Holidays Bill

As previously stated in the first reading, second reading, Committee stage, and now the third reading of this bill, National is opposed to the bill. We will be voting against it at the conclusion of this debate, as we have throughout the course of this bill’s passage. Members on this side of the House found it interesting that in November 2003 the law firm Simpson Grierson produced an employment law summary of the Holidays Bill. Not only is the content of that document interesting but it has a subtitle “The Devil is in the Detail”.

That is, I guess, a fair summary of some of the major problems that lie within the Holidays Bill.

Members of the Government would say that people who oppose this bill oppose the rights of workers, particularly the rights of workers to enjoy 4 weeks’ annual leave. That is simply not correct. What we were able to find during the course of this debate progressing, was that the Official Information Act was able to produce documents from Treasury and the Department of Labour that made some startling revelations about the impact of this bill, not only on business but, more spectacularly, on workers themselves.

It is worth looking at some of the quotes from those documents. I will take the House through them, as I have a bit of time on my hands. This is an interesting one: “While the initial cost of the extra week of leave falls on employers, over a period of a few years we expect that employers will offset these costs by passing them on to employees through lower wage increases.” That has to be the thing that the Government worries most about, actually, and it is something that we on this side of the House do worry about.

The cost of 4 weeks’ annual leave will, in the end, fall on the workers. There is nothing more certain than that. It has been estimated that the total cost of this package to New Zealand employers and workers will be about $700 million per year. Interestingly, it has been estimated that $350 million of that cost—half the cost—will be borne by workers in the form of lower wage increases. The Government deliberately avoided advice on that issue. Treasury was asked, we are told, to provide advice only on the Friday before Cabinet met to decide on the issue of 4 weeks’ annual leave. In other words, it was not until the eleventh hour that Treasury was asked to produce for the Government a series of costings.

We know that this is not a policy that the Government has its heart in, and there are two reasons for that. The first is this: Steve Maharey told a Business New Zealand pre-election conference that Labour would not introduce 4 weeks’ leave. He was backed by Michael Cullen, who confirmed that 4 weeks’ leave would not be part of Labour’s policy. Mr Maharey then stated, later in the year when Matt Robson’s bill was introduced, that: “It’s because we don’t think employers at this time are in a position to take on 4 weeks’ leave in addition to other changes in their environment.” Now we find that the Government is happy and principled in its decision to introduce this legislation.

As I said prior to the interruption of this debate on Thursday evening, if the Government’s intentions were pure, if they were directed towards workers in a pure sense, why wait until 2007? If this is such a part of Labour’s impressive worker-friendly agenda, why are we waiting until 2007? More to the point, if it is so good for business, if workplaces are going to become so much more productive because workers will be well rested and putting their proverbial backs into the job, if the measure is so good, why are we waiting until 2007? What is so magical about—

💬 Hon Matt Robson: That’s a good question.

Matt Robson says that that is a good question—I thank him for that. The question is this: if members opposite are genuine about it, if members opposite do not think it will affect business, then why do they not put it in place now? That is the challenge the National Party puts to the Government. The Government should have the courage of its convictions, then at least we would respect the fact that the Government is standing by a principle.

But in this case, of course, we have seen that not only will the costs be borne half by workers, and not only will $700 million be pulled out of the economy—which will affect, in the end, workers’ wages more than business itself—but that this Government does not have the guts to stand up and put this policy into place immediately. That says more about the Government’s motivation and its politics than it does about its principles.

I have to say that it appears that the Official Information Act request from Treasury and the Department of Labour said that the immediate cost of labour will increase by 2 percent as soon as this bill is brought in, and that there will be distributional impacts through salary responses—and that is Treasury talk for “You won’t get paid as much in the long term.”

💬 Hon Brian Donnelly: Those on 4 weeks will want to go to 5.

Well, that is just an inevitable roll-out, and that is where most of the cost will come from, actually. So I say that Government members should have the courage of their convictions. Members opposite need to accept the fact that this bill will hurt not only business but—more important from the perspective of those members opposite—workers. Businesses will be unable to keep pace with increased labour costs, and I have made it clear from the start of this speech that National will stand on principle on this bill. We will not support a bill that is harmful to both employers, and people struggling out there to make a dollar in business, and we will not support a bill that, in the long run, will be bad for workers. National will be voting against this bill.

First of all, I congratulate Margaret Wilson on steering through an important bill that covers so many aspects of holidays for employees and employers in this country. On the question of the 4 weeks’ leave, I am very pleased that four parties in Parliament are supporting 4 weeks’ minimum annual leave as a recognition of the productivity and the contribution of so many low-paid workers in New Zealand, including many in this building who service and work for us as members of Parliament.

Mr Simon Power for the National Party has made a plea for the case for bringing that measure in earlier. I would have liked to see him convince his colleagues to vote for the amendment that would change the date to 2005. That support was not forthcoming. Therefore, we should put aside the earnestness of what he is saying. He has also spoken of the fact that Mr Steve Maharey and other Cabinet Ministers were, perhaps, a little slow to the reform in the form it is in now. But Steve Maharey is a fast learner, which is why he, and not Mr Simon Power, is the Minister of higher education.

I also want to say that this debate is a chance to pay tribute to the New Zealand Council of Trade Unions, and particularly engineers, printing, and manufacturing unions who led this campaign on behalf of their members—and I was pleased to work with them—and for getting out this postcard. There are a number left. I will sign them for members as a historic memento of the campaign to bring in 4 weeks’ leave. As well as that, there are a limited number of posters here: “4 weeks’ leave”—

💬 Simon Power: Who paid for that?

—which will be available, too, for members, and they were paid for by the trade unions and by party funds that the Progressives put in, as well.

This is a reform that is well overdue. It brings us into line with our competitors, particularly Australia, and it is a recognition of the productivity of so many New Zealanders.

Lastly, I will say that in preparing for this debate I realised the importance of the work-life balance. I had a prize giving to attend for my younger son. It was important to me, and I was able to take half an hour to go to that, and delay coming to Wellington. It made me realise how many parents who want to attend those functions have to take time out of their precious annual holidays if they do not have flexitime to make it up, as we members of Parliament do.

Lastly, in preparation for this, I took out one of the press statements that was put out on this matter. On 7 November 2002 I said this: “Parliament will soon vote on whether every worker should have at least 4 weeks’ holiday a year. I am confident that Parliament will recognise the overwhelming support from working people and vote for the first reading. My bill will then go to a select committee for public submissions.” One year on, I am pleased to say that we are now having the third reading and are about to pass this historic step. It is tribute to the four parties in this Parliament who have put themselves behind the ordinary working people of New Zealand who make such a contribution to our nations.

One would think, by listening to the last two contributions, that this bill was only about 4 weeks’ holiday. It is, of course, about a good deal more than that.

Let me commence by talking about New Zealand First’s concerns about 4 weeks’ holiday. Basically, the current situation is that only low-paid people, young people, or people casually employed get less than 4 weeks’ holiday now. They are confined to 3 weeks’ leave. We do not believe that the country would really be in dire straits if we extended leave provisions to casual workers, the low-paid, or young people. We believe there is a fair case for increasing their annual holiday entitlement to 4 weeks. Most people who are in a position of responsibility get 5 or 6 weeks. Some have the add-on provision that their leave is 1 or 2 weeks above the standard but, in general terms, they negotiate their own holidays to whatever level at which the market can meet the demand. Largely, those people who are on 3 weeks’ holiday now have little or no industrial clout. Their unions are non-existent in many cases, or pretty weak, and nobody will listen to them. It is a competitive environment, and if they do not like their leave entitlements they are told to “take it or leave it”.

Another point is that this 4th week will be phased in by the year 2007.

💬 Simon Power: Phased in? It’s postponed.

Phased in or postponed—whatever words the member wants. It will not come into being until the year 2007, which gives the businesses of this country quite a lead-in time to get used to what is coming.

New Zealand First would have supported Matt Robson’s bringing in the 4-week provision in 2005 if there had been some financial compensation—for want of a better term—for employers and businesses in this country. If we could have given 4 weeks’ leave to low-paid, young, or casual working people within a couple of years, we would have welcomed that, but we recognised that there should have been some financial compensation for business—small business, in particular—by way of tax relief. We would have supported that, but it was an unbalanced approach. Matt Robson wanted to bring in 4 weeks’ leave without any consideration of business concerns, so with some reluctance we could not support him.

The main part of this bill revolves around other factors: for example, it clarifies holiday entitlements. Most people in this House must welcome that. Certainly, employers must welcome some clarification of holiday entitlements—when there is a holiday, when there is not, etc. It does provide for some employees to be paid at the rate of time and a half for working on a public holiday. That will not be the end of the world for New Zealand. [Interruption] It will present some difficulties for some employers; that is true, but it will not be the end of the world.

💬 Hon Brian Donnelly: Working on a Sunday will.

My colleague thinks that working on a Sunday will be.

This bill segregates sick leave and bereavement leave, and that caused us some concern. There is a degree of “open chequebook-ness” about the bereavement leave provision in particular. We believe that in the fullness of time those measures will have to be rethought and re-looked at.

We respect business people in this country. We know that some of them will have a tough time. We know that some businesses will find this legislation hard and tough, and will, of necessity, have to restrict their activities. Others will restrict the number of people they employ and the duties they assign to them. We know all that. Further still, there will be employers who will operate as normal but be compelled to pass on the costs by way of increased prices—perhaps on a public holiday in terms of a restaurant, or whenever and however. We know that that will be difficult and will lead to increased costs and prices in a range of activities. We know that other employers will reasonably easily be able to absorb the extra costs of this bill, but, because of the competitive environment they are in, will have to look twice and modify their approach.

The most worrying concern about this legislation is the fact that it will give an incentive for some employers to employ people casually, when otherwise they might have employed them permanently. That is a concern for New Zealand First. Some employers will ask themselves why they want the trouble—and go to all the bother, red tape, and associated rigmarole—that goes with employing somebody permanently, when they can get the same person with the same skill on a casual contract, with little or no commitment from the employer for long-term employment. That is a worry to New Zealand First, and it is only right that working people should be aware of those adverse effects.

We have another major concern about the public sector—the public sector that will supply social services, for want of a better term, to disadvantaged New Zealanders. I am talking about areas like the health system. Will the Government compensate employers in the health system for extra leave costs? I have not heard that so far, but the Government should do so. It should be listening to the concerns of the health people and be compensating them for extra holiday costs. I ask about rest homes. Will the Government compensate rest homes for the additional costs of employing people on a public holiday when they are entitled to time and a half? I have not heard it thus far, but I hope that the Government has been listening, will do the decent thing, and respond accordingly. [Interruption] I do not mind my members along here laughing and joking at Christmas time, but I wish they would dull it down a little bit.

IHC New Zealand does a tremendous job in this country. This bill will cost them millions. Is the Government going to compensate IHC New Zealand for working 7 days a week, 24 hours a day, doing the marvellous things it does? I hope so; it certainly should do so. I hope the Government has been listening.

There are other areas I am sure the Government must be taking into account where costs need to be passed on. I am talking of particular areas of social concern. I hope the Government has been listening. Nevertheless, having said all that, I say we believe that the time has come for this sort of legislation. It is time we had clear, well-defined, holidays legislation so people know their rights and their entitlements. It is time the low paid had 4 weeks’ holiday a year so that people get a fair go. That is an issue we should be addressing as a Parliament—not, in my view, withholding reasonable conditions from low-paid people—so that the country can go on in whatever way it goes on. Low-paid and casual working people are entitled to a fair go.

Much has been made of the effect this legislation will have on economic well-being, and we have been compared with Australia. From my research, I find that the average income for weekly earnings in Australia is 7.5 percent higher than that of New Zealand—or close to that. The tax take the average person pays is nearly 17 percent more—more income, more tax. The estimated average net wage in Australia is about 3 percent more. We can compete with Australia without prejudicing the entitlements of low-paid or average-income New Zealanders.

We believe this bill will need to be tidied up in the not too distant future, but we support it and wish everybody well.

The Green Party welcomes the passing of the Holidays Bill into law a week before Christmas 2003. Although we are disappointed that 4 weeks’ leave for all workers will not actually happen until April 2007, we know that at least it will happen—finally bringing New Zealand into line with the modern world, and in particular with our closest neighbour, Australia.

Four weeks’ holiday a year is a base minimum to ensure that workers have time with their families, and time to rest and recuperate from the world of work. Many workers these days work more than 40 hours per week. Many work 6 or 7-day weeks, and shift work is common. Those patterns of work inevitably entail a heavy impact on the health and well-being of staff, and give less time to spend with friends and family. In addition, an extra week’s leave per year will not only benefit employees but also employers, who will profit from improved job performance, greater productivity, higher job satisfaction, and better levels of physical and mental health among their staff.

The eventual introduction of 4 weeks’ holiday for all will also bring to an end the ridiculous situation whereby those at the lower end of the labour market are less likely to be entitled to any more than the statutory minimum in the way of leave. There is a strange notion abroad that if a person is in a highly paid professional job, that person is subject to far more stress and deserves far more leave than someone who might be doing something like cleaning, packing, retailing, or driving for a living. In fact, people who carry out the less well-paid but just as vital tasks needed by our society and economy, deserve and need just as much leave as anyone else—if not more—given the stress they face in working for much lower pay and often in doing a job that does not provide the kind of personal satisfaction expected as of right in the higher echelons of the labour market.

As I have pointed out elsewhere on numerous occasions, the Green Party shares with Matt Robson, and with workers and unions, a substantial measure of regret that 4 weeks’ leave for all is not being established for the next year or the year after. However, we congratulate the Government on at least being willing to compromise by legislating for 4 weeks’ leave in the next term of Parliament. I doubt that National, ACT, or United Future will be willing to go into the next election campaign promising voters they will repeal the 4 weeks’ leave provisions in this bill. If they do, let it be on their own heads—much as I dislike the way in which this element of the legislation can be taken, purely and simply, as an election promise.

Moving on to the rest of the bill, I say that on the whole the Green Party has been, and remains, right behind this bid to clarify and strengthen the laws relating to leave and holiday eligibility. We support the provision of a guaranteed 11 public holidays per year, the clear separation and establishment of minimum bereavement and sick leave entitlements, and the provision of guidelines for calculating payments for all types of leave.

Our major disappointment with the bill—apart from the unnecessary delay in the implementation of 4 weeks’ leave for all—was the Government’s decision during the consideration stages to lower the period, from five successive calendar days to three, after which an employer can require proof of sickness or injury. This was a retrograde step, especially given the cost of going to a doctor these days. I believe employers can and should manage problems around people taking sick leave without good reason, through means other than the blunt instrument of a medical certificate—which can cost up to $50 a pop even if a person does not require any actual treatment.

Also in relation to sick leave, the Green Party would eventually like to see a separate and distinct provision for domestic leave, so that workers who need to take time off to care for sick or injured dependents can do so without cutting into their own sick leave entitlements. With a vast number of parents of both genders now in the workforce, and with a culture that says even solo parents should go out to work as soon as they possibly can, we need as a society to reassess how we treat workers who also have a primary obligation to look after young children, and the sick or frail elderly, who may be in their care. I hope that the next Holidays Act conceived by the New Zealand Parliament will be one that truly recognises the dual role that many workers play as both parent and employee, and that will extend leave provisions so that domestic leave becomes separate from sick leave and carries with it an entitlement in its own right.

Meanwhile, at least we have taken several big steps forward with the bill we are passing today. I acknowledge and thank everyone who has played a part in the process of bringing our holiday law into the 21st century. This bill is a Christmas present for New Zealand workers, even if the full benefit of the gift is subject to a rather lengthy lay-by arrangement.

It is my pleasure to rise on behalf of United Future, which will not be supporting this bill—much as we would like to. As we have said throughout our speeches on this bill, there are many aspects of it that are good and that we like, but we made the proviso at the beginning that we would not support it if it sneaked in things like time and a half and an extra week’s leave—not that we object to 4 weeks’ leave, but we believe there should be other provisions and other things to go with it.

Let me pick up on a point that Peter Brown made. He said that New Zealand First is supporting this bill, but that its members recognise that some things will have to come back to Parliament to be dealt with. I ask Peter Brown how good that party expects legislation to be. Is 80 percent OK? Is 85 percent? Is 90 percent? Or should it be 99.9 percent correct? If this legislation was—[Interruption] I am not controlling the sound of the microphone. They can turn it down. I say to Harry: Do not worry, it will be OK.

The ASSISTANT SPEAKER (H V Ross Robertson): The member made two faux pas. One is that he asked a direct question of Mr Peter Brown. Under Speaker’s ruling 39/6 he cannot do that. It leads to disorder. The other one was that under Speaker’s ruling 6/1 (Supplement) a member cannot refer to a member by his or her first name.

I apologise. I was addressing a comment made by Mr Peter Brown, in which he pointed out that the legislation was not quite correct and would have to come back to be modified. Let us say that the legislation is 99.9 percent correct: would that be good enough? If we accept that 99.9 percent is good enough, then members should consider this, which I found in my cereal packet—it always pays to read one’s cereal packet when having breakfast, because one may learn something. In the United States alone, 22,000 cheques per hour would be deducted from the wrong bank account, 12 babies per day would be given to the wrong parents, 286,500 defective tires would be sold in 1 year, and 20,000 incorrect drug prescriptions would be given in 1 year. Let us not even think about aeroplane flights! So I do not believe that close enough is good enough.

The law is supposed to be fair. I like the phrase in clause 66, “Employer and employee obligations under Act”, that states: “When dealing with each other …”. United Future is a centrist party. We believe in taking a central position. We believe that we can talk to both sides—to the left and to the right. We are supportive of that. The clause states: “When dealing with each other under this Act, an employer and employee must deal with each other in good faith.” That is great, I agree with that, but we should look at the reality of the situation. Sue Bradford said this bill is a great Christmas present for the New Zealand worker. It may well be so, but I have been taught that one does unto others as if one were the other. Let us think about that. If this legislation were fair, it would be fair to both sides. What concerns me greatly about this legislation is that it will be good for employers, but only for those outfits that I call parasites on the business community. They will take up an issue of an employee and will say to the employer: “ We will deal with it, we will take it through the courts, we will help you, and there will be no charge to you. We will just take a percentage when we get your payout.” Well, the poor employer will have to pay all the way, to fight, to have what this legislation states—good-faith bargaining. In reality, I do not believe that that happens.

Peter Brown asked whether it is fair that, just because someone goes out to a restaurant on a Sunday, that person should have to pay more for a steak. The answer to the question is that that person is not paying more for the steak; he or she is paying more for the cost of the labour to produce the steak. If members look at both side of the equation, they should ask themselves whether it is fair that a person who chooses to open extra hours does not receive his or her normal entitlement to profit for his or her work for the day. There are only two choices: one can either pass on the extra cost of the wages through the charge for the steak, or take less profit. We oppose this bill because of the considerable cost that the new entitlements will impose on employers.

During the Committee stage, I mentioned that the Government was comfortable basking in the glory of The Lord of the Rings films, but that it was not prepared to listen to the five companies involved in the films, all of which have said that the bill will make it harder to make movies in New Zealand. I touched on Federated Farmers’ warning about increases in cost. I touched on the Hospitality Association’s calculation that the bill will add $63 million to the operating costs within its industry. Does this Government care about the work-life balance of wage-workers only, and not bosses?

How many here stand up for what I believe is one of the most neglected sectors in our nation—small-business owners, the small-business men who work long and hard and have families to support? I often used to say to people whom I was negotiating with that I had four hungry kids at home, and I tell members that many small-business owners have kids and work long and hard. This legislation is not a good Christmas present for those small employers. Of the 1,600 surveyed in that Restaurant Association survey, 40 percent said they would be likely to close on public holidays, because it would not be profitable to open. The alternative is that the extra costs are passed on to consumers in a public holiday surcharge.

About 27,000 workers who might otherwise have been prepared to work will miss out. Mr Robson claimed that the tourism and hospitality industries will be well served because people will have had all that time off, but he did not acknowledge the fact that they would have had nowhere to eat out.

I also believe that this legislation in no way deals with the work-life balance. In cases of workers who are young, who are trying to do the best for their families, and who are trying to get in as many dollars as they can while they have the energy and time to work, there is absolutely nothing in this legislation that commands them to take a holiday. There is nothing in this legislation for the poor employers who have paid them, worked them, then sent them out for 3 to 4 weeks’ rest, only to have them come back worn out and frazzled because they have chosen to work somewhere else. Under other legislation, if those workers suffer stress or strain the employers will be embattled in that area, as well.

United Future is a centrist party that believes that legislation must be fair. We believe that legislation must be balanced, and we do not see in this legislation the fairness or the balance that we would like. Part of us would have loved to be able to support this legislation, because many parts of it are right and correct. But, unfortunately and overwhelmingly, we feel that the balance has gone out of it, and therefore we must oppose it. Bosses and workers have already been moving towards alternative arrangements, such as flexitime, and payment on the basis of productivity rather than a punch-clock, without having a bill like this. We do not believe that we can legislate for people’s lifestyles; we believe that there must be a working relationship. As much as United Future would have liked to support aspects of this bill, we must oppose it on its third reading.

Following that contribution, I seek leave for an extension of time for Mr Adams to complete a speech that was obviously cut short.

The ASSISTANT SPEAKER (H V Ross Robertson): No, no. The member cannot do that. It is against Speakers’ rulings.

The ACT party is continuing to vote against this bill. We did support the objective of revising the Holidays Act, as the labour market has changed significantly since 1981 when the Act came into effect. The intention of revising this legislation was to clarify and simplify employees’ holiday entitlements, and for that reason its revision was long overdue. I think a survey was done of complaints about employment law, and the Holidays Act ranked among the highest of the complaints. But the Holidays Bill, as now amended and going through the House, certainly does not clarify the situation. In fact, this legislation raises the uncertainty stakes for employers, and raises the risks for employers. No, it is not the end of the world. It will not bring down the economy as we know it in New Zealand, but it will be another one of the number that adds to the death by a thousand cuts.

Nowhere will this legislation impact more than on small businesses in New Zealand. Something like 80 percent of New Zealand businesses are classified as small to medium-size—businesses that employ fewer than 15 people. Many of those businesses would like to employ more people, but it is just getting too hard. They can afford to employ more people. It is not the fact that they do not have the profits. It is the fact that every piece of legislation that we pass—I have been here for only just on 18 months and we have passed several—makes it much harder. The Holidays Bill will actually lock people out of work. It is not about helping people into work, it is about protecting those people in work—especially those who belong to a union.

We particularly object to the undemocratic way this bill has been used as a stalking horse for the 4-weeks’ mandatory annual leave. The Prime Minister gave a promise to a Business New Zealand conference that a provision for a minimum of 4 weeks’ annual leave would not be passed by Parliament. But then Matt Robson’s bill was introduced, and the New Zealand Council of Trade Unions came calling and put the hard word on. In the meantime, many businesses—many of which made submissions to the Transport and Industrial Relations Committee—ignored the 4-weeks’ annual leave bill or did not treat it in a serious way, because they believed the Prime Minister when she said that it was not on the agenda and would have no chance of being passed by Parliament.

But, as I said, the unions put on the pressure, and at the Labour Party conference not long ago the Prime Minister found a way to try to keep the promise to business and to try to placate the unions. I believe that it is constitutionally unsound that we are now in the situation whereby a 4 weeks’ minimum leave provision has been hastily incorporated at the last minute into this bill—which we will pass today, right on Christmas—that will not come into effect until 2007, which will bind a future Parliament. As I say, it is constitutionally very shonky and very dodgy.

It is also a very good lolly, if one likes, for the Government to campaign on at the next election and say: “Vote for us and we will give you 4 weeks’ holiday”. The Prime Minister, when she made the announcement that those 4 weeks would be brought into this bill, made the justification that the economy would be improved and that the bill would not harm the economy, because giving workers 4 weeks’ minimum leave would increase productivity. There is absolutely no evidence for that, at all. In fact, if that were the case, why should we stop at 4 weeks? Why not make it 6 weeks’ minimum leave? If productivity is to go up by having a rise from 3 to 4 weeks, then surely it would double if we went to 8 weeks. So that is an absolute non sequitur.

The ACT party feels very strongly about this whole bill. In the way it has been progressed, the 4 weeks’ minimum leave provision makes a mockery of the democratic process and, especially, of the select committee process. The cost to the country, in terms of financial cost, will be massive. It will not be a cost just to the private sector. There will be a huge cost to the public sector in those areas where there is not already 4 weeks’ minimum leave, as well. The Auckland District Health Board has signalled that it spends nearly $2 million per year on wages. Where will the money to pay the increased costs come from? Will there be increased taxation, or will there be reduced services?

We have heard from submitters who talked about the cost of giving time and a half for those who work on public holidays. Already their workers, in effect, get double time for work on a public holiday, because they get a day off in lieu. This bill, when it goes through, will raise the cost to employers to three times the normal hourly rate. There are also the increased costs, which are put in the “hard basket”, of finding people to work on those days.

In effect, we will see more stress. This bill will bring in more stress, because all those small-business people—many of whom are women running their own businesses and employing three, four, or five people in cafes and those sorts of places—will not be able to afford to employ more or different people to work on those statutory holidays. They will be working those holidays themselves. They will not be able to increase their time with their families, or be able to balance their life and work, as this bill pretends to provide for people to do. They will be under increased stress. If this Government were serious about reducing stress, why does it not extend that regard to employers? Why is it only employees who are purportedly affected by stress in the workplace?

Another area that we argued against in the select committee was the issue of “pay as you go” holiday pay. We had a small victory in that casual workers, if it is agreed between them and their employer, can choose “pay as you go”. After 2007 that amount will be 8 percent added to their weekly wage packets, and until then it will be 6 percent. As long as they know what is being done, that is fine and fair enough. But why not extend that choice to all workers and employees? Why are they not capable of making that choice as well? Permanent part-timers, in particular, might have several jobs. They do not want to go around trying to get their holiday pay from this employer and that employer at the end of every financial year. They might like to get that holiday pay in their packets at the end of the week.

That is an example of how this legislation is patronising. It treats employees like children who cannot make up their minds, and employers like adolescents—naughty adolescents, at that—who want to rip off workers wherever they see the chance. It increases the them-and-us attitude.

The last thing I would like to address is bereavement leave. We argued in the select committee about whether any employer these days would deny a worker time off for the death of a close family relative. The Labour members on the select committee insisted that it still goes on, but when challenged to name one employer that would deny leave, they could not name one. Last week, the OECD report on New Zealand’s financial performance especially singled out the 4 weeks’ minimum leave as a backward step that would take New Zealand back, in terms of prosperity. That is not just some abstract, academic rambling from Paris. It means that every worker in New Zealand will have less in his or her pay packet, because it will cost the country and it is taking us backwards.

Sometimes, one listens to the most amazing things in this House. I find it absolutely galling that that member—who is probably the only member of Parliament in the Chamber who still has not paid her grievance settlement to the worker whom she ripped off, and who has never had less than 4 weeks’ leave in her life and takes holidays when she feels like it—stands up and says it is patronising for workers to get 4 weeks’ leave. There is a word for that. We cannot use that particular word in the House, but I say to that member that she should pay her bills and treat her staff with some decency. Then there would not be a need for Parliament to pass legislation like this. I tell members that if it were not for the fact that there have been Labour Governments over the years, workers would still be on 2 weeks’ holiday. That is what that member would deem to be about right.

I have been going around and talking to the workers in my electorate. When I talk to them about some of the Opposition’s arguments, they say: “Let them work 49 weeks a year and have 3 weeks’ leave. Let them do that, and then let them come and talk to us about how patronising it is for us to get 4 weeks’ annual leave.” I have negotiated wages and conditions in a former life, and I know the workers never got a jot more than what they were entitled to under the legislation. Employers are not quite as benevolent as some would make out. Sure, they value service and time—I will give Mr Adams that particular point—but members must not think for a moment that employers are benevolent to the point of giving people all the time off that they require. We should be clear on one thing: leave is essential to the good mental health of workers in performing their work.

I make one final point in conclusion. If all those alleged fears about this legislation driving the economy down are true, why is it that, at this particular point in our history, when we have gone through a point of considerable reform in the labour market, we have the lowest unemployment rates that we have had for 15 years? I say to those members opposite that they will live to regret the speeches they have made in this particular debate. They have been totally irresponsible in the way they have promoted this legislation. It is a good bill, workers will welcome it, and if those members want to oppose it at the next election, be it on their heads.

It is always an advantage being able to rise after a speech delivered by Mark Peck, and that speech made about as much sense as does his member’s bill, the Status of Redundancy Payments Bill. We will have some time to debate that in the new year.

It is rather apt to say that we are having the third reading on the Holidays Bill on the last day of Parliament in the 2003 parliamentary term. It is interesting that this is an area that does interest all New Zealanders, unlike some of the legislation that goes through this House. I will not have an opportunity to be in the adjournment debate tonight, so may I take this opportunity to wish a very healthy, happy, and joyous holiday to those people who work around Parliament and serve the parliamentarians so well, and we look forward to seeing them all relaxed after the 2003 holiday break.

I want to turn to the Holidays Bill and expose it for what it really is—a shameful election bribe from a Government that would not know how to run an economy to save itself. This is a Government that has had some very, very lucky conditions fall in its lap, and all of a sudden thinks it is the new George Soros of the Southern Hemisphere—someone who would know how to run an economy. Well, this is another retrograde step for all New Zealanders, and living proof of it will be when 4 weeks’ holiday is introduced—if this Government is given the opportunity to do that, and I very much doubt it will be.

This bill was brought about because the industry asked for it to occur. The industry asked for the very complex area of holidays to be simplified and made a little more user-friendly. I want to quote from Simpson Grierson, that fine and reputable law firm, whose employment legislation department summarised the new bill simply as this: “Not only has the bill missed the opportunity to simplify this complex area of law, but there are a number of new concepts they have introduced with little or no public debate.” What is the firm talking about? The bill that was presented to the select committee did not talk about 4 weeks’ holiday; that measure was in a member’s bill—a bill members on this side of the House did not expect to see the light of day. We did not expect it to see the light of day because on the campaign trail, the Prime Minister of New Zealand, the Rt Hon Helen Clark, told employers up and down the country that she would not support 4 weeks’ holiday. Her commitment to the country was that the Labour Government would not support 4 weeks’ holiday. That is what the Rt Hon Helen Clark, the Prime Minister of New Zealand, promised business groups as she tried to get re-elected. She promised she would not sell out and introduce 4 weeks’ holiday. Well, the Government has found a very cute solution to that. What could that be? It is that it has decided to introduce its wonderful idea not in 2004, not in 2005, not in 2006, but in 2007—.

💬 Hon Maurice Williamson: The year before an election.

—in the year that it can hold it up as an election bribe. If it were such a magnificent idea, I would have thought the Government would be rushing to bring it in today. If it will not have an impact on productivity for New Zealand companies, then why does the Government not give everybody 5 weeks’ holiday, or 6 weeks’ holiday? Why does it not take any of those measures? The reason is that the Government knows this bill comes with a huge price tag—a price tag that it first tried to dress up as $350 million. That was the spin that came out of the Labour Government. That was the theoretical cost—$350 million. But, lo and behold, when we in the National Party did a bit of research under the Official Information Act we discovered an internal memo within the Department of Labour that showed the real cost would be a minimum of $800 million—not $350 million but $850 million. Who would be paying for that? In fact, half of it would be paid for by the employees themselves. The very people who should be enjoying higher living standards and higher wage rates will be paying for their own election bribe.

This is a Government that wants to write cheques that the poorer paid employees of New Zealand cannot afford to cash. If work-life balance is the huge issue that Mr Peck and this hapless Labour Government want us to believe it is, then why, as the Employers and Manufacturers Association quite correctly pointed out to the select committee, is there $100 million of unpaid holiday entitlements not taken?

💬 Simon Power: And that’s just in the police.

I think it is even broader than the police. If it is such a huge issue, why are people not taking their current holiday entitlements? It is not the issue that people argue. What young and lower-paid New Zealanders really want are opportunities to earn more money.

💬 Simon Power: To pay off their mortgages.

And their student loans. They want a chance to get a job and make their way in the world. The vast majority of New Zealanders do not believe that life revolves around redistribution and Government handouts. The vast majority of New Zealanders, unlike Mr Peck, are prepared to go out there and back themselves to deliver a bigger and brighter future for themselves.

This bill is a retrograde step. It is another sign of the nanny State in command and control, and in which Helen Clark and the Labour Government know how many holidays are best. We on this side of the House say that that is not acceptable; it is not the right solution—and we are not alone. One of the first things highlighted in the OECD report was the strength of New Zealand. One of the reasons the gains over the last 10 years have been so great is that New Zealand has enjoyed labour market flexibility, yet the OECD flagged the fact that that flexibility is being eroded every day this Government is in office. Mr Robson, the main advocate of this bill, said to a number of people on the select committee, and has said publicly—and I am sure he will say it in this House when he gets his opportunity—that this is a good thing because it matches many countries in the world that he would hold up as being advocates for this kind of policy.

A country he does not hold up is the United States of America, which has 2 weeks’ holiday—

💬 Hon Matt Robson: For a very good reason.

He says there is good reason, but let us look at it this way: the United States of America is a country with 240 million – odd residents who enjoy a living standard almost double that in New Zealand, with the average take-home pay in America being 180 percent higher for every man, woman, and child. The kinds of policies that that member is advocating are constricted mainly to the European Union where the standard of living has been on a rapid and continuous decline ever since it had those sorts of socialist policies. It took me to point out to Mr Robson that even the French unions have started lobbying their Government to reverse some of the very strict 35-hour week and extended holiday provisions. Even the French unions have taken that opportunity. If it is good enough for the French, then Mr Robson is a step behind the pack and he should take the opportunity over his holiday to review this. He should personally come to Parliament in 2004 and beg for forgiveness. We will have plenty of time, because the Government will not introduce this magnificent measure until 2007. So it will never be too late for the Government to say, like the 18 tax rises, that this one has just been too much. It will not take too long.

I will touch on one last point in my third reading address: the issue of average rate. One of the very serious issues that many employers told us about is that they have negotiated a standard average pay day with their employees on the basis of good faith, understanding that it would take into account all holidays, all highs and lows, the average extra time worked, and all that sort of stuff. As a result of this legislation, the average rate will be applied to all statutory holidays and all sick leave. It will also be applied in respect of time and a half on statutory holidays, which we find rather offensive. Mr Speaker, I wish you a very happy holiday, a merry Christmas, and a happy New Year.

I am delighted to rise briefly in support of this legislation. What began as a rather mean-spirited contribution from the member who spoke before me warmed with the spirit of the season. I would encourage him to apply the same human concern and friendliness to the members of the workforce of this country.

I will start my debate by wishing everybody a merry Christmas, because what I am going to say, in terms of what will happen in the real world, in the business community, is far from encouraging. This bill is one that, at the end of the day, degrades employers and employees and increases the compliance costs of doing business. But that is understandable with this Government because it is anti-business, anti-growth, and anti anything to do with growth. Yet an economy that requires 4 percent growth to maintain and achieve the expectations of New Zealanders in health care, in education, and in everything else is simply not there.

We are a nation of small businesses. The number of small businesses has been mentioned in previous debates—267,000 small businesses employ fewer than 10 people. Over 90 percent of businesses are small businesses. A damning report has been published by the Ministry of Economic Development. The ministry has special responsibility for businesses in the small and medium sector, and that information is of major concern to operators. It states that the profit income for small to medium enterprises—those that employ from one to five employees—is alarming in terms of the amount of money they are making. This is a report from the Government’s own ministry. It states that the average income in the sector is $31,000, or, looked at in another way, less than the average wage. These are small businesses that will now have to meet the extra compliance costs as a result of the Holidays Bill, along with the other 17-odd tax increases in the last couple of years.

Dr the Hon Lockwood Smith: It’s 18.

This will be 18, and it will be the one that will blow the Government out. The report states that to earn the average income of $31,000, an owner-occupier will be fully employed in his or her business, and, if that person works 37½ hours per week, with the average amount of time off for holidays, statutory holidays, or whatever, his or her actual average earnings per hour will be $17.22. If we take into account all the non-productive time that businesses have to comply with—the paperwork that goes with being in business—then the rate per hour is $15.37, which is not an attractive proposition. What we are seeing with this bill is an expectation that employees will have 4 weeks’ annual leave and, on top of that, they will have the 11 statutory holidays they currently have, that they will be entitled to a provision of 5 days’ sick leave, which can be accumulated over a number of years, and a new provision of 3 days’ bereavement leave for a close relative, which I will speak about later on, as well as another day for a close associate. If we multiply those hours out, they come to 320 hours of non-productive time. That is 320 hours taken off the 2,080 hours that I would have to pay my employee—52 weeks a year times 40 hours a week is 2,080 hours, less 320 hours, leaves me with 1,760 hours of productive time that can be put into my business. That equates to 44 weeks in the year. If we take that away from the 52 weeks that have to be paid for, under this bill employees will get the equivalent of 8 weeks’ leave. As John Key mentioned, in European countries where productivity is so low because there are extensive holidays—Austria has the most generous scheme; France has a 35-hour week and 5 weeks’ annual leave, which is very good for employees—the productivity rate is such that those countries are having to reassess exactly how they will operate in the future.

Business is very fractious at the moment, and this Government has done absolutely nothing to improve its lot. If we look at the 4 weeks’ annual leave provision, we see that the massive cost that will be incurred on employers and on workers was underestimated at the initial introduction. In fact, we were told that the cost would be only about $350 million. If we look at the real cost, we see it is up to $800 million. An interesting statement that was put out was that the Department of Labour and Treasury figures, issued when the extra week’s leave was announced, estimated that the law change would cost employers $350 million. Cabinet papers released under the Official Information Act show that this measure will also hit employees in the pocket by another $350 million in lost wages, conditions, and trade-offs. That is $700 million. If we add the inflationary costs on to that, we see that the figure that was mentioned earlier in the debate, $800 million, is unrealistic.

A spokesman for the Minister of Labour, Margaret Wilson, defended the announcement and said that it had always been made clear that there would be unspecified flow-on costs. That is what was said. She said: “You don’t get something for nothing.” Well, fancy that! We have always said that there is likely to be give and take when it comes to wage negotiations. The bottom line is that the monetary costs are very small compared to the total wage bill. The total costs that business will have to carry on this measure are far from small. The information I have supplied to members this evening shows that small businesses are struggling to make ends meet at the moment on an average income of only $31,000 of take-home pay for the owner-operator. This extra compliance cost will be another nail in the coffin for them.

If we look at the total scene—at what this actually means—we can see that it is a draconian piece of legislation. The provision that I want to draw the House’s attention to, and which I spoke about at some length during the Committee stage debate, is the unspecified bereavement leave provision—the 3 days of bereavement leave for a close relative, and on top of that the 1 day for a close association. In talking about sickies, and that will be the proverbial that will happen now, sick leave and bereavement leave provisions will be unlimited. When one is running a business, it will be very, very difficult to be able to sustain a workforce and have that productivity and provide those employees with the best conditions. We do not begrudge anybody having extra leave, but it is about choice. National’s position is very clear. A lot of people get 4 weeks’ annual leave now; that is fine. But why do we not say that it is about choice? If someone does not want the 4 weeks but would rather have the extra pay, should that not be an option? In Auckland, where the cost of living is so high, people I have been talking to are saying that they would rather have the option to be able to decide whether they take the 4 weeks’ holiday or whether they have the extra pay that goes with it. When one has cost of living increases—and the cost of living is far greater in Auckland than what it would be in, say, a rural area—then that is one of the options that should be provided.

At the end of the day this bill will be paid for by employees. There will be a wage cap. Someone has to pay, and it is the employers who will have to pay for this, not the Government. The Government is very generous in providing these sorts of conditions, but at the end of the day it will be the employers who pay and the flow-on effect of that will be wage caps for employees. We will not see those wages and conditions that one would expect in the longer term carried through. The total cost of this legislation is unwarranted. It is National’s view that this bill is unnecessary and draconian, and National members, as we have done throughout the debates, are voting against it.

We have heard some interesting commentary on this bill. I stand to support the bill today, and I point out to our friends on the other side of the House that if France’s productivity is such a terrible problem, etc., why is it that a French truck maker took over the biggest, strongest American truck maker a few years ago? These are the sorts of things that are always debatable. I strongly support this bill.