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Legislative Assembly for the ACT: 1996 Week 9 Hansard (28 August) . . Page.. 2728 ..

MR WOOD (continuing):

The committee noted that, in contracting out government-funded services, care is needed to ensure a proper balance between governmental responsibilities and accountability of contracting bodies; that the provision of health and disability support programs through contracted arrangements is unlikely to achieve substantial cost savings, without effective control of service providers; and that there is a potential for school self-management to exacerbate socioeconomic inequalities between schools. Reservations were expressed to the committee as to the long-term economic success of the economic and financial reform program; a general view among those active in the field being that policies had been too narrowly based and rigid to provide for both long-term growth and reasonable standards of living, especially for disadvantaged groups in the New Zealand community.

I thank my colleagues Mr Kaine and Ms Horodny for their support and dedication in what was an intensively focused but very rewarding visit which involved some 13 meetings across a broad spectrum of activities in four cities. I thank Mr Symington, the secretary of the committee, for his intensive work as well. The committee also welcomed the willingness of individuals and officials to speak frankly and to share their experiences. I commend, for the Assembly's consideration, the committee's report and its observations and conclusions.

MS HORODNY (4.37): I concur with Mr Wood's statements on the visit to New Zealand. I would like to add that there was much to learn from this visit and, indeed, I learnt that Australia, and the ACT particularly, needs to look very closely at the reforms that have been conducted in New Zealand and learn from the changes that were made, particularly about the problems that were created.

We hear that New Zealand has made incredible leaps forward in terms of economic and social reforms; but the figures indicate that, whilst unemployment has gone down, and on the surface this would appear to be a very good thing, employment contracts provide for wages which are, by any standards, ridiculously low. For instance, 16- to 19-year-olds get $3.75 an hour, and workers who are 20 years or over get $6.25 an hour. It is no wonder that more people are employed. Employers will take on many more people at those sorts of rates, but where is the fairness in asking people to survive on $6.25 an hour?

Real wages in New Zealand are falling, and this has been the trade-off between unemployment and lower real wages. The result is that there is a new class of working poor. While we were in New Zealand we heard from the Salvation Army that food rations that they hand out have gone up from around 1,500 to about 12,000 quarterly. That is the quarterly figure. That is, obviously, an enormous increase over a short period of time since the reforms have been in place. What has actually happened in New Zealand is that the social responsiblity has shifted. The weight of social responsibility has been lifted from the higher income earners. They are better off and they can afford, for example, the more modern cars that are so often used as an indicator of economic success. Meanwhile, the less skilled or those who represent the sector of the work force which is in oversupply and so have little bargaining power with employers are greatly disadvantaged.

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