The impact of the upcoming New Zealand Election on the employment market
The political landscape of New Zealand can have a profound impact on various aspects of our society, and the employment market is no exception. The winning party(s) hold the power to shape policies to help achieve their distinct vision for the nation's economic and social future. Potential changes to government spending, tax reforms, infrastructure investments, RMA reform to name just a few are all poised to influence the job market and the country’s economic conditions in multifaceted ways.
These potential local changes coupled with continuing geo-political tensions offshore, the impacts of climate change becoming more apparent, significant slowdown in Chinese demand for our products and recessionary environments across the world certainly add an element of volatility and uncertainty to our NZ job market.
However, despite this we still view that NZ has strong economic credentials, an independent reserve bank and with low government debt is as well placed as any country to weather the coming challenges and the employment market although likely influenced in different ways by the election as outlined below, will remain as a whole strong.
With regards to the upcoming election, it looks like it will be a tight race however one thing that is apparent is that the minor parties are much more likely to have a stronger influence in the past, whether it’s the Greens and Te Pati Māori pulling Labour to the left or Act pulling National to the right. New Zealand is potentially going to experience a significant shift in its political landscape in the upcoming election.
If we look at the last two terms of the Labour led Government, we have seen a number of policies which have all impacted on the labour market including the increase in minimum wages through to $22.70 per hour, the 10-day sick leave entitlement, a new Public Holiday and they have supported more than 90,000 New Zealanders through free trades training and apprenticeships with the unemployment rate reducing from 4.8% - 3.3%. The Labour Government also introduced the accredited work force visa which has had implications for employers and the candidate pool, which is very much short on skills, to an already struggling immigration department.
So let’s take a look at some of the political parties policies and plans moving forward for the 2023 election and how these policies may affect the employment market.
Labour - Our current Governing party, has stated its next move is to back businesses to grow jobs and wages, continuing to offer free apprenticeships to fill skills gaps and with initiatives like the Regional Strategic Partnership Fund where they are supporting industries to reach their full potential. They plan to create more jobs, including through investment in much-needed infrastructure projects.
National – National has a raft of policies on offer, one of the key is tackling inflation. With a 5 step plan including reducing unnecessary costs to employers, businesses and the productive economy and reducing the bottlenecks in the economy, specifically the immigration policy mess causing New Zealand to lose skilled workers and making it too hard for businesses to welcome desperately needed staff.
National appear currently to have a real shot at being able to form a coalition government with Act after the election and if they do as they say they will, this might lead to increased economic activity, potentially translating to job creation in export oriented sectors.
Green Party – With their polling numbers increasing they could have significant influence on Labour if Labour wins enough seats. Their policies revolve around climate and a greener more sustainable NZ. The renewable energy sector is likely to benefit from a focus on sustainability, leading to job growth in roles related to clean energy production and technology. The Green’s climate plan will create jobs, and they do plan to provide training opportunities and secure work for people moving out of carbon-intensive industries.
Given this is a relatively new industry and some of the initiatives they are talking about are still in infancy stage of innovation, this will take time. It’s definitely an industry to watch and the employment market could experience a transformation in skill requirements in the long term as is happening across many nations.
ACT Party – With strong polling numbers, ACT looks likely to have a major influence upon a National led government if that comes to fruition. They have a plan to cut red tape, grow the health workforce, support farmers and bring in a tougher sentencing stance. This will grow roles in these industries, but again predominantly relates to bringing in international talent. Cutting away the red tape will likely reduce some roles in the public service and their desire to cut government spending will potentially come in the way of cuts to public services wages which have been on a freeze up until recently and are due to be aligned with the current market. Another of ACT’s plans is to roll out toll roads across the country to help fix NZ’s roading situation, which looking at the current state of our roads, won’t be a small project and looking into civil roles for long term employment solution, could be a great career choice!
Te Pāti Māori – Fiercely advocating for the interests of whānau, Hapū, and Iwi in Government they may be in a position to influence the likely winning coalition. The big push around gaining equality and better wellbeing for Maori will continue to see new opportunities for Maori in the employment market and upskilling opportunities to move generational families out of the welfare system, with overall improved outcomes for Maori Whanau.
NZ First – as we all know you can never count out NZ first and its charismatic leader Winston Peters who has a habit of being the kingmaker. As their slogan says they are looking to take NZ back so we will have to wait and see what that would mean if they are in a position to influence a future government.
While elections can inject uncertainty into the business environment, we continue to believe NZ long term economic fundamentals are strong and that
both national and labour being largely centralist by nature, the democratic process and MMP electing meaning change is slow that while there may be
some short term uncertainty and cautious hiring practices could well prevail, it will not be long until the business community gains confidence in the stability of new policies. With the election set for October, this may well bring a period of transition and potential growth in the employment market. While short-term effects may be seen in government-driven job creation and sector-specific adjustments, long-term impacts are likely to revolve around skills development, wage dynamics, and the nation's global economic positioning. The coming years will determine how successfully the policies translate into real opportunities for New Zealand's workforce while navigating challenges brought about by global economic shifts and evolving societal expectations.
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