8 Nov 2012

Unemployment surges to 13-year high

7:17 pm on 8 November 2012

Unemployment has surged to a 13-year high in New Zealand, but a union says the real situation could be even worse.

Figures issued by Statistics New Zealand on Thursday show the unemployment rate has risen from 6.8% of the workforce at the end of June to 7.3% at the end of September.

The number of people out of work jumped by 13,000, to 175,000, the third consecutive quarterly increase in unemployment.

Statistics New Zealand says that is due to both a fall in the number of jobs available and more people looking for work. Available jobs fell by 8000, the second consecutive quarterly fall.

Some 8000 jobs were lost in the latest quarter, while the numbers looking for work increased by 4000.

But First Union general secretary Robert Reid says those figures are only to the end of September and the unemployment picture is bound to have worsened.

"We have organisers reporting in to us basically daily with reports of redundancies that are happening. Some of those are fairly small numbers, but when you add up those small numbers across the whole country, then I think that's what gives us the statistics which we have."

The increase was particularly marked in Auckland, where the unemployment was up by 10,000 to 65,000, or from 7.3% of the workforce to 8.6%, the highest level in two years. There were also big increases in Bay of Plenty, Manawatu, Wellington, Otago and Southland, while Canterbury fell to 5.2%.

Maori unemployment continues to rise, according to the latest figures. In September 2010, it was just over 13%, but has risen to 15% in September this year. Pacific unemployment is also at 15%, compared with 5.4% for Europeans.

Radio New Zealand's economics correspondent says the latest figures are completely unexpected, as economists were picking unemployment to fall to 6.6% by the end of September.

Mixed picture, says minister

Employment Minister Steven Joyce says while the unemployment rate is rising, the numbers on the benefit are going down.

Mr Joyce told Radio New Zealand's Checkpoint programme on Thursday when the rate was last at 7.3% in 1999, 150,000 people were on the unemployment benefit compared with 50,000 today.

Mr Joyce says the Treasury had forecast the unemployment rate to recede.

However, he says factors including the ongoing struggle of working with a sluggish world economy, New Zealanders saving more - which is what the Government wants - and the Government itself having to save more to get back into surplus means the country keeps going along in fits and starts.

The minister says the picture is mixed, because as well as numbers on the unemployment benefit dropping, job advertisements are increasing.

Prime Minister John Key says the rise in unemployment to a 13-year high has come as a bit of a surprise, but the Government is operating in a challenging international environment and remains committed to its economic plan.

Government blamed for rise

Opposition parties say the unemployment figures are a disastrous result - particularly for those who have lost their jobs and can't find work.

Labour leader David Shearer blames the Government for the latest rise, saying it continues to make excuses for a struggling economy but its approach of leaving it to the market is simply not working.

Mr Shearer says the Government's plan has not resulted in economic growth or job creation.

"They should be getting in behind, for example, manufacturers who create jobs. Instead, they're turning their back on manufacturers. It's about hands off, rather than hands on. They need to have their hands on the economic wheel and drive job growth rather than taking them off."

As well as the rise in unemployment, Mr Shearer said 1000 people continue to leave New Zealand every week to live in Australia.

New Zealand First leader Winston Peters says the Government has to take responsibility for the increased rate of unemployment and change its approach.

"Neo-liberal nonsense that says the market will sort it out; that you don't defend your country, you don't defend you manufacturers.

"You see manufacturing going from above 30 percent of GDP to now 13 percent - and falling - and jobs going everywhere, companies closing everywhere. And they still won't move."

Mr Peters says these figures come as no surprise, given the hundreds of job losses being reported every week.