Overall Performance Summary

Operating Environment

The overarching goal of the State sector is to develop a system of world-class professional State Services serving the government of the day and meeting the needs of New Zealanders. All public sector agencies are working to implement this goal and improve their delivery of services. For the Department of Labour, our unique value proposition relates to the intersection of people and their work. We are focused on achieving our overall outcome of productive work and high-quality working lives, and our Statement of Intent for 2007/08 sets out our annual work programme to progress this.

Over the course of the year, we refined our strategic framework and sought to build an improved understanding of how to measure progress in achieving this outcome. Underpinning the dimensions of this outcome are the Department’s intermediate outcomes of:

• Our place in the world
• Our workplaces
• Our workforce
• Our people.

The key areas of focus within each intermediate outcome were refined to reflect the current state of our operating environment and the breadth of our work programme. This ranges from humanitarian commitments, to improving workplace practices, to injury prevention and compensation.

Current State

The New Zealand labour market is in a position of historic strength in terms of participation. However, alongside strong employment growth over the last ten years, there have also been significant skill and labour shortages. This has driven much of the Department’s activity to expand New Zealand’s workforce. We are developing policies that encourage growth in skill acquisition and workforce participation. We are further developing the workforce we’ve already got through policies, projects and programmes to increase productivity. And we are also supplementing the existing workforce, using migrant workers to fill labour gaps we can’t meet with New Zealanders, through our immigration policy and service delivery.

During 2007/08, the Department continued to promote improvements in the performance of the labour market through better matching the supply of labour with the needs of industry. Significant increases in collaboration with related agencies saw a strengthening of our immigration-related work, to reflect the increase in movements of people across New Zealand’s border, balancing the value and risk such activity poses. We continued to deliver information and advice to assist employers and employees to understand new legislative changes aimed at lifting the value of work and increasing productivity.

Major highlights during the year included:

• filling the New Zealand Residence Programme – as more than 60 per cent of New Zealand’s workforce growth in the last five years has come from permanent and temporary migrants to the country
• developing and implementing the RSE scheme – to assist the horticulture and viticulture industries to achieve their harvests
• improving departmental service – increasing staff productivity and the effectiveness of the services delivered to New Zealand businesses.

Over the coming years as the New Zealand population ages, overall labour demand is expected to outstrip supply. While supply and demand for highly skilled labour is expected to be evenly matched, demand for lower skilled labour is likely to exceed supply. Inherent in this is the anticipated general upskilling of the working-age population.

Contribution to Government Priorities

The Department supports the Government’s overall priorities of economic transformation, families young and old and national identity. Our strategy – aligning all of the activities across our policy, advice, service delivery, regulatory and knowledge roles – is to build an integrated and unified Department to add value for New Zealand.

Supporting the economic transformation theme were a number of initiatives including the RSE scheme, recruiting suitable migrants through the Skilled Migrant Category (SMC) and information and enforcement activity, as the Department continues to develop modern regulatory practices. The amendments to the Employment Relations Act for flexible work came into force on 1 July 2008. In 2007/08, significant preparatory work included campaigns leading up to 1 July 2008 and staff training to prepare for service delivery under the Act.

A significant focus for the Department during the year was to provide improved information about the skills needed for the economy, both now and into the future, as well as taking action to ensure those skills are able to be accessed by New Zealand business. The Department focused on developing initiatives to grow New Zealand businesses, remove barriers to participation, leverage our international brand and increase our international influence.

In supporting families young and old, a major policy change was implemented, with the splitting of the Family Sponsored Stream under the New Zealand Residence Programme into the Immediate Family Stream and the Parent/Sibling/Adult Child Stream. This policy change seeks to strengthen New Zealand families and communities, providing good outcomes for sponsors, family members and New Zealand, as well as contributing to New Zealand’s economic and social development.

Our work in assisting migrants to settle helps to build our national identity. The Strengthening Refugee Voices initiative was successfully implemented in the four key resettlement regions, aimed at building the capacity of refugee communities to discuss their settlement needs with local service agencies and to strengthen their participation in the annual National Refugee Resettlement Forum.

Themes and Critical Dimensions of the Department’s Work

…our focus on skills

The skills of New Zealanders are increasing. Over recent years, school leaver attainment has been improving quickly. Additionally, higher rates of post-school vocational training and tertiary qualification attainment are being recorded across the population. An appropriately skilled labour force will be particularly important for New Zealand to improve labour productivity and increase our economic growth in the future.

The Department led the development of the New Zealand Skills Strategy in partnership with Business New Zealand, the New Zealand Council of Trade Unions and the Industry Training Federation. The intention of the strategy and its associated action plan is to build firms’ capability to support managers and workers to better develop and utilise their skills.

Through the Upskilling Partnership Programme, we have worked to improve our understanding of the characteristics of effective workplace training programmes, as well as supporting employers in understanding how such training can realise improvements in workplace productivity. The importance of such workplace training is critical, as four out of five people who will be of working age in 2017 are already in the working-age population.

We have continued to work collaboratively with the Tertiary Education Commission (TEC) to inform the supply of skills that the tertiary system develops, to maximise the tertiary reforms’ contribution to New Zealand’s economic development.

Between 2000/01 and 2007/08, 377,010 people have been approved for residence in New Zealand, and research shows 94 per cent of principal applicants and 67 per cent of secondary applicants (such as a partner or spouse) were working for pay or profit. This not only grows the skill level of New Zealand’s workforce but directly contributes to New Zealand’s economy.

...our focus on productivity

Labour market productivity continues to be one of New Zealand’s biggest challenges. While recent economic growth has been strong, this has been due largely to more people entering the labour force. Population projections suggest New Zealand is unlikely to have a large number of people that can be added to the labour force in the future. This means, if good rates of economic growth are to continue, it will have to come from more efficient use of workers – productivity.

Building on our work with business groups to communicate the productivity message, the Department has also concluded agreements with the Engineering, Printing and Manufacturing Union and the Dairy Workers Union to implement projects to improve productivity in a number of workplaces. We have also developed a set of resources and case studies on State Services Workplace Productivity with the State Services Commission and Public Service Association to demonstrate good workplace practices and encouraged public sector organisations to take steps to raise productivity.

...our focus on participation

More New Zealanders than ever are participating in the labour force. In June 2008, 68.6 per cent of the working-age population was in the labour force. This is up from the 65.4 per cent reported in June 1998. This historically high labour force participation rate suggests we cannot expect large-scale gains in participation without creative employment solutions to draw in those not in the labour force. Over recent years, much of the gain in participation rates has come through the contribution of older workers.

Over 2007/08, much of our focus was on enhancing parents’ and other carers’ choices about work/family arrangements. This included the development of legislation to provide employees with caring responsibilities the right to request flexible work, and protect and promote infant feeding. This is to help workers achieve a better balance between the needs of their work and those they are caring for, making the workplace a more attractive place for valued workers.

We also led the Government’s Choices Plan of Action, which worked with key stakeholders to encourage the availability and uptake of quality flexible work, through provision of communication materials and guidelines for employers and employees.

...our focus on effective labour market regulation

New Zealand has seen a greater level of constructive partnerships between employers and employees. There has been more emphasis on supporting businesses to develop work practices that lead to increased productivity and business growth.

The Department has continued to assess its service delivery resources to ensure they are directed to the areas of highest risk. We have also carried out intensive investigations where we assess these will have the greatest impact to improve workplace health and safety practices.

Effective labour market regulation involves raising awareness and expectations to inform workplace practice improvement. Examples include the development of online tools like the Hazard Tool, that supports small businesses, and campaigns such as Health and safety, it’s no joke and the Grim Reaper campaigns.

...our focus on border security

There has been an increased focus on border security across the globe. New Zealand has world-class border security standards. We have ‘moved the border offshore’ to prevent people that are considered a risk to New Zealand arriving in the country. During the year, there were over five million people movements – arrivals and departures – across the New Zealand border.

As a member of the Border Sector Governance Group (BSGG), we have strengthened our focus on border security. The group’s rationale is to coordinate and align the various agencies that maintain the integrity of New Zealand’s border. The focus in 2007/08 was to develop and agree a joint work programme across the agencies that undertake this work.

...our focus on international relationships

New Zealand has a strong global presence, and we ensure we meet our international obligations, including resettling United Nations High Commissioner for Refugees (UNHCR)-mandated refugees. We have strong relationships with the ILO and the labour and employment aspects of Asia-Pacific Economic Cooperation (APEC), the United Nations and the Organisation for Economic Cooperation and Development (OECD).

We have also sought to build capability through our relationships and partnering with countries within the Pacific region. We have offered technical advice to Pacific countries when it is requested.

The free trade agreement between New Zealand and China was signed on 7 April 2008 in Beijing, bringing to an end a negotiation process that spanned 15 rounds over three years. A Memorandum of Understanding on Labour Cooperation, which was achieved as part of the free trade negotiation process, was a historic outcome for the Department, as it is the first such agreement that China has entered into with another country.

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