will be happening in small town and suburban workplaces around the country?

The potential for abuse will be especially acute as the global financial crisis and domestic recession lift unemployment and create a pool of available workers who could be readily recycled by the unscrupulous. This is not a context where it is advisable to pass legislation under urgency that gives employers greater powers to hire and fire unilaterally. To repeat the points made to the Herald by EPMU national secretary Andrew Little :

“The current employment law already allows for a probation period including a fair process to protect employees from abuse, all National is proposing is to take away the fair process.

“The fact John Key’s government wants to rush this through under urgency….goes right against the good faith principles of the current law, it just denies workers a voice on something that directly affects them…..

There are a lot of Kiwis who will be facing redundancy over the next few months and they won’t be happy to discover that John Key’s Christmas gift to them is to further undermine their employment security.”


2. The Broadband Bunfight

So far, we haven’t seen any detail on how the government plans to manage its $1.5 billion plan for faster broadband in New Zealand. Fortunately though, across the Tasman, Kevin Rudd has been rolling out a very similar plan that he’s called the National Broadband Network, and Rudd has gone much further down the track with it.

The NBN process is a useful forerunner of what we can expect to happen here. Presumably, Key will not simply award the contract to Telecom or any other player in the industry without conducting a full process of consultation, seeking expert advice and getting industry inputs. To that end, the Australian precedent could be a useful yardstick – and a warning – for how New Zealand carries out its own experiment in faster broadband building.

But first, a few details. Rudd’s NBN is a $4.7 billion plan to bring faster broadband to 98 % of the Australian population at speeds of at least 12mbps. ( So far, Key has not specified what speed his plan will treat as its bottom line.) Once Rudd had announced the NBN plan, his first concrete step was to announce a seven person panel of experts in March 2008, one drawn widely from the industry, from academia and the Treasury. Their job would be to assess the tender proposals to build the actual network, and select the best one.

The panel members, and their qualifications are set out here.

As Stephen Conroy, Rudd’s Minister of Broadband, Communications and the Digital Economy said at the time : “The panel will bring a fine blend of technical, regulatory, business, investment and policy skills and experience to the process. The Government will [then] formally call for innovative and competitive proposals to roll-out the new network with a view to having construction underway by the end of 2008.”

As with the Key plan, this means a very tight timetable. The panel will be allowed to negotiate the tender conditions with any of the prime contenders for the job – but they would need to select the successful candidate within eight weeks of first seeing all the proposals. Simultaneously – but in a quite separate process – the Rudd government would be inviting public submissions on how the NBN should be regulated, and what consumer safeguards would be needed. There would be a ‘Probity Plan’ that would include a ‘Probity Adviser’ – who alas, would be appointed by the same department that is chairing the panel of experts.

It looks like a rush job in every respect. The tenders closed on November 26. On December 14-15, the tenderers get their first chance to make their pitches to the panel. The details are here.

There are signs the process is already running off the rails. In the usual fashion of public private partnerships, this particular PPP is already way over budget, barely six months after it started. As the Australian newspaper reported last week :

Two detailed bids for a national network from Singtel Optus and Melbourne-based Acacia have been lodged, plus an eight-page letter from Telstra offering a detailed bid if the Government commits to a laundry list of demands, including an undertaking not to split the company.

Telstra has said it wants the $4.7 billion as a loan and its network could cover as little as 80 per cent of the country. Despite not having lodged a compliant bid, Telstra last week launched an aggressive campaign to win the tender, slamming rival bidders’ finances and demonstrating its own technical prowess.

Typical. It is easy to imagine the same sort of aggressive campaigning by the incumbent player here, Telecom. Note that in Australia, barely six months after the ground rules were announced, Telstra is offering to serve only 80 % of the population, and not the 98% promised by the Rudd government. Mind you, that’s still better than the 75% coverage Key is planning on for New Zealand
The tendering process in Australia has already gone $10 million over budget, even before the first tender is heard, much less before the first metre of fibre is laid. The full details are here and again, the Australian has the gory bits :

Initially, the Government set aside $10.4 million over five years for the costs of developing and managing the tender process for the NBN, including the establishment of an experts panel and specialist advisers to assess competing bids.

But yesterday, Finance Minister Lindsay Tanner told parliament an extra $10 million would be provided to the Department of Broadband, Communications and the Digital Economy to meet the costs associated with the NBN project.

So the costs of tendering have doubled, inside six months. The interesting thing is that in both the Rudd and the Key governments are rushing to spend billions of taxpayer money to provide something that relatively few households expect to benefit from, and few regard as being a top priority. In Australia, the research evidence is damning on this point :

New research at Charles Sturt University (CSU) has indicated very few Australian households feel the Federal Government’s $4.7 billion plans to improve the broadband network will help them… Less than 20 per cent of current broadband households felt the NBN will help them, while less than 17 per cent of those without broadband could see a benefit… 
“The survey of both broadband and non-broadband households found over 66 per cent stated that broadband is not a priority in their household budget.
This research shows while there has been a lot of work done on the supply side of providing a National Broadband Network, a lot more needs to be done to examine the demand side of what Australian households are looking for in this $4.7 billion investment of taxpayers’ money,” said CTU lecturer Peter Adams.

In New Zealand, John Key announced his broadband vision for this country about five weeks after Rudd had announced his panel of experts for the NBN. Key has made it clear who will be the initial beneficiaries during the first six years of our faster broadband rollout – it will be business, followed by schools and health facilities, with the first tranche of households bringing up the rear.

Our initial goal is to ensure the accelerated roll-out of fibre right to the home of 75% of New Zealanders.

In the first six years, priority will be given to business premises, schools, health facilities, and the first tranche of homes.

I’m sure lots of people would like to have faster broadband. Who wouldn’t ? But as in Australia, households here are likely to conclude that they will be the last in the queue to benefit – for something that, especially in a global recession with rising unemployment, will simply not be a major priority in their household budgeting. It’s a luxury, when you’re struggling to put food on the table.

Perhaps before he launches off down this path, Key should take heed of the Australian experience – and commission some research into where broadband sits on the scale of priorities, especially for the ordinary taxpayers who will be footing the bill.

ENDS

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    1. 10 Responses to “Firing At Will And Firing Up Broadband”

    2. By stuart munro on Dec 10, 2008 | Reply

      Well perhaps. But something must be done about NZ’s internet anyway – we are at present so far behind the rest of the world it isn’t funny. This is the result of years of irresponsible governance of the Telecom monopoly.

    3. By Wouter on Dec 10, 2008 | Reply

      I see you continue to think in terms of download speed and broadband users as consumers of web content. With faster broadband (specifically upload) I personally see dumping my standard phone for voice over IP. Significant time savings in uploading self created content to the web and potentially self hosting rather than vastly expensive ISP based hosting pakages for comminity based web sites. Can’t wait.

    4. By Jason on Dec 10, 2008 | Reply

      Hey Gordon, nice pieces.

      On the 90-day probation; what an odious and senseless piece of legislation. I would have though that anything to chill consumer spending (like say perceived, or actual, job insecurity) would be the last thing the economy needs right now.

      On broadband for -all -many +some. NZ’s speeds aren’t grand by the scheme of things, but I doubt most consumers are especially bothered by current traffic speeds (possibly a consequence of too many having recent acquaintance with dial-up). The irksome thing for NZ are the low caps on traffic volume, and no amount of fibre around the nation will do a bean towards shifting them.

      BTW- isn’t it time for a new name? I seem to recall a Werewolf something-or-other sounding kinda catchy :).

      Ciao, J.

    5. By R Clark on Dec 10, 2008 | Reply

      Of course Rudd has gone much further with his plan. He was sworn in over a year ago while Key was sworn in 3 weeks ago. What are you asking for – on the one hand you criticise the lack of movement, on the other you say the Australian plan was rushed anyway. This reveals that (due to your political view?) you’re incapable of being satisfied with a National decision no matter what occurs. So much for objective journalism, looks like you won’t get it here.

      By saying Rudd’s 98% is better than Key’s 75% you’re almost certainly saying that 100% would be better than 98%. However, 100% is a ridiculous number for a Government to dictate, because it makes the deliverable unattainable without distorting the cost. As I suspect 98% does, which implies it’s not a good number either.
      Key hasn’t given a number, but he did say “fibre”. In conjunction with a soon-to-be split Telecom, that is much more significant that Rudd’s 12Mbps.

      The quoted research about Aussie households is selective. That’s like asking “Do you feel that you’ll be better off if you reduce your carbon emissions by 20%?”. I think most people would say no. I would probably say no, because I don’t tangibly perceive the national or global benefit of decelerating carbon emissions by that amount. However, the answer could well be that I would be better off due to a delay in global warming. Point is – individually people make selfish decisions which aren’t necessarily better for the nation/world etc.

      Faster, cheaper broadband brings national and global benefits whether individuals in households realise it or not. Skype, video on demand, access to information-based tools and collaborative knowledge sharing, the effectiveness with which you can write your articles. All beneficiaries of better internet access and better services offered via the internet. I would love to pay much less than the $99 I do currently for monthly internet + phone for a much faster connection, and be able to work more effectively for it.

    6. By Oligarchy anyone? on Dec 12, 2008 | Reply

      I have always believed in the right of employers and employees to negotiate agreements. This legislation takes away that right as it applies to just one of the parties – the employee.

      In short, this legislation does not create a freedom for the employer, it simply represses the freedom for the employee to negotiate. As such it is draconian.

    7. By Margaret Swift on Dec 12, 2008 | Reply

      Is this 90 day employment trial just the first stage to reducing wages in New zealand.
      How long before all workers have no rights,

      Next question I ask is if employers care little about their employees, are those employees going to give commitment to making that business grow, I don’t think so.

      Only good thing about it is that John Key and his band of black hearts are making sure they are only there for one term.

    8. By michael on Dec 13, 2008 | Reply

      Well, a couple of things can be pretty much guaranteed; in less than a year you will start to hear a chorus of voices from employers to:

      - extend the exemption period to six, or even twelve, months on the grounds that three months is just “too soon to tell” if an employee is suitable; and/or

      - broaden the scope from small to all employers (this has already been flagged)

      You really have to wonder here, and the case isn’t helped by the fact the legisation doesn’t specify that the employer can fire the employee for performance related matters without facing a PG but instead, outside the harrassment and discrimination grounds, gives them carte blanche – any reason or no reason at all is sufficent.

      The not so hidden agenda of employment at will is pretty apparent.

      And you really have to love the “we had submissions on this a couple of years ago on a similar, but quite different, Bill so we don’t need any now” rationale. Can you imagine applying that to ANY other piece of legislation? Hilarious.

      Also, given that this is being done at least partly to “bring us into line with the OECD” can we presume that, say, a capital gains tax is just around the corner?

    9. By Jack on Dec 17, 2008 | Reply

      Lets put Key and the Nat’s on a 90 Day Trial. Then lets sack those pathetic corporate shills.
      Its alsmost like Kiwis have been tricked into electing our bosses.

      “Only good thing about it is that John Key and his band of black hearts are making sure they are only there for one term.”

      Margaret Swift

      Don’t count on that. I wouldn’t put it past them to import some evoting machines from the states and never loose an election again. Sounds too far fetched and maybe it is. However we should all know some things that our media hasn’t reported. John Howard in Australia legalised E-voting and in the specs there is to be no paper record of a persons vote cause paper and printers are too costly apparantly. The machines were not rolled out at the last election in OZ but the law still exists as far as I’m aware.
      The right wing government in Ireland bought enough paperless machines for the whole damn country with absolutely no consultation and were going to use them at their last election but the public went ballistic and they had to be withdrawn before the election. They are still planning to use them at the next elections. Ballot scanners were trialed in Scotland and the BBC have since reported huge discrepencies in the vote tallys.

    10. By kelsey on Dec 25, 2008 | Reply

      What a load of left-wing twaddle based on uninformed knowledge of the law:

      1. The 90 day probationary period only applies if both sides agree to it.

      2. It’s only for small businesses

      The evidence from elsewhere in the world, notably France, is quite clear: The harder it is to remove a non-productive employee, the harder it is for people to find jobs.

      This law is aimed at two things; a) increasing employment, and b) increasing productivity by getting the right people doing the right jobs. I struggle to understand how those that will benefit the most are complaining the most.

      Long term, productivity increases are the only path to wealth creation. Sure, a minimum wage law here and there can be nice but ultimately it always comes back to productivity. Do more with less, and we’re all better off.

    11. By D.A. McKenzie on Jan 30, 2009 | Reply

      Talk Talk talk…. Lets get it Done!!

      NZ Broadband its a Joke …Stop Talking, and lets get a Broadband that’s fast, reliable, and works, at 100%.

      Ive used UK, EU, and Australian Broadband and we in NZ are just a JOKE.

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