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Employer and business organisations

by Megan Cook

Employer and business organisations were formed in New Zealand from the mid-19th century. By the early 20th century there were many organisations; by the early 2000s there was a multitude. Whether based on occupation, sector, area or interest, there was an employer and business group for virtually everyone.


Chambers of commerce, 1850s–2000s

Beginnings

Chambers of commerce and industry are the oldest commercial organisations in New Zealand. The first local chambers were set up in the 1850s and the umbrella group, the Association of New Zealand Chambers of Commerce, in 1915. The national body became an affiliate of the Commonwealth Chamber of Commerce Association and the International Chamber of Commerce.

List of requests

 

When the Auckland and Wellington chambers of commerce were founded in 1856, their members wanted amendments to the Bankruptcy Act to deal with insolvent debtors, daily mail deliveries, improvements in roads, transport and harbour management, and relief from ‘cumbrous, complicated and vexatious’ customs tariffs.1 These matters would be central concerns for decades to come.

 

Purpose

Chambers of commerce had a dual purpose. They provided services and a meeting place for businesses of all kinds within a particular area. They also lobbied local and central government for services and business-related legislation. In the mid-19th century, when local and central government were limited, the chambers sometimes organised services themselves. The Wellington chamber set up a post-box service, and was a driving force in the construction of Queens Wharf.

The chambers strongly favoured development, including population growth, industrial and commercial development, and from the 1880s, government support for business. Chambers were actively involved in the marketing of New Zealand goods and, from the 1930s, the promotion of New Zealand as a tourist destination.

The chambers’ desire for government involvement in business development was equalled by their dislike of government restriction. They often expressed objections to increasing government regulation of labour and working conditions, particularly in the 1890s, when the newly formed Department of Labour was very actively protective of workers, and after the 1936 introduction of the 40-hour working week and compulsory trade unionism.

Influence on government

The influence of the chambers of commerce on local and central government was strong in the 19th and early 20th century. In the mid-20th century this influence waned.

It has been suggested that this was a result of the chamber’s inclusiveness – its ‘multi-purpose, catch-all quality’ made it difficult to reach a unanimous viewpoint.2 It was also displaced in some areas by other groups such as the Employers’ Federation.

Membership

Membership of chambers rose and fell considerably in the 19th century. A chamber might cease to hold meetings for years at a time, regrouping when energised by some shared need. Membership also rose and fell in the 20th century, with a particular chamber occasionally becoming dormant.

The 1970s and 1980s saw a boom in membership. Many of the newcomers were objecting to, or seeking help with, increasing government regulation. Many of those joining owned small businesses, and by the mid-1980s they were 80% of the membership of some chambers. From the 1990s women also began joining in significant numbers.

In 2007 there were 30 chambers, representing 24,000 businesses. Small and medium enterprises made up 75% of the members, but most of New Zealand’s largest corporations also belonged. Many trade associations, such as the Master Plumbers and Gasfitters, were affiliated to the Chamber of Commerce.

Chambers of commerce in the 2000s

In the early 2000s, though the chambers had not regained their earlier influence with the government, they remained a vital part of the New Zealand business world. They offered a wide range of services, including:

  • business education, advice and mentoring
  • assistance with staffing, including recruitment, training and cadetships
  • networking and promotional opportunities
  • international trade assistance, including certificates of origin and manufacture, letters of introduction, and advice on international trade practices.

Chambers of commerce also worked with international commerce councils, such as the Japan–New Zealand Business Council. Through the national chamber, local branches were affiliated to the International Chamber of Commerce.

Footnotes
    • Quoted in E. C. Franklin, A century of Auckland commerce 1856–1956: a history of the Auckland Chamber of Commerce. Auckland: Auckland Chamber of Commerce, 1956, p. 26. Back
    • Les Cleveland, The anatomy of influence: pressure groups and politics in New Zealand. Wellington: Hicks Smith, 1972, p. 99. Back

The Manufacturers’ Federation

Beginnings

New Zealand manufacturing was farming’s poor relation through the 19th century and well into the 20th. Overwhelmed by imports and often frustrated by a lack of capital, manufacturers wanted their fledgling businesses protected. They formed local associations from the 1870s, and the national body, the Manufacturers’ Federation, was set up in 1927.

Buy home-made

 

Early manufacturers bemoaned buyers’ bias against New Zealand-made goods. Auckland’s industrialists took action, organising an exhibition of locally made goods in 1887. The three-month exhibition opened with a torchlight procession up Queen St and along Karangahape Rd. Five thousand families came to see the furniture, brushware, boots, woollen cloth, soap, candles, baskets, mats, rugs, condiments, perfumes, biscuits, agricultural tools, paints, jams and preserved meats on display.

 

Purpose

The federation went through two distinct phases. Underlying both was a concern with the promotion of manufacturing.

Until the 1980s the need for protection was the central concern. Focused on local rather than export markets, manufacturers sought government-imposed tariffs on imported goods. After the government introduced an import licensing system in the 1930s manufacturers sought to have it maintained.

In the 1970s the federation’s purpose expanded to include the development of export markets. Within a decade, the federation and the government embarked upon the dismantling of controls, which had come to be seen as supporting inefficient businesses.

Relationship with government

Conservative governments were generally unsympathetic to manufacturing until the 1960s. Before that, farmers (who earned virtually all of New Zealand’s export income), importers and British exporters who expected access to the New Zealand market all had more influence. When tariff protection was granted, it was piecemeal or limited. From the 1960s, manufacturers based in Auckland and Christchurch formed a closer relationship with the conservative National Party, and lobbied forcefully to protect their place in the domestic market.

Labour governments were more focused on manufacturing, because manufacturers were important employers. Despite this, it was a dire shortage of overseas funds and a surge in importing rather than the efforts of the Manufacturers’ Federation that persuaded the Labour government to introduce comprehensive import licensing in the late 1930s. The licensing became a form of industry protection. Its protective effect was increased by the disruption – and in some cases cessation – of imports during the Second World War.

After W. B. Sutch became head of the Department of Industries and Commerce in 1958, promotion of industry was extended. The department sought to foster industry and the export of manufactured goods. New Zealand manufacturers were protected from overseas competition through import licensing and tariffs. Later, export incentives, subsidised trade missions and a network of trade commissioners were all instituted.

The holy trinity

 

In the 1960s and 1970s the Manufacturers’ Federation was one of the ‘three feds’ which ran the country’.1 The others were the Federation of Labour and Federated Farmers. Both the labour and manufacturers’ federations shared a strong interest in retaining protection – it helped maintain full employment.

 

Manufacturers and exporting

In the 1970s manufacturers’ associations actively pursued export opportunities. With continuing strong support from government, exports of manufactured goods to Australia, Japan, the Pacific and Asia grew rapidly. In 1977 the federation set up the Auckland-based Export Institute to take over its export work.

Membership

Membership was highest in the South Island in the 19th century, then grew strongly in the upper half of the North Island as industry became concentrated around Auckland. At its height in the early 1980s, the Auckland Manufacturers’ Association had 1,800 members.

Economic reforms

In the 1980s and 1990s, economic reforms by both Labour- and National-led governments radically altered the position of manufacturers and their organisation. Manufacturers were battered by the removal of import restrictions, reduction of tariffs, low domestic demand, and the dollar’s rise after it was floated.

In the late 1980s, the Manufacturers’ Federation represented more than 2,400 companies employing 150,000 workers and producing 85% of manufactured goods. The sector recovered in the mid-1990s, but federation membership numbers remained below the late-1980s peak.

Faced with a manufacturing boom without tariffs or licensing, the federation re-invented itself. It no longer sought protection, focusing instead on the development of manufacturing as a local and international trading sector. As part of this shift, its associations began to offer training, seminars and talks, often export-focused.

Footnotes
    • Malcolm McKinnon, Treasury: the New Zealand Treasury, 1840–2000. Auckland: Auckland University Press in association with the Ministry for Culture and Heritage, 2003, p. 259. Back

The Employers’ Federation

Employers organised once workers did. Faced with an increasing number of strikes in the early 1890s, the first employer associations began to meet. After the Industrial Conciliation and Arbitration Act (I. C. and A. Act) became law in 1894 these groups solidified and others formed. In 1902 a national Employers’ Federation was set up, to represent the view of local associations to central government.

Purpose

The employers’ associations dealt with the voluminous detail of industrial awards. They alerted members to and advised them on critical employment issues, represented them in industrial matters, and lobbied government on issues of concern.

At the centre of this activity were the I. C. and A. Act, the government and trade unions. The act and its amendments provided a framework within which employers and labour could decide wages and conditions, with the Arbitration Court acting as umpire.

Members

Employers, motivated by the need for representation at hearings of the Arbitration Court, joined their local association and through that the federation. Employer associations first formed and were largest in the South Island, where industry was then concentrated. By 1921 the Auckland Employers’ Association had become the largest, with 1,200 direct members and numerous others represented by affiliated associations. In the early 1990s the Auckland group had over 4,000 members.

Employers’ Federation and unions

The Employers’ Federation’s relationship with unions was sometimes antagonistic. This was particularly the case with militant groups, such as the first Federation of Labour (1909–13) or the Boilermakers’ Union later in the 20th century. Over decades of working within the framework created by the I. C. and A. Act, this antagonism came to be ritualistic rather than real.

Penny argument

 

Wage negotiations over an extra penny an hour for electricians took more than a year to resolve in the early 1930s. The employers’ association and the union went in and out of negotiation and conciliation, never quite agreeing. There was no urgency – the penny an hour was already being paid to most workers, but the union wanted it written into the award. Employers were reluctant, because their decision would affect other employers’ wage payments.

 

The I. C. and A. Act fostered the interdependence of employer and labour federations. The second Federation of Labour (1937–87), like the Employers’ Federation itself, was part of the machinery of industrial relations and to a certain extent of the government. The Employers’ Federation was comfortable with this known adversary. The federation’s commitment to the existing industrial relations system can be seen in its rejection of Minister of Labour Tom Shand’s 1962 suggestion that union membership be made voluntary.

Employers’ Federation and government

The relationship between the federation and the government varied over time. The federation was so dismayed by the pro-worker legislation passed after the election of the first Labour government (1935–49) that a grand alliance of all business and employer groups was considered.

But the relationship was not necessarily good when conservative parties were in power. During the 1950s the conservative National government and employers had a harmonious relationship. In the 1960s, another National government was often at odds with the Employers’ Federation. Tom Shand, minister of labour for most of the decade, sought to make changes to the industrial relations system which the Federation rejected; he in turn rejected their requests for assistance.

1980s and 1990s reforms

Economic reforms radically altered the position of the Employers’ Federation and associations. Moving away from intervention and centralisation of industrial relations processes, the reforms began in the 1980s and continued into the 1990s, and were introduced by both Labour- and National-led governments.

Employers found themselves in a new industrial landscape. By the later 1980s compulsory arbitration was virtually gone and enterprise bargaining (where a particular business negotiated with its workers) became possible. The federation, working with the newly formed Business Roundtable, began to actively campaign for further industrial relations reform. The National government’s Employment Contracts Act 1991 removed the last traces of the old order.

The Employers’ Federation was now dealing with individual contracts and decentralised wage bargaining. The work it had done for decades was transformed, and in the 1990s the member associations had no choice but to change.

New services were offered and existing ones expanded. Negotiation, training, legal representation, industrial information, wage surveys and marketing all became available on a user-pays basis.


New organisations, 1970s onwards

Business Roundtable

The New Zealand Business Roundtable began in 1976 with informal meetings between a handful of senior business executives, who were frustrated with New Zealand’s highly regulated industrial relations structures and the government’s wage policies. Around 1980, the organisation began to be called the Business Roundtable, and in 1986 a permanent office was set up with ex-Treasury official Roger Kerr as director.

Purpose

The Business Roundtable favoured the restriction of government activity to core political functions, and open, competitive markets free of government subsidy or control. The Roundtable argued that business should not seek government assistance. In addition to its focus on business and industrial relations, the Roundtable advocated change in welfare, health, education, government structures, accident compensation and the tax system. It recommended deregulation, privatisation of many government activities, and lower taxes, all with the aim of limiting government.

U-shaped table

 

The table around which the Business Roundtable meets is not round. A U-shape is preferred but, as meetings move from centre to centre, whatever is available is used.

 

Membership

Membership of the Roundtable is by invitation. Members have usually been chief executives of large companies. They represent public and private companies (both New Zealand- and overseas-owned), cooperatives and state-owned enterprises. In 2009 a group of 53 made up the Roundtable.

Relations with government

The Business Roundtable’s connections with government and state-owned enterprises were strong in the 1980s and 1990s. Its influence lessened between 2000 and 2008. During this period the Roundtable had a far closer relationship with the National Party, the main opposition political party at the time.

Business New Zealand

In 2001 the Employers’ Federation and the New Zealand Manufacturers’ Federation merged. Business New Zealand was the new national umbrella group, and the four regional organisations became known as employers’ and manufacturers’ associations.

Membership

In 2009 Business New Zealand included the Business Council, Export New Zealand and a major companies group. Through its regional organisations, it represented 14,500 companies. More than 70 industry associations, representing 76,000 employers and 80% of private sector jobs, were affiliated.

Purpose

Business New Zealand represented the views of private-sector employers. Its concerns were international competitiveness; the balance between employment, economic and environmental legislation; and limiting compliance and tax demands on business.

New Zealand Manufacturers’ and Exporters’ Association

The New Zealand Manufacturers’ and Exporters’ Association was set up in 2007 by the Canterbury Manufacturers’ Association (CMA) and the New Zealand Engineering Federation. The CMA had withdrawn from Business New Zealand, wanting a greater focus on manufacturing and exporting than the organisation provided.


Sector and trade groups

Sector and trade organisations represent the interests of whole industries, such as fishing; whole sectors, like retailing; and trades, such as plumbers or builders. Sector and trade groups are usually made up of a number of regionally-based associations.

Like other employer and business groups, sector and trade organisations provide services for members. These often include:

  • codes of practice
  • assistance with disputes
  • advice on employment issues, government legislation and regulations
  • lobbying government on legislation and regulations
  • technical information and training.

Some organisations also provide awards to businesses in their sector.

Road Transport Forum

The Road Transport Forum was formed in the late 1990s to provide the road freight industry with a single national voice. It deals with a range of issues related to government, including road user charges, road construction and vehicle regulation.

The forum’s predecessors formed in the 1920s and 1930s. They were regional owner-driver groups (generally known as owner-carrier or owner-driver associations) and a fleet operator group (the New Zealand Road Transport Association).

Over the years, these organisations joined and came apart, changed names and reformed.

Drinking on the job 

Early meetings of the Licensed Victuallers’ Association, if held in the morning, had the minutes recorded in beautiful copperplate handwriting. If held in the evening, the handwriting deteriorated alarmingly, becoming ‘very difficult to decipher … for reasons that are probably obvious’.1

Hospitality Association

The prohibition movement’s vehement opposition to the sale of liquor drew hoteliers together. When the Clutha electorate voted to go dry in 1895, ending the sale of liquor anywhere within its boundaries, local groups began to organise. Wellington, Auckland, Christchurch, Hawke’s Bay and Greymouth were among the first branches of the Licensed Victuallers’ Association.

Electricity sector

A sector will usually have more than one organisation. Groups in the electricity industry in 2009 included:

  • the Electricity Networks Association, representing line businesses
  • the Electrical Engineers Association, which was concerned with technical issues
  • the Energy Management Association, part of the Institute of Professional Engineers, which was open to all people and organisations within the energy management industry
  • the New Zealand Wind Energy Association
  • the Major Electricity Users’ Group.

Building trade associations

The first building trade associations were set up in the 1800s. They were business and employer organisations rolled into one, providing a network, lobbying government and helping members resolve employment issues. Once the Employers’ Federation was set up, many trade associations became affiliated.

In some trades there are more than one business group. The Registered Master Builders’ Federation was set up in 1892, and the Certified Builders Association more than a century later, in 1998. Through its 22 regional associations, the federation represented more than 1,800 member companies in 2009. The association represented 1,700 builders, all with trade qualifications.

Forestry

The New Zealand Forest Owners’ Association (FOA) was set up in 1926, and the smaller New Zealand Farm Forestry Association in 1957. Both organisations were concerned with resource management, research and government handling of forestry issues.

They had been preceded in 1917 by the Dominion Federated Sawmillers’ Association, which represented 75 mills. The association focused on lobbying government, attempting to get export restrictions removed and to limit imports. As millable native forest was reduced, plantation forestry became more important, and the FOA became a more significant body.

In 2009 the FOA represented New Zealand’s large forestry companies. Its members owned or managed more than 80% of the country’s plantation forests. Farm Forestry Association members owned or managed 100,000 of New Zealand’s 1.88 million hectares of forest.

Footnotes
    • Bill Brien, 100 years of hospitality in New Zealand: the people, the politics, the passion. Wellington: Wellington Museums Trust in association with the Hospitality Association of NZ, 2003, p. 12. Back

Business organisations and climate change

Climate change and environmental degradation provided a new reason for business organisations in the 1990s and 2000s. Notable new organisations were the New Zealand Business Council for Sustainable Development and the Sustainable Business Network.

These groups were willing to see New Zealand at the forefront of responses to climate change. Other business organisations argued that New Zealand should follow rather than lead. The Greenhouse Policy Coalition, Business New Zealand and the Business Roundtable predicted damage to the economy and businesses from too fast a response.

New Zealand Business Council for Sustainable Development

The New Zealand Business Council for Sustainable Development (NZBCSD) was formed by a group of well-known businesspeople in 1999. The council promoted sustainability in business, arguing that it contributes to social progress and ecological balance, protects quality of life and enables profit-making.

Membership

By 2008 the council had 66 members, from the resource, manufacturing, retailing and service sectors, generating 34% of New Zealand’s GDP. Membership was by invitation.

Council activities

The NZBCSD’s first project, and a condition of membership, was triple-bottom-line reporting, sometimes known as sustainable development reporting. A reporting guideline was officially launched in 2002. A number of NZBCSD members issued sustainable development reports, including Hubbard Foods, Meridian Energy, Mighty River Power, Sanford Seafoods, Landcare Research, the Warehouse and Urgent Couriers.

Other areas of activity were zero waste, climate change, youth employment, schools partnership and sustainable-labelling projects. Supply chain and emissions management projects were also developed.

Green profits

 

New Zealand’s environment was traditionally the concern of ‘lefty, hemp wearing, mung bean eaters,’ according to Geoff Ross, founder of vodka company 42Below. But Ross, a self-described ‘mega National supporter,’ put the case for business interest in the environment bluntly: ‘[W]e should care about what’s happening to our globe and we should care because here’s an opportunity to make a lot of money.’1

 

Sustainable Business Network

The Sustainable Business Network, set up in 2002, amalgamated three small groups: the Environmental Business Network, Businesses for Social Responsibility and Triple B. Its purpose was the embedding of sustainable business practices in New Zealand.

In 2007/8 the Sustainable Business Network received a third of its funding from government. This funding was cut in 2009, as part of a government drive to trim spending.

Membership was open to businesses of all sizes, government departments, local bodies, not-for-profit organisations and research institutes. In 2009 it had 700 members. Major activities were:

  • a business sustainability program (the Get Sustainable Challenge)
  • regional and national awards for sustainable business practices
  • an online directory of products and services
  • Greenfleet, which encouraged vehicle efficiency through a combination of practical resources, advice and carbon offsetting.

Greenhouse Policy Coalition

The Greenhouse Policy Coalition was formed in 1996, and represented almost all of New Zealand’s largest users of power. Its members included New Zealand Steel, New Zealand Aluminium Smelters, Solid Energy, Fonterra, Methanex New Zealand and four pulp and paper manufacturers.

In 2009 the coalition argued that implementing the Kyoto Protocol on climate change was a significant risk to New Zealand’s economy. It called for a moderate and measured response by government.

Business New Zealand and the Business Roundtable

In relation to climate change, Business New Zealand emphasised the need to safeguard economic growth while attempting to limit greenhouse gas emissions.

In 2009 the Business Roundtable accepted that climate change was occurring, but argued that New Zealand should not limit greenhouse gas emissions until Australia had done so. Government action should be limited to a financially neutral carbon tax and subsidised carbon sinks. An emissions trading scheme, with a price for carbon set by the market, would expose businesses to great uncertainty.

Footnotes

External links and sources

More suggestions and sources


How to cite this page: Megan Cook, 'Employer and business organisations', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/employer-and-business-organisations/print (accessed 8 December 2019)

Story by Megan Cook, published 11 Mar 2010