Enews October 2012

This month:

Three questions

All NARGON members should know the answer to these three questions:

  1. The Starting Out Wage will have to be at least what percentage of the current Minimum Wage?
  2. If Labour MP Andrew Little's Supplementary Order Paper is passed by Parliament, at what time will supermarkets and stores have to stop alcohol sales?
  3. Which party is proposing registering and regulating "lobbyists"?

End Story

Food prices fall and card spending also down

Figures from Statistics New Zealand show food prices were up 0.1 percent in August 2012. The biggest increases were recorded for fruit and vegetables (up 1.5 percent) and non-alcoholic beverage prices (up 1.3 percent). The largest fall was for grocery prices which dropped 0.7 percent their fifth drop in six months. Overall, food prices decreased 0.5 percent in the year to August 2012. Annual food prices have now fallen for four months in a row, something which has not happened since 2010.

For the year to September 2012, food prices decreased 0.3 percent overall. Despite the media and political hype, this was the fifth consecutive annual fall in food prices. Three of the five subgroups made downward contributions - grocery food (down 3.5 percent), non-alcoholic beverages (down 1.3 percent), and meat, poultry, and fish (down 0.8 percent). Notably, prices also dropped for fresh milk (down 9.2 percent), butter (down 30 percent) and cheddar cheese (down 15 percent).

In August 2012 the seasonally adjusted value of electronic card transactions was down 0.6 percent. The consumables group, which covers the supermarket and retail grocery sector, had the largest drop in value, down 0.6 percent ($10 million).

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End Story

Political comment: Proposed amendments to the Alcohol Reform Bill

While the debate over the legal liquor purchase age has been settled with a clear vote for 18 years in both on- and off-licenses, MPs are getting set to decide on the remaining issues covered by the Alcohol Reform Bill. Politicians from across the spectrum have submitted more than 20 Supplementary Order Papers (SOPs), many of which propose significant amendments to the existing Bill.

A number of these amendments could impact the retail grocery sector.

Justice Minister Hon Judith Collins has introduced an SOP which includes definitions of food products, ready-to-eat prepared food and snack food to assist the decision makers determine whether a premise is a grocery store. One criterion to be a grocery store is that the principal business carried out on in the premises is the sale of food products. This distinction is important because a grocery store is eligible for a liquor licence while other stores (such as convenience stores) are now not.

NARGON contested the Governments push against smaller stores saying decisions should be made based on the stores actions and record, not size or sales. However, the Government has forged ahead and this SOP at least gives more guidance on the definitions.

Another key provision would require supermarkets and stores to designate one part of their premises as a permitted area for the sale, display, advertisement and promotion of alcohol. This is intended to limit the exposure of shoppers to alcohol marketing.

The permitted area cannot usually include the store entrance or the main pedestrian route to the checkouts. Basically, the alcohol section has to be shunted off to one side. NARGON does not believe this provision is necessary but, if passed, we doubt it will unduly impact shopper behaviour or sales.

Maryan Street (Labour) has drafted SOP 112 which would apply a health levy on all alcohol purchases at the point of sale. She says this would stop heavy discounting and sales below cost (loss-leading). Her colleague Lianne Dalziel (Labour) has also introduced SOP 113 which includes a minimum price per unit for alcohol sold from off-licences. SOP 81 from Te Urorua Flavell (Maori Party) would also set a minimum price and create new offences relating to the sale of alcohol below that minimum price. NARGON does not believe a minimum price would do much to reduce alcohol harm but it would increase the profits of budget liquor companies.

Mr Flavells SOP also includes a prohibition on all displays and advertising of alcohol in grocery stores and supermarkets. NARGON considers that such a ban would be unnecessary and disproportionate.

Andrew Little (Labour) proposes in SOP 110 that alcohol sales in off-licences (including supermarkets and grocery stores) be limited to 10am to 8pm. He says evidence has shown that people purchasing alcohol later in the evening are more likely to have been drinking beforehand and may not have the judgment and self-control necessary to make cogent decisions. We strongly believe the current law that alcohol cannot be sold to intoxicated people is more than sufficient. As drafted, a family who went to the movies after work would be unable to pick up a bottle of wine for dinner on the way home. Customers should be assessed on their state at the time of purchase, not an arbitrary time limit set in Wellington.

Another Labour MP, Louisa Wall, has introduced SOP 107 which would prohibit any off-licence premises from being located within a 1 kilometre radius of an early childhood centre, or a primary, intermediate or secondary school. However, supermarkets are excluded from this restriction because she notes the provisions in the Bill require supermarkets to meet criteria that ensure the effect on children of sale of alcohol is minimised. It is pleasing to see the responsible stance taken by supermarkets is acknowledged in this SOP, even if that attitude is not reflected in other amendments.

The Green MP Kevin Hagues SOP proposes increasing the fine for supplying alcohol to minors from $10,000 to $20,000. This would bring it into line with the existing penalties for the supply of out-of-hours alcohol. NARGON considers this to be a very sensible provision.

Two politicians have proposed changes to excise tax which would affect the prices at supermarkets and grocery stores. Kevin Hagues SOP 130 would raise the excise tax on alcohol by 50%. David Clark (Labour) takes a different approach suggesting the removal of excise duty on low-alcohol products up to 2.5% alcohol by volume. While a massive hike in excise would be unnecessary and ineffective, dropping the price of low to medium alcohol products is well worth considering.

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End story

Starting Out Wage moves a step closer

The Minister of Labour, Hon Kate Wilkinson, has confirmed that the Government will introduce the Minimum Wage (Starting Out Wage) Amendment Bill to provide for eligible 16- to 19-year-olds to be paid no less than 80 per cent of the minimum wage.

She stated that the new starting-out wage will help some of our youngest and most inexperienced workers get a much-needed foot in the door, in what is currently a tight labour market NARGON supports this policy which was one of Nationals 2011 campaign promises because it will help more young people become employed, gain skills and earn money.

Three groups of young people will be eligible unless they are training or supervising others:

  • 16- and 17-year-olds in their first six months of work with a new employer
  • 18- and 19-year-olds entering the workforce after more than six months on benefit
  • 16- to 19-year-old workers in a recognised industry training course involving at least 40 credits a year.

While the policy has come under predictable attack from the opposition and some unions, it is really a modest extension of existing policies, including Labours new entrants wage which was 80% of the minimum wage for the first three months or 200 hours. Because there was uncertainty around the funding, almost no employers (2%) utilised it. National has extended the eligibility period and made it clearer who is covered.

NARGON still supports an appropriate youth minimum wage but agrees that the Starting Out Wage policy is a (small) step in the right direction.

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End Story

Lobbying bill well intentioned but fatally flawed

First-term Green Party List MP Holly Walker has introduced a private member's bill to register and regulate lobbyists. The stated aim is to "increase the transparency of decision making" by establishing a Register of Lobbyists, developing a Lobbyists' Code of Conduct and providing powers for the Auditor-General to investigate potential breaches of the Code. At first glance, it seems hard to argue with.

However, the bill is unnecessary, would be a bureaucratic nightmare and, most worryingly, would reduce freedom of expression and political participation. As an organisation which exists to lobby politicians and officials on behalf of members, NARGON has studied the bill closely and considers that it should not be passed, even with various amendments.

The New Zealand Law Society, famously non-partisan and polite, published a scathing submission on the bill saying it was legislation by slogan an unprecedented level of opposition from the group.

Holly Walker argues the reality remains that some people do have a better chance of being heard than others and a lot of the time we dont know who these people are or the extent of this access. A lot of the time, lobbying takes place behind closed doors, and there are no rules regulating lobbying activity. However, this situation is common around the world, has existed in New Zealand for many years and there is no evidence that it is a particular problem here.

While there are clear issues with the influence of business and union lobbyists in the United States and, to a lesser extent, Britain, New Zealand lacks evidence of any widespread problem requiring the regulation of lobbying. Transparency Internationals Corruption Perception Index 2011 listed this country as the least corrupt in the world. It did not identify any need to regulate lobbying.

The bill appears to be trying to fix something which is not broken. NARGON believes that most political arguments in New Zealand are decided on merit. It is not overly important which groups or individuals have championed them.

Business New Zealand has pointed out that MPs often need information and advice from experts in a particular field so they can better understand how a proposed policy or law might work in the real world. Requiring everyone both individuals and organisations - to file a return with the Auditor-General before lobbying would be a bureaucratic nightmare.

They rightly note that having a coffee with an MP in a caf or inviting them to speak to a group would probably be covered by the bill. The Law Society confirms that a person lobbying without realising they were lobbying would be criminalised because it will be a strict liability offence. This confusing mess of red tape would, in their considered opinion, create a drop in participation in the political process

The Greens and Labour also appear to consider lobbying efforts by business and industries to be inherently different to lobbying by unions and environmental groups. The Law Society calls the proposed definitions unprincipled and illogical and Labours suggestion that unions be excluded is transparent, particularly given the high level of union involvement documented in the Constitution of the Labour Party.

The Law Society concludes that international reports and codes indicate [lobbying] is a highly complex area not amenable tolegislation by slogan. A number of similar jurisdictions have dropped the idea of lobbyist regulation after considering the full implications of the policy.

Opposition parties have argued that the bill is the start of a wider debate. However, the Law Society argues the bill is unsupported by any cost-benefit analysis or effective linking of the solution to the alleged problem, and lacks rigour in its drafting. The Supplementary Order Paper from Labour, designed to fix some obvious flaws, actually makes the Bill worse because, according to the Society, two of the amendments are palpably wrong and the third may be an improvement but needsanalysis and context.

The lobbying law would add nothing to the political dialogue in New Zealand.

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End Story

Countdown to open pharmacies inside supermarkets

Working with experienced pharmacist Lindsay Smith, Countdown intends to develop joint venture pharmacies inside selected supermarkets around New Zealand. The pharmacies will offer prescription and pharmacy-only medicines as well as expert advice.

Countdown managing director, Dave Chambers, described the Countdown Pharmacy concept as an exciting new venture for the company and a natural extension to the great range of health and beauty products that our customers are increasingly buying.

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End Story

Reminder about written employment agreements

NARGON reminds all members that full written employment agreements are required for every single employee. This is a strict legal requirement. The member's section of the upgraded NARGON website contains draft agreements and advice on employment agreements www.nargon.co.nz.

End Story

On a poignant note Paying it forward

The following exchange happened at a grocery store in Portland, Oregon, USA according to www.notalwaysright.com

(I have just finished ringing up a good-sized amount of groceries - slightly over US$100 worth - for a woman. A man has been waiting quietly in line behind her. When I tell her the total, the man speaks up.)

Man:"Ma'am, I'd like to pay for this for you."

Woman: *surprised*"ALL of it?"

Man:"Yes. I'd like to pay for your entire order, if you don't mind."

(Several seconds pass, as the woman blinks repeatedly.)

Woman:"Well, certainly, if you're willing. But can I ask why?"

Man:"Well, slightly over a year ago I was diagnosed with advanced neuroblastoma. They started me on aggressive chemotherapy almost that same day, and my doctor said I only had about a 30% chance of even making it to 2012.

That was on August 28th of 2011. My final round of chemo was last Monday and today they got back the results from my latest MRI: it said 'no evidence of disease.' So, I'm feeling very rich right now, and I'd like to spread it around."

(And then he paid for her groceries!)

End Story

Answers to 3 Questions

1. No less than 80%.

2. 8pm.

3. The Green Party.

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