Minimum Wage Amendment Bill

The National Party in Opposition will be opposing the commencement date in the Minimum Wage Amendment Bill. We have tabled an amendment that will defer the commencement date until after the election of the next National-led Government in 2005. With a commencement date of 30 November 2005, the next National-led Government will have an opportunity to repeal this bill. The reasons we want to defer the commencement date are set out very clearly in the regulatory impact statement that the Government itself has tabled in this Chamber. People listening on their radios tonight should know—

The CHAIRPERSON (H V Ross Robertson): The member knows he cannot refer to radios.

That is a new ruling, is it not?

The CHAIRPERSON (H V Ross Robertson): Speaker’s ruling 39/1.

People who are listening tonight in the gallery will want to know that this bill proposes to remove the exemption whereby up to 26,000 young New Zealanders receive on-the-job training and, as such, get a payment that is lower than the minimum wage. The Government has advised Parliament that the proposed change will have an impact on the Government’s finances, which will come from increased benefit payments as a result of job losses over time. The Government has also advised Parliament that there will be a decline in the amount of training provided by employers and that that will have an effect on training, and has further advised that that will increase compliance costs for employers and business in general.

The National Party asks why we would want to deny young New Zealanders the opportunity to have on-the-job training, to increase the number of people on the dole, to reduce the amount of training in the economy, and to make business compliance costs higher than they already are. The National Party asks why we would do that. I think it is clear that this Government is doing it as part of its continual programme of payback to the trade union movement. There is no doubt that this legislation is union-driven, promoted by the hard left of the Labour Party. If one looks at the introductory debate, we see that the Ministers Margaret Wilson and Laila Harré crowed about this bill. They represent the politically correct spa-pool liberals who make up the Government, and they were the people who most promoted this bill.

This bill is anti-business, it is anti-growth, and it is anti-training. Why would we want to support legislation that, as the Government knows, will put young people on the dole? The Government has told us that. It is on page 3 of the explanatory note. Why would we want to support legislation that will lead to a decline in the amount of training in the economy? The Government has told us that. It is on page 4 of the explanatory note, and further on on that page is the advice that this legislation will add to the compliance cost for employers. The National Party says that those are compelling arguments made by the Government not to support this legislation.

The National Party stands very clearly on the side of young people who want to have an opportunity and the chance to get ahead. My colleague Judith Collins will be attempting to take a call to outline to the Committee what the Government will be doing. What it will be doing will be forcing a whole lot of people to stop being lower-paid trainees and to become volunteers. They will become volunteers in the workplace, and they will not get any payment, at all. They will be on the dole. They will be volunteers in the workplace, learning those skills, and they will not get paid. That is the point. They will miss the opportunity to get some compensation while they are training, because this legislation will drive significant numbers of young people into being volunteers in the workforce—where they will get no payment—and an increased number of people on to the unemployment benefit. What this country needs to lift its growth prospects is a National-led Government and a flexible labour market.

I rise on behalf of New Zealand First to support the commencement date as set out in the amendment. Briefly, I say with regard to some of the comment that I have heard this evening that I wonder where some people have been for the last decade—particularly those people involved in the agricultural industry. There seems to be a misconception that workers out there in the dairy-farming industry, in particular, are being exploited. In actual fact, the situation is by far the opposite of that. Anybody who is prepared to get out there and handle a cup or jump on a tractor is readily wanted and, I assure the Committee, is paid far above any minimum wage, in order to be able to fill the intense demands of the dairy industry at the present time. It is the same for the meat industry and the wool industry.

Again, I come back to the fact that a balance is required, which relates to the opportunity provided by the employer and the educational opportunities and further training that the young person—whether male or female—gets, and the end result is a fair and equitable opportunity for those involved. Although I would hesitate to look at perhaps just one industry, the land use industry, one could also look at the hospitality industry or the supermarkets—that whole area of food servicing—where there is a history in earlier years of the exploitation of young people. Today that has been remedied slightly, but in the same way, a training opportunity needs to go with a fair job and a consistent and reasonable salary or wage. On behalf of New Zealand First and my colleague the Hon Brian Donnelly, who is our party spokesperson on those matters, I support the amendment.

I rise to support Mr Ryall’s amendment. I think it is an excellent amendment, although I do have a quibble with it, which I will raise with Mr Ryall in a moment.

I also want to express my disappointment—but not surprise—that the New Zealand First Party continues to be economically illiterate. The fact of the matter is that by supporting the paying of minimum wages to trainees, that party will limit the number of people who can get training.

💬 Jim Peters: Rubbish!

The member says “Rubbish!”—

💬 Mark Peck: I agree.

—and so does Mr Peck, yet they are supporting a bill that states that. If they cared to read the explanatory note of the bill, which I ask Mr Peck whether he has read—

💬 Mark Peck: You bet!

He says that he has read it. Does he not agree with the explanatory notes of the bills of the Government that he belongs to?

💬 Mark Peck: I agree with everything in the bill.

There was an incoherent answer to that question, but let me draw to the member’s attention that on page 3 the explanatory note states: “The proposed change may have a small adverse impact on the Government’s fiscal position. The fiscal impact would come from increased benefit payments that may occur as a result of potential job losses over time.” That is there, in the Government’s own legislation. One could bet that Ministers hated every word of that; that is how far they could get it watered down. I guarantee that if we could see the first draft, it would be much harder—

💬 Shane Ardern: Much harder.

Those former ministers know what I am saying. But the Ministers could not get the officials to take that comment out, because the officials know that this bill will cost jobs. I say it is a great shame that New Zealand First and the Labour Party back bench are economically illiterate.

I have a comment and a quibble to make to Mr Ryall, who wants to move the commencement date from November 2003 to November 2005. My quibble is twofold. First, 2005 is far too soon. But Mr Ryall then says that November 2005 will be after the election of a National Government. The second part of my quibble, then, is why is he so pessimistic? This is a minority Labour Government. It cannot even handle the power crisis, and it has the economy going down the gurgler. I am coming to the commencement date; it is a question of whether that date could be safely made November 2004. This is a minority Government. It is supported by the Greens, but at some point they will take a stand over genetic modification, and it is also supported by the United Future party, but at some point the members of that party will look at the polls and say that they are going down the gurgler with that lot.

No MMP Government has lasted for the whole full term. New Zealand First will not save the Government. The member could take a risk and make the commencement date November 2004. I think the Government will last about another year. But when we have a second winter power crisis and people realise that the Government says we have market prices, but that the Government actually owns 70 percent of the generators—we do not have enough generators—and owns all of the grid, and that this is a Government crisis, we could see this Government fall.

I say while ACT will vote for the National Party’s amendment, it is a bit on the pessimistic side. The National Party should be a bit more optimistic. We should be getting ready for the possibility of an early election. I see signs of this Government falling. One of the reasons for that is this bill itself. The reason the Government will fall is that it is economically illiterate. This Government has no idea whether it has done well economically. It has benefited from things it had no control of, and now that the economy is going sour on it, the Government has no idea what to do about that. If it has, then let us hear one idea in terms of what it will do about the power crisis. We have not heard one idea. We heard the Government say on the Holmes show that we should wait for some weeks for it to give us an answer.

💬 John Key: They’re in the dark.

Yes, the Government is in the dark. The Government itself acknowledges that by passing this bill, it will deprive young people of training. November of this year is far too soon to introduce such a harsh measure, and November 2005 is still too soon. We will support the amendment.

This is an interesting commencement date. When we read the bill we see that it was to have come into effect on 30 November 2001. The points that have been made this evening have shown that the Government is anti-business. It is anti-investment, and it has no idea of what it is to run a business. In fact, 85 percent of all businesses in New Zealand are small businesses, employing less than five people.

When an employer takes somebody on, at the end of the day there has to be a reward. I raise a point of order, Mr Chairman. A member on the Government side of the Chamber is using a cellphone.

The CHAIRPERSON (H V Ross Robertson): The use of cellphones in the Chamber is not permitted. I have been assured that the cellphone is not being used in the Chamber. The word of all members here is accepted unreservedly; their word is their bond.

I raise a point of order, Mr Chairperson. The person whom you are referring to is not the person I was referring to. The person—

💬 Jill Pettis: Stop wasting time!

The member says that we are wasting time. It is a very important precedent that members do not use cellphones in the Chamber. I have brought that to the attention of the Chairman. If the member would like to stand and apologise, then I will accept that. It is not me who is wasting time; it is the member who has been using the cellphone who is wasting time. I have asked for a ruling, and have suggested that an easy way out is for the member who was on the cellphone—

💬 Hon Richard Prebble: How about naming the member? It will make things a lot easier for everyone.

It was Steve Chadwick, who is sitting in the front row. If she would like to stand and apologise for using the cellphone, we can then get on with this very important bill.

The CHAIRPERSON (H V Ross Robertson): If the member used a cellphone in the Chamber, that is unacceptable. The member will stand, withdraw, and apologise if that was the case.

💬 Steve Chadwick: I withdraw and apologise.

The point I was making was that if I am prepared to employ somebody—and it will cost me money to employ that person—then there has to be a return. I would expect that the return that I will get from that person’s contribution to my business is that he or she has to pay his or her way. That is just the basis of employing people. This Government expects that every time I want to employ people, they will think I will exploit them. I have never paid minimum wages to the staff whom I have employed over the years. I have always paid them more than the minimum, because they have been worth more than that.

At the moment people will take staff on and give them a go, but they expect a return on that investment—that is, if they are employing people for whatever the figure is per hour, those people will need to contribute. Employers are prepared to put in the time and the training. However, under this bill that initiative will be taken away. There are young people who are prepared to go and knock on doors, and to ask employers for a job. Employers have said they are prepared to give them a go, because they have shown some initiative. This bill states that people cannot do that, because if they do they will be exploited. But if employers want to have people working for them and to get the best return from them, they will look after their staff.

This bill takes that away. The tenure of this bill simply states to young people who are out there looking for a job that if they go when there is no protection for them through minimum wages, when employers have a training budget, and put effort in and to spend time with them—

💬 Jill Pettis: This member hasn’t mentioned the commencement date once.

I mentioned the commencement date right at the beginning of my speech. If the member did not interrupt so often, she would actually hear what I was saying. The member does not understand the basis of business. That is the trouble with this Government: it has no idea what makes the world go round. Government members have never been in business themselves, they have never invested a dollar, and they have no idea—

💬 Jill Pettis: That’s totally incorrect.

That member has never employed anyone. Government members have absolutely no idea of the costs—of what is involved in employing staff. [Interruption]

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the honourable member. I refer members on my right to Speakers’ ruling 51/5. If those members want to make a speech, they can take the call next time and do so.

I would appreciate them taking a call. I would like the Minister to take a call, as well. It seems to me that every time people want to go for a job they need protection, because otherwise the view of this Government and its members is that every time people go for a job, they will be exploited. That is what the bill states. The Government does not allow for the initiative of young people seeking to have a go.

That is why it is so very important that the commencement date, as the Hon Tony Ryall has mentioned, should be after the next election. That will allow those trainees who are out there now to appreciate and be able to show exactly what is involved in obtaining a job, and to show how the current system works. What is happening today is that employers are not prepared to take anybody on, because it will become too difficult. We have the Holidays Act, the 4 weeks’ holiday amendment bill, paid parental leave, and the Resource Management Act. People will say they are not prepared to take on a young person. They will ask why they should carry all the risk all the time. Employers will contract work out. There is huge demand out there now, and people are saying they will not give young people a chance by taking them on. Employers are saying they are not prepared to train young people, because once they have taken them on they will have to meet these compliance costs.

I move, That the question be now put.

The commencement date of 2001 in this bill has already passed. That is just another example of a date that is completely out of date and a bill that is completely out of date. As my colleague Mr Lindsay Tisch has said, not all employers are exploiters. In fact, one would hardly ever find an employer who is an exploiter these days; the situation is quite the opposite of that.

One of the interesting things with this bill is the date, and I would like to speak now to the amendment that the Hon Tony Ryall has put up. I disagree with him, because I think we will just give this legislation another few months after we win the next election on 30 November 2005. I disagree with a commencement date in November 2005. I have already checked this with my colleague the Hon Tony Ryall, and he is happy with my suggestion that we move the commencement date to 1 April 2006.

The reason for that is that we will have so much legislation to repeal. I do take Richard Prebble’s point about that. We have to accept, Richard, that we will have to do that.

The CHAIRPERSON (H V Ross Robertson): The member must not refer to a person by his or her Christian name.

We will have so much legislation to repeal that I think the commencement of this legislation will have to wait until 1 April 2006. Now why would we want to do that? For a start, as has been pointed out, we have the official record that states that the costs will be too high and there will be a decline in the amount of training provided by employers. We will have to tell employees who need training that they might not have a job.

It is very interesting, on looking at a bill like this, to see just how much consultation has taken place. Maybe more time is needed for consultation. The consultation has been with the Ministry of Economic Development, the Ministry of Education, the Ministry of Pacific Island Affairs, the Ministry of Women’s Affairs, the Ministry of Youth Affairs, Skill New Zealand, Te Puni Kōkiri, and Treasury. Well, I do not think any of those agencies are employers. Not one of those agencies has ever mortgaged its house, put its house on the line to go and set up a business—

💬 Shane Ardern: Gone broke!

It is true that not one of them has ever done that. I raise a point of order, Mr Chairman. My understanding is that a running commentary of interjections is disorderly.

The ASSISTANT SPEAKER (H V Ross Robertson): Yes, I refer members to Speaker’s ruling 51/5(3). I have already referred the Government member on my right to it. I now refer the member to Standing Order 85. That member has her first yellow card.

So we have a situation where there has been insufficient consultation. Not one of the agencies consulted with has ever been, or actually is, an employer. They are all Government agencies.

💬 Jill Pettis: And councils!

I raise a point of order, Mr Chairperson. The member on the Government side of the Chamber is continuing with the objections, obviously contrary to your advice. I think that is disorderly.

The CHAIRPERSON (H V Ross Robertson): If the member was doing that, the member will stand, withdraw and apologise.

💬 Mark Peck: I withdraw and apologise.

It was not that member, Mr Chairperson.

The CHAIRPERSON (H V Ross Robertson): Will the member stand, withdraw, and apologise.

💬 Mark Peck: I stand, withdraw and apologise.

💬 Jill Pettis: I stand, withdraw and apologise.

The CHAIRPERSON (H V Ross Robertson): Would Mr Peck please be seated. Jill Pettis—

💬 Jill Pettis: I did stand, withdraw, and apologise.

So there really has not been enough time for any consultation with employers. I would like to know whether anyone has actually asked for the views of any of the freezing works or of any of the lawyers, who, as Richard Prebble has very, very carefully advised, take on a lot of people to receive training in their offices. Who has actually asked anybody—anyone who actually employs people—for a bit of consultation? In fact, no one has even consulted with the youth whom we are talking about—the people actually receiving the training. That is one of the points. The date that we are talking about in the bill will not be possible because it has already passed, for a start. Secondly, I say there has not been enough consultation with anyone whose job is probably on the line.

One of the points I would like to raise—and I would like to hear from the Minister on this—is whether the Minister has considered the effect of this legislation on volunteers. One of the things that will happen is that a prospective employee will be told the employer does not want him or her as an employee because the employer cannot afford to pay the employee while he or she is training with the employer, but that he or she will be taken on as a volunteer. And that is the point: this bill does not protect volunteers. The people who are currently receiving some money while they are training with an employer will turn into volunteers—unpaid workers who will be on the dole or on some sort of training allowance. That is what will happen. The very people who have had jobs, even if they were not very well paid, but who have done that because they were being trained, will have to lose those jobs, become volunteers, and add to the dole list. In fact, any smart employer and any smart person wanting to be trained will get around this legislation.

I rise to speak on the commencement date of this bill, and I think it is probably time that somebody pointed out to the Committee that despite the fact that the Prime Minister, the Rt Hon Helen Clark, can have a view on major international events, I do not think she has the ability yet to put in place legislation—which we are debating in the Committee here today on 29 April—that has a commencement date of 30 November 2001. I see there is a Supplementary Order Paper, and I think that that is absolutely why the public of New Zealand need to know what it is that they have governing this country at the moment. The commencement date of this bill has well and truly passed, and we have Supplementary Order Paper 245 to amend that date to a time that, hopefully, the Government might be able to achieve. That Supplementary Order Paper states “the day after the date on which this Act receives the Royal assent”, which could be anywhere in the never-never—who knows?

My colleague has put a date on this legislation of 2005, and another member has amended that to 2006. I think that is sensible, because at least people will have some indication of when this bill might become law, even though most people will be opposing it. They will at least have some idea of when it might come into law.

But this bill demonstrates to the Committee today that we have a Government that introduces great socialist ideas, and goes out and puts up a kite to find out what the public polls are saying. During the knowledge wave conference in Auckland, Labour members sampled the business sector to see what it was saying. They found out that the business sector was not very happy with where the Government was going, so they buried this legislation somewhere on the Order Paper and forgot about it. Then, in the middle of the night when they did not think anybody would be taking any notice—and certainly nobody is listening on the crystal sets in Taranaki  King Country, or on the cowshed communication systems, at the moment—they try to rush this bill through with a commencement date of 2001, and with Supplementary Order Paper 245 to amend that to the never-never—until it receives the royal assent. This is legislation that, politically, the Minister in the chair knows will sink like a lead balloon.

We have here a Government that goes out to the business sector and pretends to be friendly, to know what people want, and to know what will generate growth in the economy. It talks the talk, but comes back to the Parliament here and returns to its true, natural, socialist roots, which we have all known it would eventually do. We have all known the Government would have to do that; it could not keep up the facade for very long. Eventually the Government would have to come home to its roots; that is what always happens. Here we have a bill with a commencement date of 30 November 2001, which is long gone, and with a Supplementary Order Paper to state that the bill will come into force when it receives the royal assent.

The National Opposition opposes this bill, and is recommending amendments. We are recommending amendments to the commencement date. The Hon Tony Ryall has put forward an amendment that will change that date from 30 November 2001—and I am sure the Minister will be happy with that, because even the honourable Minister will have trouble getting this legislation in place by 2001—to 30 November 2005.

The reason for that is very obvious to those who are taking an interest in this bill tonight and who are listening in to this debate on various mechanisms. It is because that date will be after the next election, and there will be a change of Government. Most of those people know that the new Government will repeal this legislation. There will be a flood of repeals, as has been mentioned before. But so be it; that is what happens. There will be a new Government, this silly legislation will be kicked into touch, and the new Government will be able to bring in sensible legislation that will allow the 26,000 young people whom we are speaking of here—that is quite a substantial figure—to go through what has been a traditional pathway to a successful career, that is, hands-on, workforce training.

I move, That the question be now put.

The amendments in the names of the Hon Tony Ryall, and of Judith Collins and Shane Ardern to clause 2 are out of order, as they are inconsistent with the previous decision just taken.

The question was put that the following amendment in the name of the Hon Tony Ryall to clause 2 be agreed to:

to add the following subclause:

(2) Notwithstanding any order made under subsection (1), no minimum rates of wages will apply to classes of workers who are employed under contracts of service under which they are required to undergo training, instruction, or examination for the purpose of becoming qualified for the occupation to which their contract of service relates.