Support Workers (Pay Equity) Settlements Amendment Bill

Sorry, I was going to continue the wide-ranging debate, as advanced, indeed, by the Hon Michael Woodhouse. We are getting into a very detailed historical argument here. I don’t want to cast aspersions, necessarily, on Mr Woodhouse or his colleagues at the time—although, of course, we’ve done our level best to. I do want to make this point: the italicised heading just prior to section 8 of the existing legislation is “Extinguishing and barring claims under Equal Pay Act 1972 by support workers”. That was the purpose—it was to extinguish the claim that had been advanced.

The Hon Michael Woodhouse is right. It was at the point of litigation. The claim had been mounted, but because it was a piece of law that largely had been a dead letter for—what?—45 years up to that time, a number of aspects would have been tested in court. But, nevertheless, I’ve seen an account that said that the Rt Hon Bill English—as I think he was at the time—had contacted one of the union leaders and said, “You keep winning in court. We should sort this out.”

There was an agreement done between the unions and the Government of the day, and it gave the workers at the time improved pay rates—not pay equity rates, but improved pay rates—and another thing that they were very deeply committed to, which was a training regime funded as well. They could lift their skills and lift their credentials—because it was a credentialed training under the New Zealand Qualifications Framework—which would improve their marketability in the labour market. So it did those things.

But the one thing they had gone to court for—the one thing they were fighting for—was pay equity. That was, effectively, kicked down the road for five years. It’s all very well for the member and other members opposite to say, “Well, you had five years to sort out a framework.” There was no framework. Pay equity could not be advanced. This is a group of workers—61,500 of them—who are dispersed right across the country amongst 1,000 employers. Some are represented by unions; many are not. There was no framework that could be easily stood up—certainly under our current collective bargaining framework—that would have allowed them to negotiate on behalf of both represented workers and unrepresented workers. I know that’s a challenge to the purity of the principles of the ACT Party, but the reality is this is a workforce that is low paid and difficult to organise but who want to be paid fairly, and they should be paid fairly, and there should be some minimum standards. There is no framework in place for that, and there could not be discussions about pay equity or rates approximating pay equity, because that was specifically barred until 30 June.

The discussions I’ve been having with the unions and the providers since last year is: how do we get ourselves gearing up, ready to go, once that bar to negotiating a pay equity claim is gone? That’s what we’ve done. We needed to increase and protect rates as well as get the other processes set up ready to get pay equity going. And that’s what we’re doing.

That is, in fact, the background to the legislation, and that is quite consistent with the title as expressed in clause 1.

Thank you, Mr Chair. I won’t prolong overly this particular point, except to say that the court case itself, I think the Minister described as a pay equity claim; actually, it was a claim for a declaration that section 9 of the Equal Pay Act 1972 applied not only to pay between men and women but to—I can’t remember the exact words—equal pay for work of equal value, or something to that effect. It was that the court may state the principles for implementation of equal pay, and therefore not having appealed that, once that court case had ended, a whole new pay equity process had to start, which was the court then would have determined, on the basis of criteria that were not laid out, that were never intended, too, I don’t think—in fact, that was an acknowledgment by the courts—that the 1972 Act never intended that the legislation as it was written would be applied in that way but nevertheless it should be. That’s fine; I get that. That left a huge gap in the framework for being able to determine how to establish work of equal value and then to make sure that pay was equal as well. So I make that point simply to say that the pay equity journey had really only just begun in the TerraNova case despite being before the courts for several years, and the Government cutting it off at the pass was not intended to take away access to justice in this regard; it was intended to fast track it, and that was the point of my earlier call. I will end my contributions on that, because we could go round the traps on it.

My main concern, and what we weren’t able to do in a select committee process, which we were in May 2017, is to examine the manner in which the funding of this settlement is going to take place. We know from the bill—it’s pretty easy maths to determine—that this is a 4.6 percent increase over 18 months for the workers themselves. And what followed last time was a very, very complicated formula being established to work out, on an averaging basis, how each aged-care provider was going to be remunerated—and was going to be compensated, effectively—for the Crown legislating for increases in pay. That took quite a bit of work even before the bill got to the House, and then, through a shortened select committee process, it considered issues around holiday pay, relativities, and a few other things. And I’m sure officials—who actually look a bit familiar; it’s starting to come back to me—may have been involved in it. What I’d like to know is how that’s been dealt with in this bill, because I think it’s really important that we examine this through the lens of the employer as well as the employee, to make sure that these people who are already under significant financial pressure are actually no better or no worse off as a consequence of the law that we’re about to pass. That was what we attempted to do in 2017. I think largely we achieved it. There were some problems at the margins.

And I also would like to get a sort of reconciliation between that formula and a transfer of money, because it’s not clear from my reading of the Budget where this money resides, with the communication that was made by Health New Zealand to the Aged Care Association of an increase in their—it’s not bulk funding, but, you know, their sort of funding envelope of 1.9 percent. So I want to just clarify whether, or that, the 1.9 percent offer is separate from the 4.6 percent increase that’s being legislated for tonight—what the quantum of the money being appropriated in order to compensate for the requirement by the employers to actually pay that extra 4.6 percent from, effectively, next pay—and what the total quantum of that amount is, just so I can do some back-of-the-envelope calculations.

Thank you. I just want to ask the Minister to reflect on the role of care and support workers. What do these workers do, and why are they important? Well, these workers care for the most vulnerable people in our communities. They care for people in aged-care facilities who may suffer from dementia, may have a whole lot of physical issues that make them extremely vulnerable and at times anxious about the person who cares for them, and they come to rely on these support workers in a way that is akin to relying on a family member.

So this pay equity claim, or this proposed settlement, while it resolves an immediate problem for the Government, which is that time had run out on the existing legislation and so they’ve offered a 4.6 percent pay rise—significantly less than the cost of living is increasing right now, Minister—actually, if we take a step back and look at what is the role of these support workers, how do they help the people they support to live their best lives, I’d actually have to ask you, Minister, as a member of this Government, are you actually valuing the people that these support workers care for highly? Because if we look at, say, for example, the way that carers are funded to support children with disabilities who want to attend their local school, there is an extremely convoluted process to apply for Ongoing Resourcing Scheme funding, ORS funding.

Many parents have told us, as we’ve gone around the country asking people what the problem is in your community that’s important to you, they’ve said, “Actually, it’s getting the ORS funding and a suitable carer to support my child going into mainstream education so that they can have the benefit of the educational opportunities that my other children do, who don’t need this support.” So while this piece of legislation brought to the House under urgency addresses a short-term need around the legislative fix to make sure that these care and support workers are actually compensated fairly—although a 4.6 percent pay rise when inflation is running at almost seven doesn’t seem to cut it—we need to ask the Government: what are you doing to support the entire sector? Because during the last couple of years, when we’ve had the COVID lockdowns, parents have not been able to access carer support hours and actually have that respite care that enables families to stay healthy and allows particularly children or older people who live in family homes, who might have dementia or other significant needs that place a burden on families—those families are suffering because they haven’t been able to get access to the carer support that they need.

There is a risk—a significant risk—that if these workers aren’t paid adequately and actually aren’t supported adequately with training and development, they will leave this profession and the families who depend on them will then be left all at sea. Parents might be unable to work if they can’t get support for a child with a disability. Family members who have an elderly person living with them might not be able to work. So it has a massive knock-on effect to the economy and to the health of communities. So, Minister, I’d just like you to address in your response what this means, this settlement, this Support Workers (Pay Equity) Settlements Amendment Bill, and what’s the wider context. What’s next, Minister? Because this is an issue that affects many, many families, people with children, adolescents, as well as elderly people. Thank you, Minister.

Thank you, Mr Chairman. I thank the member for his question, the points that he’s raising, and I’m very interested because one of the things that this Government is in the process of doing is lifting remuneration within the health sector generally. This is not an even path. It happens in stages and in parts, and eventually it will come together. But the member will be aware, we’ve done pay equity agreements with admin and clerical staff for district health boards. We’ve done one with teachers. We’ve reached an agreement with the nurses’ organisation. They seem to have backed out of it. We’re currently negotiating pay equity arrangements with midwives, and we have a number of others in the queue—allied health workers is one of them.

For the lower-paid workers—and this is one of the groups of them; home-care and support workers—they have been seeking pay equity. They want to have the chance to get that. And as I’ve indicated to the House already a couple of times, we have been working with the providers and the unions to get back everybody around the table to understand what a pay equity arrangement—what it entails in terms of the technical work and then reaching agreement. But everybody is ready to go, and we want to get that going a little further.

There are other parts of the health workforce that we will also have to deal with, what we call the funded sector, so what otherwise might be described as the private sector of the health sector, but actually heavily State-funded. Primary care and aged residential care are two classic examples. We know we will very soon have a basis on which we can engage with the employers in those sectors to talk about how we start to lift the wages of the workers in those sectors. That’ll not just be, you know, the registered nurses and others carrying qualifications but also the healthcare assistants in those areas as well.

Over time, we are doing everything we can—bearing in mind as that member and his party will be well aware, Governments are under budgetary constraints. But over time we are seeking to lift wages in those sectors. For those providing help and support to people who need it, be it for health reasons or other reasons, whether because of their own health or because, you know, it’s funded out of ACC because of injury, or for whatever reason, the member is right: people do need that help and support, and it’s what actually enables them to better participate more fully as citizens in the community.

So that’s the context in which this is happening. This is a group of low-paid workers within the broader health system who we do have to support to get better pay, to continue to provide the help and support that many people are dependent on them for.

Thank you, Mr Chair. I just want to reflect on the fact that I think everybody across the House has spoken on the important contributions that support workers make, and so just acknowledging that. I think there are some differences that we’ve picked up from the first two readings in terms of where we would like to go as a Green Party, so I’m hoping that the Minister can help me answer some of these questions that we’ve gotten along the way.

First of all, I was wondering whether unions have told the Minister what increases were needed to maintain the 2017 value, and if so, what was that amount? The reason why I’m asking is because my colleague Jan Logie did table an amendment which is basically aiming to lift the minimum rates of pay in the principal Act by $7 per hour compared to the 2021-22 rates in Schedule 2, clause 2. We did note that the current rates proposed in the bill equate to a 3 percent increase from the 2021-22 year, which does not even match inflation. So those do present a significant increase, and these rates that we put in the tabled amendment were endorsed by the PSA, E tū, and New Zealand Nurses Organisation (NZNO) members, and they represent the increase that support and care workers are seeking. So, keen to understand what conversations he’s had with unions to reach the rate that is presented in this bill, which ultimately reflect a 70c increase. The other question I had is: how do these pay rates take into account the living costs indexation in clause 3 of Schedule 2 of the principal Act? Also, keen to know what percentage increase will support workers get compared to their current pay, noting this pay takes into account the 2021 indexation.

And I also wanted to note the fact that support workers, those on temporary visas, currently, under the new accredited employer work visa scheme that is being set up—they’re one of the sectors that basically have a median wage exemption. I just wonder whether the Minister had considered whether this bill presents a missed opportunity to ensure that we don’t need to carve out an exemption, because I think the exemption is a recognition that the pay is low, and those sectors that are being given exemptions I think are sectors that are traditionally low paid. So if we’re all talking in the House about how much we value support workers, I just wonder whether this could have been an opportunity to reflect that and have starting rates that are above the median wage so that migrant workers entering that profession do not need to be given an exemption.

Thanks, Mr Chairman. I thank the member Ricardo Menéndez March for his questions. I hope I’ve understood them correctly, but I’ll respond as I think I’ve understood the points the member has raised.

I hear what the member has said about a proposal to increase to maintain the 2017 value. The member has said that that is what a Supplementary Order Paper (SOP) by the member Jan Logie does. I haven’t seen that SOP. In my engagement with the unions, they did put up some proposals, and I know that the Minister of Health in their engagement considered carefully those proposals. They looked a lot like the rates of pay that would apply following a pay equity exercise, and we were conscious of the fact that section 8 of the current legislation does not allow pursuit of a pay equity claim. We thought that it was important that to get the rate that the members are seeking, as a consequence of pay equity, we should go through—we must go through—the pay equity framework that is now set out in the Equal Pay Act, which followed the enactment of this legislation. I think the Hon Michael Woodhouse was absolutely correct; the previous Government did introduce amendments to the Equal Pay Act. They were revised by this Government, and we’ve now enacted that. But we now have a framework for that that wasn’t in place at the time that these workers were litigating through their unions or engaging with the previous Government over this legislation.

So what we have come up with is a rate that takes into account the statutory triggered increase in November last year, as well as a further top-up funded this year to achieve a total increase compared to 1 July last year of 4.6 percent. And I know some members are saying we should have fully inflation-adjusted. We’ve never—I don’t know of any regime that fully inflation-adjusts wages from time to time. Sometimes, actually, wages move ahead of inflation, as has been the case for some time in this country. But in other times it doesn’t. Over a period of time you want wages to grow, but in a single year or a single period, that may not be the case. And we have not achieved that in this particular instance.

In terms of the temporary visa workers—I’m not fully familiar with the immigration matters that the member who’s just resumed his seat is raising. In the end, what we’re motivated by is the need to increase rates, provide some ongoing protection for those rates, and do the most important thing, which is set out the basis on which the parties can enter pay equity discussions and negotiations.

Thank you, Mr Chair. I would just also like to put on record for the Hansard, Michael Woodhouse’s comment that under a National Government wages do stay ahead of inflation.

Hon Andrew Little: No they don’t. Ask the Minister.

NICOLA GRIGG: I would like to turn the Minister’s mind to clause 8, thank you Minister, which amends Schedule 2 to set out the new rates. I have been listening and trying to keep up with the debate, but I don’t think the Minister has answered the question around what is the total figure for the budgetary appropriation. We are very interested in how that rate of 4.6 percent was determined. As has been canvassed already, we do know inflation is running at 6.9 percent, and I’m no mathematician, but by my calculation that would indicate that these care workers, like the rest of New Zealand is, will be going backwards with this negotiation.

The Minister, as well as answering those two questions, has also previously talked about the incentive regime for further training and development, so I’m quite interested to hear from him about what consideration or what matrix is put in place to compensate for that. What further rates consideration—is it over and above the 4.6 percent, or is it all inclusive?

Finally, I’ve seen some feedback, and I’d be very interested in the Minister’s interpretation of the feedback from the sector as to how this 4.6 percent has been received.

Thank you, Mr Chairman. I know that Nicola Grigg’s—the member who has just resumed her seat—first statement wasn’t a question; it was an assertion. And, of course, it was wrong. Wages had not kept pace with inflation under National, and that is one of the reasons we’re dealing with the nurses the way that we are—because, after nine years, their wages went back in real terms. Anyway, I’ve beaten that drum before, and, hopefully, that’ll be the last time I beat it tonight.

On the issue about training that the member raises, I mean, the legislation sets out, effectively, a matrix depending on length of service and the training that you’ve had. So that is already there; that won’t change. The existing training regime will continue, and that continues to be funded as well, so there’s no change in that respect. We need to continue to provide opportunities for this group of workers to become credentialed and grow their skills and therefore increase their wages, and that will continue to happen.

In terms of the rate, if the member is asking me do I think this rate is universally accepted by both providers and unions, I can tell the member, no, it is not. They have both communicated to me—both sides have said to me—“We think the rates should be higher.” What I have looked at is the fact that, at the moment, across pay, settlements generally are running between 4 and 5 percent. This sits between 4 and 5 percent, taking into account the increase in November last year and the further increase that this Government has backed. It is a 4.6 percent increase. That is consistent with pay adjustments that are happening in other parts of the economy right now.

To the Minister one more time: what is the total appropriation?

There’s an appropriation in the Budget this year that covers the adjustment that took place at the end of last year. I don’t have that figure in front of me. And then, in terms of the further top-up—and officials are going to be really studious and helpful—in terms of the additional funding, for the purposes of this legislation, the total amount for the four-year period starting 1 July is $327.38 million. That’s funded through a number of sources, but that is what the value of this particular matter is.

Thank you. Just hearing the Minister’s previous answers, I want to encourage the Minister to have a look at the tabled amendment from Jan Logie; it’s on the Table. Like I mentioned, it is endorsed by the Public Service Association, New Zealand Nurses Organisation, and E tū. I think it reflects the unions and what those aspirations [Audio issue] what is currently being presented.

My question was also around whether this legislation brings support workers closer to full equity than the 2017 settlement reached under a National Government or does it actually create a wider gap once cost of living and [Audio issue] wages in comparable sectors are taken into account?

The other question I had was going back to the immigration point—and I know the Minister said he’s not fully on top of, I guess, those interactions regarding pay and temporary visas, but basically with the Accredited Employer Work Visa, there is a requirement that employers have to pay migrant workers coming in the median wage for them to be employed. The reason why I’m asking in relation [Audio issue] because we know that migrant workers do make up a substantial portion of the workforce in that area, and at the moment, there is, effectively, an exemption to support workers needing to be paid the median wage. I think that’s just a recognition that it is a low-paying sector. Other sectors that have that exemption include hospitality and tourism. I think my concern is that if the bill goes through at the rates that we have, basically, support workers who are coming on temporary visas will continue to have an exemption. I think it just will be telling that we accept the sector is going to be low paid.

So I guess my question is around whether the Minister feels comfortable having those workers as part of that carved-out exemption, as opposed to just bringing them in line with many other professions who are paid above the median wage as a starting rate. So I’m eager to, hopefully, get the Minister’s views on Jan Logie’s tabled amendment as well as the other questions I’ve raised.

I will have a study of Jan Logie’s tabled amendment. As I recall the member saying, if it calls for an increase of effectively $7 an hour then no we won’t be supporting that. That has to be funded and it’s not.

In terms of the two questions the member raises: is it increasing the cost of living cap, and is it right that, effectively, we’re still relying on a group of workers from overseas who, in order to take up this work, end up getting an exemption from rules that would otherwise apply to those obtaining a work visa. Look, I agree with the sentiment that I think underpins what the member is asking. The whole purpose of this for this group of workers is to get on with the most important thing, which is getting them pay equity—getting them paid at rates that are not based on sex-based discrimination, which is pretty clearly what is happening in this particular industry. There is a framework for doing that, it’s the Equal Pay Act, as amended. There is a process for doing it. For this group of workers, it was not possible for anybody to commence on that process until after 30 June, but it’s important in the meantime we afford appropriate protections, particularly of existing pay rates. And those protections are particularly important for unrepresented workers, which is the large chunk of these workers. So I’m satisfied that as an interim step this is a good step to take, but I remain committed and, in fact, most of my effort has gone into making sure that we set up all sides of the pay equity claim to proceed with that with alacrity and get pay equity for these workers just as quickly as possible.

Thank you, Mr Chair. I appreciate the Minister’s informing the committee of the sum of $327.8 million being the envelope to give effect to this legislation. By my calculations—and, indeed, they are very rough, back-of-the-envelope calculations—that constitutes about 16 percent of the $2.05 billion that was the original funding envelope which increased care and support workers—at that time, the 55,000 of them—by an average of 21 percent over the five-year period between 2017 and 2022. We’re now dealing with 61,000 care and support workers, and it just seems to me that the $328 million - odd isn’t going to be enough to fund what is essentially a 4.6 percent increase for those 61,000 workers.

I raise this in the context of the other two questions that I had in respect of the funding, which was the relationship between that amount of money and the 4.6 percent increase with the offer by Health New Zealand of 1.9 percent.

The question is about that $328 million, which the Minister acknowledged, in his response, was over and above the labour cost index adjustment that was made at the end of last year under section 8 of the Act, where, if inflation had gone above 1.7 percent—I think it was—or something, there was a formula in the Act that provided for an increase. I’m not sure, actually—in the time that I’ve had to look at this—whether the 4.6 percent increase calculation I did was correct in respect of what the current rates are, because I used the current rates in the Act, but those rates must be below what is currently being paid, in which case the increase is actually less than 4.6 percent.

Now, the Minister in one of his interventions said, “Oh, well, the prevailing rates at the moment are between 4 percent and 5 percent. This is 4.6 percent. We’re kind of in the middle.” But I understand—and I’d appreciate the Minister correcting me if I’m wrong—this is going to be for a period of 18 months. So the annualised effect of that is only 3 percent, which means that this is well behind what the other pay increases within the health sector are. I’m very open to the Minister and his officials challenging my math on that.

But my central question is about the relationship between this offer, this legislative settlement—it’s not even a settlement; it’s just a legislative increase—and the 1.9 percent offer that’s being made right now to aged-care facilities. Does that 1.9 percent include the $328 million, and are they going to be expected to pay a 4.6 percent increase in staff costs with 1.9 percent of their total budget?

Now, I used to run healthcare organisations. I’ve got a pretty good understanding of the cost base. Between 66 percent and 70 percent of the total cost of running an organisation are staff. Health New Zealand were informed by the Aged Care Association that their assessment of the increases in costs right now are running at about 9.4 percent, and that’s what they were seeking. Let’s just assume that for two-thirds of their cost base, they’re going to get 4.6 percent. Then, for the other third of their cost base, where general inflation is running at—what is it now?—

Nicola Grigg: 6.9.

Hon MICHAEL WOODHOUSE: —6.9 percent—thank you, Ms Grigg. Then that’s another 2.1 percent on top of the costs that they’re including—that’s a third of the current inflation.

Now, that’s actually gilding the lily a bit, because, in my experience, healthcare cost inflation runs at between 50 and 100 percent—more than general Consumers Price Index inflation. By any measure, the 1.9 percent ain’t gonna be enough for the aged-care facilities to go anywhere but backwards pretty quickly. So it’s very important for the committee to understand whether the offer of $328 million is on top of another general offer for increases in bed fees and so on that is intended to cover those other costs.

Thanks, Mr Chair—really just following on from the Hon Michael Woodhouse’s question. If I can give a very practical example from Presbyterian Support Southland (PSS), who I’ve met with at least three times in the last year, canvassing this very problem that they have. So, again, this 1.9 percent increase that they have been given—they have informed me that they are going to run at a $1 million deficit. I might have to ask my colleague Michael Woodhouse to do some maths for me. They have a $23 million annual staffing budget, and I think you made the estimate that it might be about two-thirds of their cost base would be in that staffing area. So we’re talking about a really significant addition to their deficit if we are talking about this amount. I haven’t quickly done that, but I’m thinking—what are we talking?—that might be about $16 million or $17 million. And I think the 4.6 percent on that might be nearly $500,000. So, instead of running at a $1 million deficit, they’re going to be running at a $1.5 million deficit.

I’m keen to know, because I know they will be wanting to ask this question of me, because they visit me and talk to me on a regular basis—their chair and their head of nursing and their chief executive. So are they looking at this 4.6 percent increase that needs to be paid out—and to these caregivers that definitely need to get this increase—but are they looking at having to pay that out within the 1.9 percent increase they have been given? And, as my colleague said also, their increases are not just the same as the cost of living. They gave the examples to me of the medical supplies and the percentage increases. Some of them were getting up to 20 percent increases—certainly not a 6.9 percent increase—for some of their medical supplies. So is this entity that provides more beds, I think, than any other single entity in Southland—more aged-care beds—looking now at a $1.5 million deficit, or is there going to be additional funding to cover the 4.6 percent increase to their caregivers?

That’s one very big example, but, equally, for all of the home-based care entities, they are running on really small margins, which is why I get contacted by families who have got family members with muscular dystrophy and other very, very serious medical issues who are concerned that their healthcare worker doesn’t turn up sometimes, because they don’t have enough; they are not being replaced when someone is sick. So I would think that the impact on the individuals that are relying on that healthcare might actually be even greater in those home-based care situations. So, Minister, I’m really keen to be able to go back to particularly the PSS with an answer. And I don’t want to have to go back to them and say the Minister of Health just refused to answer that question, even though he was asked it four different ways; to say that he didn’t care enough to tell them whether they’re facing a $1.5 million deficit instead of a $1 million one. Thank you very much, Mr Chair.

The discussion—I’ve yet to hear anybody ask a question about the bill—is ranging very widely over a lot of broader policy areas.

On the funding issues, as I understand it, the offer that has been made to aged residential care in terms of the funding agreements they have currently with DHBs, eventually with Health NZ, is a 3 percent offer to cover their full range of costs. I understand the members are seduced by the calculations by Simon Wallace of the aged and residential care association, but the offer that’s been made for aged and residential care is not 1.9 percent; it is 3 percent. So there is funding available to fund this increase for home care and support workers, whether it’s from health money, ACC money, or Ministry of Social Development money, because we need to support these workers.

In the end, what’s most important, and what even the providers and their representative tells me, is they are keen to get on with the thing that will make the biggest difference in terms of recruitment and retention, and actually properly supporting this workforce, and that is getting on with the pay equity claim. That hasn’t been possible for the past five years. It was not possible to commence until 1 July this year. That is what this bill facilitates.

That opening salvo really does behove a response. The idea that actually understanding what the cost of this bill is on, firstly, the taxpayer and then, secondly, potentially on the aged-care facilities is not part of the bill, I think is an outrageous comment. The very point of the bill is to pay money to people. The problem we’ve got as a committee of the whole is that because we’re rushing this through under urgency and it hasn’t had the scrutiny of the Health Committee and the departmental disclosure statement makes zero reference to the cost, that means this committee—this committee—has to do that work. And it worries me that the Minister deflects what I think are pretty straightforward mathematical questions about the cost of this legislation. Sure, there’s no particular clause in the bill that says that’s the total sum, but that’s the effect of the clause in Schedule 2, and I think we need to know it.

Now, I think Penny Simmonds has made a very good attempt at assessing the potentially harmful effects on a sector that is already on its knees. And it worries me—the Minister hasn’t said it, but I think his flippant comments about the seduction of comments by Simon Wallace underscore the animosity that this Government has towards the sector, because some of them happen to be connected to property organisations like Ryman and Summerset and so on. That is not the organisations we’re talking about. It is the organisation that Penny Simmonds is talking about: Presbyterian Support services, a religious-based not-for-profit that’s already losing a million dollars a year in the Otago and Southland region alone. That deficit could blow out by as much as 50 percent on the passage of this bill, if our maths is right, and I’m very, very happy for our maths to be wrong. In fact, I really hope that it’s wrong, but I haven’t heard an answer to the question.

What we did hear was, OK, the 1.9 percent is actually 3 percent. I didn’t use Mr Wallace’s claim of 9.4 percent. I merely mentioned it, but then in my own calculations used Consumers Price Index (CPI). And actually that’s a very conservative estimate, as I mentioned, because health cost in inflation always runs higher than CPI. It is almost gravitational certainty that that is the case. And I’m sure Simon Watts, as a former chief financial officer in the DHB, went greyer because of the stress of trying to make the books balance of the Waitematā District Health Board, a heroic effort and very successful when compared with other DHBs. So it is wrong to suggest that these are (a) questions not related to the bill or (b) somehow based on some seductive numbers that Mr Wallace has come up with. He represents a group of organisations that are caring for our most vulnerable, that are on their knees, and that want to know whether or not this bill when passed is going to put them flat on their backs.

It’s an answer I’ve already given. I’m happy to give it again. I’ve spelled out what the appropriation is, or at least what the cost is, of this: $327 million over the four-year period. The cost of the increment that was triggered last year is an additional $40 million. That is what the cost of this is to get these pay increases up. No one is being left high and dry. We’ve worked closely with the sector on it, and I can tell you that the advocate for the providers with whom I have been dealing has been very constructive, very clear in his representations about what his sector agrees with and doesn’t agree with, but equally very clear on behalf of all of the providers that he represents.

What the sector is saying is they want to get on with the most important thing, which is the pay equity claim. So this provides an increment to the wages, and the various providers, a thousand of them—a thousand of them—will be funded accordingly to meet these costs, as well as the cost of the training, as that is taken up. There is nothing further to add by way of an answer to the question about the cost of this. That is the cost of the increase, the total increase, made up of the increment last year, an increment this year, and that enables us to get a pay increase to these workers that is not out of step with what is happening elsewhere in the labour market, provide some protection for that, and enables us to get on with the pay equity claim.

Thank you. I’m acknowledging that, because this is in urgency, we haven’t had the time to go through a proper select committee process to maybe unpack some of those broader implications of the bill or the process that the bill has gone through, so I’m keen to understand why are we having this in urgency. We’ve had five years to, basically, address this and put forward some updated figures. I hear the Minister of Health mention that he’s not supportive of the tabled amendment by Jan Logie, but, I mean, the tabled amendment does reflect the aspirations of the New Zealand Nurses Organisation and the Public Service Association too. I guess I’m keen to understand, in the process leading up to this bill being introduced under urgency, what consultation you had with those unions in terms of ensuring that what is being put forward represents the needs of those workers and the aspirations of the union movement as well. I mean, the way I see it is cooperation agreement partners don’t let their friends be out of line with what the working class is asking for. So I’m keen to understand in terms of the rationale for leaving this until last minute and then having an urgency process, and, if you wouldn’t mind explaining, why the rates that the union movement is calling for is not what you are supporting.

Again, I’m pretty sure I’ve answered most of the member’s questions already. But in terms of the rates and my engagement with the unions, it is true they wanted higher rates—in some cases, it’s significantly higher rates—and it was pretty clear that the rates they were seeking were the sort of rates that you would expect would be the product of a pay equity claim. The legislation prevents Government agencies—in fact, anybody—from engaging over a pay equity claim until after 30 June, so we could not engage on that basis.

The member asked why it’s taken five years. This group of workers has had legislative pay rates, including legislated pay rises, over a five-year period. It’s unlikely that any of the unions representing any of these workers could have grown their membership amongst this group of workers sufficiently quickly to negotiate a collective agreement that would have provided or afforded comparable protection. And I think everybody saw it as appropriate that while the legislation was in place and these rates were in place, that afforded a degree of protection. I know the unions have been working closely with this Government on fair pay agreements, and I think this group of workers would be a great candidate for a fair pay agreement once that legislation is passed. Given the concern being expressed by so many in the House tonight about low-paid workers, particularly these workers, I look forward to all members’ support for the fair pay agreement legislation when it comes back to the House.

But it hasn’t been possible to engage over a pay equity claim, and it hasn’t been possible to do other collective bargaining for this group of workers without leaving a substantial chunk of the 61,500 workers out. We’re trying to prevent that from happening. There’s no question in my mind, there would be some workers or at least be some new entrants to this workforce that, were this legislation not to be in place, would almost certainly be offered inferior rates of pay, and that would be unacceptable. So it’s taking all those factors and saying, “What do we do? What is the best interim step?” Once we get to the point of kind of pay equity freedom for these group of workers, we should throw off the shackles of the prohibition on pursuing a pay equity claim. At the end of the day, on 30 June and 1 July, we’re in a position to pursue a pay equity claim. What do we do in the meantime to afford appropriate protection for these workers? And this is the step that we’re taking.

We engaged over an appropriate adjustment or pay rate; we didn’t reach agreement. And, likewise, with the providers, they certainly made their views clear: they would have liked more. But we haven’t done that, and we’ve done what we think is an appropriate interim adjustment pending the most important thing, which is getting a pay equity claim settled.

Thank you very much, Mr Chair. I acknowledge the Minister’s comments before that we seem to be caught up on the numbers, but I feel like we’re caught up in a game of dodgeball here.

Nicola Grigg: Ducking and diving.

SIMON WATTS: Yeah, as you say—ducking and diving on just answering what is quite a simple question. I think the way in which you would articulate it, quite simply, Minister, is have you had assurance from the sector that the rate in which the cost in which you’re placing on that sector is going to be covered by the funding envelope that you’re providing, because that’s quite simply the question. So it’s either yes or no. Let’s not play the sort of left or right, back and forth, over the net or under the net, or whatever—just say yes or no. Is the quantum in terms of this increase within the funding envelope—yes or no? Then I think we can move on and move on to other aspects—which I will do, just in the interests of time—which is around clause 8 in regards to the rates.

I refer to the departmental disclosure statement. It refers there to the dates in which this conversation was had between the Minister and these parties, and the dates are 3 May to 26 May 2022. It doesn’t indicate that that conversation was initiated in advance of where we are today. I think that’s been the challenge to date in terms of when did we actually clear off. Why was there such a delay, or why did those conversations not occur earlier? It’s been five long years in order to initiate that conversation. The departmental disclosure statement states 3 May to 26 May—a simple question is why did it take so long to initiate those conversations.

The third question I’ve got, again in regards to clause 8, related to the rates is that it states here that the stakeholders sought a larger increase. We’re trying to attack this from two angles: one is we’re looking for assurance from the Minister that the offer on the table equals that of which the funding envelope that’s been provided. The simple reality there is we want to ensure and want to get confirmation, because we haven’t had a full select committee process. We haven’t had the benefit of being able to ask officials about this process. We’re ramming this through under urgency, and that assurance around the fiscal cost of this is critically important.

So my question around the point I’m making around the larger increases—and I acknowledge you might want to not get into the detail. But how far away are we in terms of where these representatives on behalf of this workforce—how far away are we on this, because, in effect, 18 months is a long time, and it says here that they sought a larger increase, so I’m wanting a little bit of clarity in regards to that point.

So those are the three questions on the table—nice and easy. It shouldn’t take long to cover those off rapidly, and then we can move on to the next tranche of questions which I’ve got in terms of a number of other clauses.

The member asked why it took so long to initiate discussions. I’ve been engaging with the unions on this issue since last year, so it’s a variety of discussions. Most of the discussions last year centred on a whole range of workplace issues, and it’s fair to say that there’s a range of issues with this workforce where improvement is called for in terms of the structure of work, work hours, the in-between travel issues and what have you. So a range of issues have been under discussion during all that time, and in that time the issues about this legislation of continuing protection but—most importantly—seeking pay equity have been very much at the forefront of that discussion.

In terms of when we can expect things to happen, as I’ve said, my engagements more recently with both unions and the employer representatives have been about making sure that all parties are supported, but particularly in relation to the technical work that goes with pay equity—because it is pretty full on—is there. So that support is there. We will support both sides, not just from the Ministry of Health but from the Public Service Commission. We’ll have technical experts available and we will provide funding for both sides so that they can progress their claims.

The bill sets a self-repeal date of the new rates of 18 months. It’s my expectation that we would conclude pay equity discussions before then, and, of course, there’s nothing that prevents—following discussion—the Government, with the parties, from increasing these pay rates on a subsequent occasion within the 18 months that is provided for in these terms.

I come from a union background. I come from a negotiation background and I operate on the principle that nothing is beyond negotiation, and I’m sure that will be the case with this group of workers.

I move, That the question be now put.

Thank you, Mr Chair. I rise because maybe I didn’t make it clear enough when I stood up last time, around that very simple question. I’ll say it again, because I think this is the seventh time that we’re asking it, and it’s simple: have we got assurance back from the sector that the offer in terms of the increase on the table is within the funding envelope that has been provided by Government in order to make that happen? I’ll just buy a little bit more time, just to let the officials provide that, because I think that’s important, and then we can crack on.

But while we’re doing that, let’s move on to that other clause—again related—in regards to clause 8 of the legislation, as well. So what I’m interested in particularly is that the Minister has just articulated in regards to the conversations that were actually occurring, I think you mentioned, last year—which obviously indicates that there was some level of dialogue that was initiated with the unions in regards to this earlier, which is obviously reassuring to hear that that hasn’t just been kicked off recently. But in regards to that dialogue, I guess the challenge is what were some of the key factors—again, related to clause 8 of the legislation: what were some of the key factors around why that agreement couldn’t be reached with these parties, taking into account that we’ve had five years to try to resolve this?

Sorry, I just wonder whether the member might repeat the last part of his question, because he faded off. I’m the one losing my voice, but I couldn’t hear him.

I’m not sure who faded off then, but I’ll take it that it was a bit of both of us, maybe. So my question was: what were some of the key reasons why the parties couldn’t reach agreement in regards to the dialogue that was had around trying to find a resolution to this matter? It notes, obviously, in the departmental disclosure that one of the factors was around the size of the increase, but were there any other factors that were at play, and what steps were taken in order to mitigate that so that we could have avoided where we are tonight?

Thank you, Mr Chairman. Look, with all due respect, members are repeating themselves, and I’m happy to repeat the answers, but—

Hon Michael Woodhouse: That’s because we’re not getting any answers.

Hon ANDREW LITTLE: And the members have got the answers, though sometimes you do get to choose whether you hear or not, and they’ve clearly made a choice.

I once again reiterate that the funding envelope that is provided for to meet the cost of this increase covers all costs, including the on-costs. Also, to the member’s second point, it’s not for me to explain why others don’t reach agreement, but agreement wasn’t reached, and so we are proceeding accordingly in order to provide an increase and to provide protection. Everybody is, however, agreed the most important thing is to get on and get pay equity done, which is why most of my discussions in the last few weeks have centred on how do we support the pay equity discussion process, because that’s what these workers most want and have been waiting the longest for.

I move, That the question be now put.

The question is that Jan Logie’s tabled amendment replacing clause 8 be agreed to.

Amendment not agreed to.

Clauses 1 to 8 agreed to.

Bill to be reported without amendment.

House resumed.

(remote) Point of order, Madam Speaker. Kia ora. Because we were online and not able to unmute ourselves, we were not able to vote yes for Jan Logie’s amendment or to vote no for the passing.

Thank you. Does the member wish to seek to have the vote corrected?

Yes, please.

Hon Michael Woodhouse: Point of order, Madam Speaker. Without wanting—

Before I take the member’s point of order, I will just take some advice.

Hon Michael Woodhouse: Oh, that will be the same advice.

ASSISTANT SPEAKER (Hon Jacqui Dean): I’m sure you’re going to give me something—I’m quite convinced you are. Where would we be without you?

Thank you for that, members. As the vote passed on the voices, there is no need to recast the vote. Was that consistent—oh, point of order.

Point of order, Madam Speaker. That is absolutely correct, and 50 percent in respect of the point I was going to make. What I was going to suggest to the House is that this is a technical issue that is a consequence of the virtual Parliament. If leave was sought for a vote to be had on those two questions, certainly the National Party would not oppose it. The difficulty the Green Party has now is that their opposition can’t be recorded, except in Hansard by this dialogue.

Let me just think about that.

Thank you for your indulgence, everyone. We’re going to complete the committee stage, and before I take the first call on the third reading, I will again invite any party—Dr Elizabeth Kerekere—to seek the vote being recast.

Madam Speaker, the committee has considered the Support Workers (Pay Equity Settlements) Amendment Bill and reports it without amendment. I move, That the report be adopted.

This bill is set down for third reading forthwith, but, before I take the Minister’s call, I understand that a member may wish to raise a point of order.

(remote) Thank you. Point of order, Madam Speaker. Kia ora. We would like to seek leave to do a vote again on Jan Logie’s tabled amendment.

Oh, hang on—no.

Dr ELIZABETH KEREKERE: Oh, I’ve done it wrong. Aroha mai.

ASSISTANT SPEAKER (Hon Jacqui Dean): Right. Order! You’re going to love this—you’ve got to love this. It’ll be infamous. So, members, I would invite some kind member to seek leave to go back into committee—

Hon Michael Woodhouse: Ah!

ASSISTANT SPEAKER (Hon Jacqui Dean): —I know—for the purpose of casting party votes on two questions.

(remote)Oh, I’m not sure of the exact right words—

ASSISTANT SPEAKER (Hon Jacqui Dean): Not yet—take a point of order.

Dr ELIZABETH KEREKERE: Point of order, Madam Speaker.

ASSISTANT SPEAKER (Hon Jacqui Dean): Seek leave to go back into committee.

Dr ELIZABETH KEREKERE: I seek leave of the House to go back into committee to recast the two votes.

Is there any objection? There appears to be none. House in committee.

In Committee