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400 jobs lost in four days a 'grim' start to the year

Published: 10:26AM Thursday February 14, 2013 Source: ONE News

The workforce has lost at least 400 jobs in four days as the country braces itself for a "grim year" in manufacturing to get worse.

Today's announcement from NZ Post that it is to cut 100 jobs from Datamail comes on top of redundancy notices from Mainzeal and Contact Energy earlier in the week.

Since the start of 2013 New Zealand's manufacturing industry has suffered huge blows, with Summit Wool Spinners also cutting 200 jobs.

This morning Bill Nelson, national secretary of the EPMU, told TV ONE's Breakfast that the latest job losses show just what a "grim start to the year" it has been.

Nelson warned of further bad news for the manufacturing industry, and revealed he expects to hear about further redundancies in the next few days.

"There's at least two other significant announcements coming through," he said.

"(For) one of them the decision has been made by management and investors, that news will come through within days, if not today. Another one we're hoping the decision isn't made but there's a decision imminent. This is serious stuff."

Labour's finance spokesperson David Parker hit out at the Government, saying such devastating job losses within the first two months of the year is a "shocking indictment" of Prime Minister John Key's economic programme.

"Between Datamail, Mainzeal and Contact Energy 400 jobs have been lost in four days, with 200 gone in just over 28 hours. That's the sort of record we don't need," he said.

"The Government has no ideas. All it can do is call for more foreign investment despite overseas companies deserting New Zealand in droves.

"The only area that's growing in New Zealand is Canterbury and that's due to tragedy and insurance inflows, not any act of this Government."

'Huge pressure'

ONE News Political Editor Corin Dann says while the Government accepts that the jobs market is currently "very, very tough", it says growth in some sectors balance losses in others.

"Its response is, while some sectors may be seeing jobs losses, others are seeing growth, and I suppose the construction sector is one area where we will see some growth," he said.

"But the problem here is ... the economy simply isn't creating jobs fast enough to get that unemployment rate down to aceptable levels.

"So the Government is under huge pressure. It leaves Labour with a line of attack, you'll hear them day-in day-out now saying they will be more hands-on with the economy, although whether they would have stepped in to stop the job losses at New Zealand Post I think is another matter."

Decline in demand for power

Contact Energy, one of New Zealand's largest electricity companies, announced yesterday it would be cutting around 100 jobs by June.

Nelson said the company is a victim of the decline in manufacturing.

"One of the reasons for this latest news is that Contact Energy has been developing up its infrastructure so they've done that," he said.

"The other reason is a decline in demand for power, which ironically is feeding through from the decline in manufacturing jobs."

Contact Energy says demand for power has been flat, with oversupply, and as a business it must react to that.

Nelson said the union will be working with the company to try to minimise the number of job losses.

Prime Minister John Key was reluctant to comment on the reasons behind Contact's decision today, but remains positive about the energy outlook

"Companies all the time go through various phases of restructuring, whether they are publically owned or privately owned," he said.

"Over the long term, if you look at it, as the economy grows the demand for electricity grows, and I'm sure that will continue into the future."

Dann said market analysts he has spoken to say SOEs are "likely to face greater business pressures once they're on the stock exchange".

"And they say that's likely to mean cost-cutting like Contact is making," he added.