Holidays Bill

I rise to speak on behalf of the National Party, which is opposed to the schedules and to the whole bill, and there is a very good reason for that. Why is it that the socialists cannot understand that they keep dumping on business the way they do and expect business to prosper? Why is it? That is a simple question. Why is it that they just cannot answer that question? Because they do not know the answer themselves. That is the reason—they do not know what makes business work.

When one looks at schedule 1 of the bill and sees that the Employment Relations Act 2000 will be amended in respect of the Holidays Act 1981 and the Holidays Amendment Act 1991—so much of the schedules of that Act as relate to the Holidays Act and the Holidays Amendment Act will be repealed—one begins to understand the answer to that question. That is where the true answer will be found. The true answer is that those members have no idea at all what they are doing. They have no idea that this country, unlike any other country in the world, is made up of a majority of small businesses. There are a few large ones, but the majority are small businesses. They are the mums, dads, and “Joe hard workers” out there who will take a bit of a risk and take on a lower socio-economic or unskilled person and give them a break, and the Labour Party, the very party they believe will protect them, is going to dump on them.

What we have in the schedules of the Holidays Bill is a wage freeze in disguise. What do members think will happen over the next few years with wages? Will they go up? Perhaps the Minister in the chair will tell me. Will they go up? Will this bill encourage wage increases for low-paid workers—yes or no? Well, there is silence from the other side of the Chamber, and I am sure they will not take a call on that. Now, Treasury has done some work on this, and it decided that there is the potential for $800 million more costs to business—or to somebody. Where will those costs fall? There is $800 million worth of costs in this legislation, and it is covered in the schedules. When we look through the schedules, we can see how that will happen. How is it that the Labour Government cannot understand that if $800 million worth of cost is added, somebody has to pay? The Labour Government thinks that businesses have bottomless pockets. It thinks that businesses will just pay it and that will be the end of that. What this Government does not understand is that the majority of that money will probably come from that mum, dad, or “Joe hard worker” out there who is struggling to make ends meet. That is the bit that really has me wondering what it is that motivates the people on the other side of the Chamber. I just cannot understand it. It is beyond me.

Let us talk about one of the larger businesses in this country, the dairy industry—which I began to talk about just before the dinner break. I want to talk about the development of the largest dairy product manufacturing business in the world, which is located in Hawera, in the electorate of the member for Whanganui. It is the largest single dairy manufacturing business and one of the most efficient in the world. That powder plant, which produces 20 tonnes an hour at peak, was built on time, to cost, and if it had not been the industry would not have proceeded. Why was that able to happen? Because there were flexible employment laws at the time. That manufacturer, the Stork plant, is a Dutch company, and when the Dutch Prime Minister opened the plant, with the Prime Minister of New Zealand, he said that was the case—that that was the reason the plant was able to be imported into New Zealand, manufactured, and put in place on time and to price. It now produces 20 percent of this country’s export earnings. I hear the member opposite rabbiting on. She can take a call and explain why she disagrees with me. The reality is that that was how it was achieved, and that is what the Dutch Prime Minister said. When I look at the schedules and at the bill in total I have to ask how this legislation will enhance that type of development. How will this bill help those who work in that plant and are on shift work, have independently negotiated contracts, enjoy good standards, and have more than the average leave entitlements already because they have been negotiated in their contracts? How will this bill help them—and will it help them? Will it help them or hinder them?

💬 Hon Lianne Dalziel: How many weeks’ holiday is that member going to have?

The Minister is carping on about how many holidays I will have. When I go home from Parliament I go home to run the farm, to help to pay the taxes that the Government squanders in this type of silly legislation. The interesting point is that this bill is designed around the notion that there is to be a work-life balance. What does that mean?

I want to reflect on the schedules, but before I do so I want to say that we have heard quite a lot of discussion about the impact that holidays will have, particularly the 4 weeks’ leave that were sneaked into the bill through quite an underhand and appalling manner. The employers of New Zealand were told one thing, then, lo and behold, the Holidays Bill delivers something else, and the result of that action is clear in schedules 1 and 2.

One of the great tragedies of this legislation is that lower-paid workers and workers who are looking for their first opportunity in the workforce—young people who are eager and keen—do not want 4 weeks’ holiday. The nanny State is telling them they want 4 weeks’ leave, but they want the opportunity and they want the money. Equally, if we ask people whether they want 4 weeks’ holiday or whether they want more money so they can provide better quality for their families, afford to put more food on the table, send little Jimmy to the holiday camp that he wants to go to, or buy him a new wave thing he can take down to the beach, or to enjoy some of the finer things in life, I suggest they would not argue that they want 4 weeks.

This provision is simply a cost that the country cannot afford. The Government has tried to fob off that argument by saying the cost is $350 million. The Government thinks that if it says that figure quickly it will not add up to much. However, we know, through the diligent work of the National Party, that the cost is $800 million, and in fact it could be even more than that. What we will actually see will not be a whole lot of people getting 4 weeks’ holiday—although some people will get 4 weeks—but two classes of citizen emerging, and I predict that one of them will be those who own businesses. Some of the people who currently own businesses will simply give up the ghost. They are sick of hearing from John Tamihere, the Minister for Small Business, telling them that Labour will do things for small businesses in New Zealand. He may be trying to cut the odd thing here, or do the odd thing there, but then they get delivered this. They get delivered the killer blow—4 weeks’ holiday. Many small businesses came and saw us and said they simply could not afford to deal with this kind of legislation. They said they could not afford to pay time and a half, and a day in lieu, and all the things that are contained in the schedules. They said they simply would not be able to operate. What is that going to do for those people? Secondly, let us think about it from this perspective. Many small businesses employ fewer than five people. When they have to give this additional week’s holiday, what are they going to do? I will tell members what will happen. Employers will, in fact, have to work to cover that time. They cannot employ somebody else, and if they have a couple of employees—

💬 Jill Pettis: What do they do now?

Now they can share the load. But when employees take 4 weeks’ holiday the employers will be taking no holiday, so where is the work-life balance for the entrepreneurs? So what does this Government tell us? It parades up and down the country telling people that it is into entrepreneurship and it wants to foster the entrepreneurial spirit and the “can-do” Kiwi attitude. Then, as soon as some hard-working New Zealanders go out there and borrow a bit of money to put together a business, they get socked in the teeth with this socialistic, nanny State garbage that should either be used as a doorstop or as something to light the barbecue with at Christmas time. It should not be used for what it is going to be used, and that is to deliver a poverty trap and unemployment to poor, hard-working New Zealanders. Their Christmas present, the delivery à la the Labour Party, will be unemployment. That is what will happen. They are not going to get a pay rise delivered by schedule 2, they are not going to get 4 weeks’ holiday—they are going to get 52 weeks’ holiday. That is what will happen as a result of this, so no one should be conned into believing that this is, in fact, some great, wonderful thing that has been brought off. So often in this Chamber we have heard Australia held up as a place that can afford, and has, 4 weeks’ holiday. There are two reasons for that. Firstly, it is a richer nation than we are and its Government is smaller than ours is. Secondly, I would argue very strongly that people who are looking at Australia are looking in the wrong direction. They should go and have a look at the United States of America, which has a minimum of 2 weeks’ holiday a year, and the economic prosperity in the US is so much greater than New Zealand’s.

How bizarre it is to be speaking on a bill that has an enactment date of 1 April 2007. It is like going back to the future. The enactment date of this bill, when these schedules get modified and these Acts of Parliament have to be changed, is 3 years and 4 months away. Of course, the most important thing about the 3 years and 4 months is that we have a general election in the middle of that. So this will be a major plank of Labour’s election campaign—“Vote for us so you get 4 weeks’ holiday a year.” I would have thought that any responsible Government passed legislation to help this country to do better, and all the advice that was given to the select committee said that this particular bill is anti-business, anti-growth, and anti-employment. Under this bill there will be a lot of New Zealanders who will not get jobs in the future. Already we have read from some of the submitters—these are small businesses, the backbone of any economy, the engine room of this country—who overwhelmingly said: “We will not be able to employ staff, we will have to do more ourselves, and if we do use staff we will have to use more casual staff.” That is the worst type of law to pass in this country, where the workforce will become more and more casualised, because the employers cannot take the risk of hiring permanent, full-time workers. What will that do to the long-term stability of families? It is actually anti-family legislation, because if the dad or the mum in the family does not have a permanent, stable, full-time job, then all the choices that family makes become more risky.

The submitters I would like to quote from say, in particular, that they will employ fewer staff, that they will use more casual staff, and that the bill has been written by people with very limited vision. In particular, I quote from a small-business man who says: “I can’t see anything for employers, and definitely no incentive to remain in a business where you are trying to break even but getting hit by more costs.” We have already heard in this debate that the average compliance costs that this Government has put on to a medium-sized small business have been something like $43,000 extra per year. A major proportion of those costs will be the added costs of this Holidays Bill. This bill is taking choices away from employers and employees. Again we have heard in this debate that many employees say they would like to have more money and that they would like to work as many hours as the employer can give them. They say that they do not need holidays because right now more money is what is driving their goals and their choices. Under this bill employers will not be able to negotiate that sort of deal with their employees.

Before I came into Parliament I worked in a company that employed 1,000 staff. Over the Christmas period many of those staff wanted the money. They wanted as much of the extra time as they could get. They did not need the holidays, whereas we had other staff with young families who wanted the holidays. It was a great position for both the employees and the employer to be in to be able to try to satisfy all of their needs. This bill takes away those choices. The Labour Government should be ashamed of doing that, because the workplace demands more flexibility today than ever before. The demands on business are tougher now than they ever have been before, and this Labour Government is putting employees and employers into straitjackets. I think that is absolutely disgraceful because ultimately it will lead to lower productivity, and that will mean a lower standard of living for New Zealanders. This bill is being driven by the unions. The Labour Party has fallen into bed with the unions, and it is now putting through a bill that will not take effect until 2007.

As National’s industrial relations spokesperson I have just come from a meeting in the eastern suburbs that I am sure the Committee would be keen to hear about. Employers at the meeting were thankful that the Government has given them until 2007 before the 4 weeks’ leave comes in. They have calculated that the total cost of this bill is about a 3 percent increase in their payroll costs, and they have three wage rounds in which to claw that 3 percent back. In those three wage rounds, instead of paying what they would have paid, it will be 0.5 percent or 0.75 percent lower as they claw back 3 percent, so that when 2007 arrives and Labour is celebrating the introduction of 4 weeks’ leave, the total employment costs to business will be the same as a percentage of turnover as they are at the moment.

So who is paying for the extra week’s leave? Labour members do not want to answer that. It is certainly not businesses that are paying. Does any Labour member believe that it will be businesses that will pay for this, or do they believe that it will actually be employees who will pay for it? Employees will have to trade off current wage increases for future promises of 4 weeks’ leave. That is the reality of what is happening out there in the marketplace, and Labour members know that. Labour members think they know best, and they have cunningly worked out that businesses can adjust over a 3 or 4-year period of time. One person tonight said to me: “My local member of Parliament, Annette King, has said ‘Don’t worry, you have time to adjust.’ ” What does that mean? That means employers have time to reduce their pay rounds to their cleaners and their low-income workers, and have time to reduce the conditions to cover the extra costs of the 4 weeks’ leave.

So that is what Annette King says to people when they raise the issue with her in her electorate. She says: “Don’t worry. We’ve given you time to adjust.” Then they wander around and talk to the low-income wage earners in the businesses and say: “Ah, but you’re getting an extra week’s leave.”, while knowing full well that that same person is paying for it over the next few years—knowing exactly that. Members of this Labour Government take people for granted and think that the good old traditional Labour voter is never going see through them. Just as this Government has taken Māori voters for granted for years, now it is taking low-income workers for granted, because basically Labour Cabinet Ministers believe that nobody is as clever as they are, so nobody can figure it out like them, and they can keep them all in the dark and say one thing to the employers and a different thing to the workers.

That is the reality. Otherwise, why would Mrs King not have said: “No, we really think your wage costs in your business should be higher.”? Does any Labour member think that the wage costs in New Zealand business should go up? Oh, silence! None of them thinks wage costs should go up. So how are businesses going to pay for this? That is why they have been given the long adjustment period.

This bill is a cruel hoax. Workers are not being given a choice. Labour has decided that workers should trade off future wage increases for a week’s leave. It is as simple as that. That is a choice that is not being made by the workers—Labour has never trusted them—but by the Cabinet Ministers.

I move, That the question be now put.

The amendment in the name of the Hon Matt Robson set out on Supplementary Order Paper 174 is out of order.