Parental Leave and Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Bill

As National has made clear in the first reading debate, through the select committee process, and at the second reading, we support this legislation. Our major concern previously, when the legislation of 2002 was introduced, was that it cut out self-employed people. It is pleasing to see that the Government has finally seen sense, albeit belatedly, and is now including them.

I did signal last week that I intended to introduce a Supplementary Order Paper that would essentially provide an option to self-employed people to either take the welfare payment as it is provided for in the legislation—clearly a form most preferred by the Government in its passionate desire to turn as many people in the nation into welfare beneficiaries as it possibly can—or have the choice of taking a tax deduction. There is a reason why that Supplementary Order Paper is not on the Table today to be debated. I took advice from the Clerk’s Office on whether it would be within the Standing Orders to take such an approach. The difficulty is that to effect such an option does not so much mean changing this legislation, which is about welfare payments, as actually changing the Income Tax Act itself. I am advised by the Clerk’s Office that that is outside the scope of the bill. That is why a statement I made last week cannot be fulfilled today.

However, I am signalling more generally that that is National’s preferred approach. The reason is that it fits the way that self-employed people see themselves. They do not actually want to go through all the rigmarole, compliance costs, and bureaucratise of applying for welfare payments; they would much sooner, as part and parcel of their business accounts, simply make an additional claim for a tax deduction or tax rebate. That would be much simpler, much more straightforward, and involve far fewer procedural issues than this provision applies. But the Government has simply rejected that option and will not follow it. It is much more likely that that is one of the approaches that National would provide for the future.

The fiscal effect, of course, would in essence be the same as this. We would, obviously, intend the claims to be, in essence, of the same size, but we would provide choices in the means of delivery—one that suits the Government’s mania to turn all New Zealanders into welfare beneficiaries, and the other that respects the way in which self-employed people actually live their lives, which is that they would sooner deal with the issue through the normal accounting process.

However, turning specifically to the purpose in general here, members will note that two things are being sought in this bill. One is, obviously, the extending of the parental leave period for self-employed persons, which is covered in clause 3(1). Clause 3(2) reduces the minimum period—and it is important to get this right—before an employee is entitled to a subsequent period of parental leave from 12 months to 6 months. It would be useful for the Minister, Ruth Dyson, to give a more complete explanation of this.

This is not the situation that came up some time ago when the paid parental leave period was increased from 12 weeks to 14 weeks, and when the time of application from when first employed was reduced from 12 months to 6 months. That is an issue in the past. I am not contesting that particular point. This is more specifically about subsequent claims. On the face of it, one would ask how this could actually be. A question that could legitimately be asked is how a person can make a claim in just 6 months. Logically, one would normally expect there would be not less than 9 months between periods—the self-evident period between births cannot be less than 9 months.

I presume the provision is in there for adoptions, primarily. One could imagine adoptions arising in a period of less than 9 months post the previous claim for parental leave. I presume that actually is the intention of that provision, but certainly the Business New Zealand submission was also rather surprised at the change of the 12 months down to 6 months, it could not quite see the point of it, and it suggested that the 12 months should apply. As I say, I appreciate it is quite a different issue from the one that arose a couple of years ago, but it is at best curious and, as I say, one would assume essentially deals with the issue of adoptions.

The other point that one notes in clause 3(2)(c)—“allowing a right of review by the Employment Relations Authority in respect of entitlement to a parental leave payment.”—is that if a Government has a welfare system, then I guess this is the way to go, but it is actually quite a complicated compliance cost. It shows the whole approach of the current Government to add layers of bureaucratise to the system—like the prospects of substantial legal fees for both parties, and so forth. I presume it would be the intent of the Government to have those matters dealt with fundamentally by mediation, but I see in the bill that it has also added the right of review, and all the cost that that implies. Again it might be useful if the Minister explained the purpose really of adding in an additional right than is necessary.

I make it clear that National is supporting the intent. It was my intent, as I indicated last week, to provide the option, but the Clerk’s Office has said that such a Supplementary Order Paper would have been out of order; so I did not do that. I have had to signal that point for the future. But we do have some concerns about the change from 12 months to 6 months, or at the very least we would like an explanation as to why it is there. I noted the Minister indicated the reason that I gave is not the reason. As I say, Business New Zealand was rather puzzled, so it would be useful to put on the record of the House why it is there, and the other matter, I guess, the Minister may choose or not, as the case may be, to respond to.

Members will know that in the past National has opposed paid parental leave, and the reason we opposed it is that it was unfair; there was no equity. It was very much designed around those in employment. We are a nation of small businesses, and the people who invest in their businesses, the business owners, were the ones who missed out. Many business owners are women. In our view it was quite discriminatory that a self-employed person who owned a business was not eligible to participate in the paid parental leave scheme. We have taken that point over a number of years. We see a change now, and we welcome this opportunity whereby self-employed people can be part of the paid parental leave provisions.

The purpose clause states that the main purpose of the Act is to entitle certain self-employed persons to parental leave payments. So that is a welcome change, and I tell the Minister in the chair, Ruth Dyson, that we think it is a good move and we support it.

But I want to pick up on the point that my colleague Dr Mapp talked about in terms of subsequent periods of parental leave, which comes under subclause (2)(a) of the purpose clause. I note that the New Zealand Retailers Association’s submission gave an example of eligibility for subsequent periods of parental leave. It gave the case of a mother-to-be who starts work on 1 January. She is 2 months pregnant at the time, and the baby is due on 1 August. On 1 July she starts her 14 weeks’ maternity leave, having been employed for 6 months—that is, 7 months to the due date. She returns to work on 8 October, and by 8 April the following year is eligible again. So that is a very important point to take into account. The association says that even allowing 1 month spare, she could deliver her next child as early as June, starting her leave in May. The employer has the same struggle for temporary replacement, in July of one year and May of the next year, and so it goes on. The employer is faced with the repeated, and very real, costs of recruitment, training, and lost productivity.

I do not know whether the Minister has seen that submission, but it demonstrates what can happen in practice. In the workplace, those who are employing staff want some certainty and continuity. Under this provision now they are quite happy to extend it to self-employed persons, but, at the same time, there was an argument that the period of 6 months was too short and it should remain at the original 12-month period. For businesses whose employers are offering that service, and now have to provide it by legislation, that is not an unfair argument. They are happy to comply with the law to provide paid parental leave, but say there should be the 12-month provision. Not only the Retailers Association but also Business New Zealand, which represents a huge number of businesses throughout the country, recommended that 12 months continue to be the minimum period that must elapse before an employee again becomes entitled to a period of parental leave.

The industry makes a strong point, and I do not think it is unfair that that should happen. National looked back at the reasons why we did not support paid parental leave at earlier times. We think the new provision overcomes that, but we argue that 6 months is too short and that the 12-month provision is fair and equitable for all those concerned.

I would like to take the opportunity for a brief call to clarify the questions that both Mr Tisch and Dr Mapp have raised, which demonstrate two things to me. The first is their continued opposition to paid parental leave in principle, which I find totally gobsmacking. I cannot believe that a party can continue in this day and age to oppose financial support to a new mother primarily, or a new father, when a new baby is either born or adopted into their family. This provision is a fundamental point of social security for families, and for the National Party to continue to oppose it, and, at the same time, demand the extension of the provision, really beggars belief.

I will clarify the point raised by Dr Mapp, and I do trust that he was not on the Transport and Industrial Relations Committee, because for a member to have gone through the entire select committee process and still remain so ignorant of such a basic point in the legislation would be of major concern. So perhaps he was not on the committee; I certainly hope so. The point is that it is not 6 months after the birth of a previous child; it is 6 months after the person has returned from parental leave, and parental leave is still, unfortunately, a lot longer than the current provisions for paid parental leave. It is not in Europe; in Europe they have 14 months paid parental leave. In New Zealand we have 14 weeks. So, obviously, if we were saying someone could have a child 6 months after the birth of a previous child, we would be challenging more than just the legislative framework in New Zealand!

💬 Darren Hughes: That’s politically correct!

Yes, that would be PC gone mad, I hasten to add. So it is 6 months after the return from parental leave, which is obviously a lot longer than the paid parental leave provisions.

I conclude by saying that this bill is a very good extension of our existing paid parental leave scheme. We will continue to review and extend it. I would like to know, by the end of the Committee stage of the debate—or, if it is not possible for the National Party to get its head together and agree by that time, maybe by the third reading stage, which will hopefully be later this week—whether the National Party still opposes this scheme, and whether it will repeal it if it is ever in the unfortunate position of being the Government of New Zealand. In the end, National members cannot have it both ways. They cannot continue to oppose a scheme in principle, call for its extension, and then say they will vote for one part of it. National is either for it or against it, and New Zealanders deserve to know what the National Party, if it were ever leading the Government, would do with this paid parental leave extension.

I raise a point of order, Mr Chairperson. There have been three outstanding speeches from National—my colleague Dr Mapp took a second call—and in that time it became very evident that National was supporting this bill. Yet—

The CHAIRPERSON (H V Ross Robertson): Would the member be seated, please. I am on my feet. The member is starting to lead into a debatable issue, and that can be taken care of when I call the next speaker.

It is an absolute pleasure to be here today to support the Parental Leave and Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Bill. While we were in the Transport and Industrial Relations Committee I found it very reassuring, and a blessing for this environment, to find out how National, Labour, and New Zealand First members could work together constructively on legislation that benefits this country.

💬 Hon Brian Donnelly: Are we talking about the grand coalition here?

No. It was first time I could see commonality between all parties, and it was a long time in coming. That select committee has gone through a lot of legislation that we could not agree on, but we found that things changed overnight as parties looked to their political whims—especially in respect of certain pieces of legislation. But today we are demonstrating how politics in New Zealand can work, and how people can come together for the right reasons. It is a real pleasure to be part of that environment.

Contrary to the comments of Minister Dyson, who throughout her speeches has been trying to label the National Party as being against this process, and to portray it in a way that is totally incorrect, the National Party is moving forward and developing policy that is for everyone. When we look at the purpose clause, we see that it covers basically one page of the bill. But it is a good synopsis of the whole legislation. When we look at the word “purpose”, we have to consider what that means.

The Labour Government has no purpose; it has no idea what it wants to do in this country, and it never will. It is just a Government that taxes and spends. When I look at the purpose of this legislation, the key word for me is “self-employed”. Why is that the key word? Why do we have legislation that has provisions for the self-employed as its purpose? It is because Labour did not deliver for self-employed people when it put forward this legislation in the first place. It tried to deliver only for those who were employed—the people whom they thought would vote for them. What happened then? Three to 4 years later new legislation—an amendment bill—has come forward that has organisations like the Nurses Organisation and Business New Zealand all standing up in front of the select committee and saying the same thing: “Deliver for self-employed people just like you delivered for people who are in employment relationships.”

So the purpose of the legislation concerns self-employed people. We should not need to have legislation that dictates to self-employed people. It creates a distinction in this country between those who are employed and those who are self-employed. A true Government would not have created that distinction in the first place. A true Government would have kept the purpose of that original legislation in 2002 for all New Zealanders. Not all dogs are treated in the same way, but all New Zealanders need to be treated in the same way.

Clause 3, “Purpose”, states: “(1) The main purpose of this Act is to entitle certain self-employed persons …”. Even the word “certain” dictates what Labour thinks about self-employed people. It does not give to those people the same credibility that it gives to employed people. They have to wait 3 or 4 years for their justice. Then, when they receive that justice, they are called “certain” self-employed people. Labour is saying it does not want all self-employed people; it wants only “certain” ones—the ones whom it can control, and the ones whom it thinks will benefit from it. That shows a Government that has no purpose. Just as the legislation does not need a purpose, this Government has no purpose. It has no idea what is going on. It just looks around for whatever the latest poll indicates might be a purpose. What does the latest poll say? Let us talk about the polling in respect of Telecom, for example, and how great the purpose of the Government has been in respect of people and their shares. That shows a lack of purpose. Labour will change its mind if it thinks that it is more than just employees who are at stake—if the Nurses Organisation and Business New Zealand come together.

I have to give credit to the Department of Labour. It was brilliant during the select committee process. As a new member of the House, I would like to give credit to all the Government departments that my constituency has worked with.

New Zealand First has always strongly supported the principle of paid parental leave. I mention the word “principle” because we did not always agree with the details of the legislation that went through the House earlier. David Bennett raised the question of why the self-employed were not included in that legislation. I say to David, who is a new member, that when we sat through hearings on the legislation it was very obvious that the philosophy of many of the instigators behind the paid parental leave movement was that it was all about employment rights. That is what drove them.

From New Zealand First’s point of view that is not the fundamental issue. The fundamental issue is how we can create policy settings that will ensure the best quality of the next generation, and how we build a nation that will maintain its strength and competitiveness. One of the things we well know is that the strength of the bond that is established between parents and child in the first few months endures over a whole lifetime. Yet what had occurred in our society was that employment conditions had become such that many parents—particularly mothers—had to go back into paid employment within weeks of their child being born. We saw that that was not creating the healthiest society, and that we needed policy settings that would allow for a different approach.

So New Zealand First, from the outset, has always argued that the self-employed should be involved in and included in this type of legislation, because of the philosophy we are attacking it from. It is about how we continue to rebuild and get the best nation into the future. So we are very, very pleased that the sorts of statements we were making back in the time when the initial legislation came through have been finally heard.

I make one comment before I finish. Over this weekend I will be fortunate enough to have my first grandchild born. I am very, very pleased that the parents of my first grandchild, Catherine, will receive the benefits of the provisions that are in the paid parental leave legislation that has been put through in the last few years.

I sat through the submissions on the Parental Leave and Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Bill, and I was absolutely thrilled to hear the ones that came from a variety of places and a variety of people. I stand quite proudly in support of this bill. I would like to address a few concerns to the Minister in the chair, Ruth Dyson. What I am interested in discussing, and hearing about from the Minister, is the bigger-picture stuff.

I do agree with this bill. I think it is very important that we are identifying predominantly those mothers who are having babies and need our support to take time off and then go back into their businesses. I certainly support the purpose of this bill, which is to give those parents the opportunity to provide one-on-one care and still be able to have an overall administrative insight into their businesses. What I do ask, though, is that we look at the bigger picture of where we are heading with women and children in society and how we could have identified some of those things as we looked through the bill, because it really is about women having children later in life, and it is equally about their employment opportunities.

The call from the Prime Minister earlier this year was to see women having more input into the workforce and being “more productive” I think were her actual words. Although I am sure we could all take umbrage at the words about women being more productive, I do ask how we can look at helping women to get back into the workforce. I would like to talk a bit about adaptive parents—those parents who adjust their employment and their businesses to be able to raise their children. They are the women who do need that flexibility and need a Government that supports them with what is happening. They also come up with the bigger picture of what is happening to our children as they are raised more and more in day-care facilities—and I do not think that any of us know the effects of that. It is a question that I think we really need to be asking.

One of the things that came up in the submissions—it was quite interesting, and I would like the Minister to comment on this, as well—was that paid parental leave be paid in a lump sum. At the moment it is paid over 14 weeks at, from memory, $357 a week. The purpose of this bill is to support those parents financially while they take time off. What came up from a couple of the submitters is that it would have been helpful for them to have the money in a lump sum. The select committee looked at that, and it is something that I felt quite strongly in favour of but I could not convince my colleagues at that stage.

If the money were given as a lump sum it would mean that parents would have the choice on how they spend the money—whether they supplement their income, whether they pay for their mother to fly from Dunedin to Auckland to help them in the first 3 or 4 weeks, or whether they use it to buy the new pushchair, or whatever. A lump sum would give them a bit more freedom, and more opportunity to think about how to spend it. So I challenge the Minister to talk to us about the bigger picture and the changes that are happening in society. I feel that the amendments to the bill could have gone a lot further. How do we feel about broadening it out and giving a payment to all parents, whether or not they are in employment—self-employed or in paid employment? How about the baby bonus scheme? How about making the amount $5,000, which is about the equivalent of 14 weeks divided by $357? How about rewarding those people who are doing something for the future of our generations? This could be helping anyone from any ethnic and employment status. I say it is time we started supporting those who are taking that huge, momentous step of becoming parents, and it is time we acknowledged that role. I do not think we do acknowledge parenting as an important role, and that was certainly evident when the original paid parental leave legislation came before the House and we did not include paid parental leave for the self-employed.

I think we are thinking too small. I do not stand before members right now, saying that I have all the answers, but I would like to hear from the Minister about some of the bigger-picture stuff that we as a society currently have to look at. Those questions are not even being asked, let alone answered by the current Government.

I thank our whip for the opportunity to partake in the Committee stage debate. I am one of the few who has been and will be speaking who was not on the Transport and Industrial Relations Committee and has not been part of the process to date.

It is nice to be part of the National Party in supporting this bill. This is the second time I have had the pleasure of actually supporting a bill that the Labour-led Government has brought forward. I put it on record that I will not often personally be doing this. In fact, there is a bill coming up soon about microchipping dogs, and I can assure members now that I will not be standing and supporting that bill during its Committee stage. I did note when I did my reading on this bill that 19 submissions were made on it. I can assure members that there will be a helluva lot more than 19 submissions on the dog microchipping bill that is coming before this House very shortly.

The member beside me, Paula Bennett, raised something I have some real sympathy with. I remind members that I did not sit on the select committee, but I have been privileged to have worked very closely with a business partner who was self-employed, is still self-employed, and had the joy of having a fantastic boy not that long ago. If I look at her case I know for a fact, because of the conversations we had in the process, that the $357.50 that we are supporting as the leave payment would make a real difference to her situation. But I have to say—and it is specific to her situation—that she wanted her mother-in-law to move in while she was—

💬 Paula Bennett: Mother-in-law?

Yes. She has a really nice mother-in-law—not like the mothers-in-law they may have on the other side of the Chamber. The biggest problem for her was that they had just spent money on doing up the baby’s room. Her husband had spent considerable capital on making sure that in their new house they had a baby’s room. They did not have any money to do the third room in the house, which they could well have put a lump sum towards to make that room habitable for the mother-in-law to live in. That mother-in-law living in their house, giving support to the new mother, would have made a real difference as she could then go to work and take the pressure off in her self-employment role.

In regard to the purpose of the bill, after reading the documents I just add that there is a provision that I do like being included, and that is the new provision that explicitly provides that an employee or self-employed person can apply to the Employment Relations Authority for a review of the decision made by the Department of Labour about his or her eligibility for the parental leave payment. I think it is handy to have the opportunity for that debate if there is a question mark over eligibility.

The thing most close to my heart when I read the purpose of this bill was the magic words “self-employed persons”. I congratulate the Labour-led Government on the fact that it is finally acknowledging the role and the importance of those who are self-employed.

💬 David Bennett: It took them long enough.

Yes. It has been a 4-year process—2002 to the year 2006—and I suggest that many self-employed people have been hugely disadvantaged by the fact that the Government has taken far too long to get this bill before Parliament. But I do think it is fantastic. In the time I have been here I have very rarely heard members on the other side of the Chamber talk so positively about those who are other than employees. Too often in this Chamber one would think that the only people who cared and mattered and had a heart and a life were those who were employees, not those who were employers or, as in this case, self-employed. We have to take our hats off to those who have the courage to be self-employed. We have to take our hats off to those who pick up the challenge and give it a go.

Today was a glorious typical Wellington day. I sat out in the beautiful sunshine having a quiet lunch with a friend, and I told her I was to have this wonderful opportunity to speak on this bill. I talked about being self-employed, and she raised a very good point with me. She said it was sad that too many of her friends were saying to her that benefit day was pay day. Benefit day is not pay day; benefit day is a privilege. The benefit is not one’s pay. I stress again that I congratulate the Labour-led Government and its partners on the fact that they are finally recognising the value of those people in the workforce who are not just employees.

I sought an additional call on this part because I want to reflect on the point made by Paula Bennett that picked up on an issue in the Business New Zealand submission—although amongst our group we had substantially discussed this issue well prior to the Business New Zealand submission—and Part 2 picks up on it again. It is what this legislation is all about, and, indeed, what it is intended to be about: employees and self-employed persons. That is the Government’s schema. So it is quite fascinating to read the submission from Business New Zealand, which, after all, would be pretty concerned, one would think, about the level of Government expenditure, and so forth. But on this issue it decided to look much more broadly, stating in clause 2.1 of its submission: “The current paid parental leave scheme, linked as it is to taking parental leave with payments available only to women in paid employment, has the inevitable effect of rewarding women in the paid workforce as against others who have may have opted to care for children at home or whose periods of paid employment are relatively infrequent and therefore fall below the threshold.”

I believe that if we stepped back and looked at the scope and range of what one might say are family friendly policies—not just of the current Government but of parties generally, and I am sure the United Future Party members, if they were here in the Chamber, would be interested in this kind of thing—we would see that they would be particularly concerned to ensure that our system of community incentives, delivered, effectively, via the Government, does not exclude people. In fact, that is precisely what this legislation does, notwithstanding its improvements, and we will certainly be voting for that. But I think that Business New Zealand actually has raised an important and wider question. Paula Bennett referred to it as the baby bonus approach to things—and I well remember when I was a student the infamous suggestion in 1974 by Roger Douglas for a baby bonus. I guess one would have to say he was a bit before his time at that point, because it actually proved to be one of the reasons why Labour lost the election in 1975. [Interruption] I am sure Mr Gosche might remember that particular point in his history in South Auckland.

But the view has changed. Ideas develop and the way our society develops has also changed. I do note a practice of women increasingly making the choice, where they can, not to be in the workforce when they are raising children. That is a difficult choice. Families often have to put themselves through significant financial hardship to do that, but they are willing to do so because it is seen as being advantageous for the raising of children. I think that most people would acknowledge that. The advantage of taking the Business New Zealand approach, and the one suggested by Paula Bennett, is that it does not discriminate but actually celebrates parenthood. The community at large, through the agency of Government, says that it can help parents, that it can give them tangible and meaningful financial assistance, and it was noted that the equivalent of $5,000—a reasonable sum, in fact—would make a real difference to their living standards, particularly for families on low incomes. One would think that the Government would be thinking of this, and that with the Families Commission, and so forth, this would be the sort of thing it would be examining.

Ironically, it comes from Business New Zealand, because under its current leadership Business New Zealand is, I think, taking a much broader view of how societies develop, and I applaud it for doing that. That has been an important change. It is a point of leadership that it has taken. So I say to the Government that this is the sort of thing that, with all its hundreds of bureaucrats, it could seriously examine for the future.

I move, That the question be now put.

Motion agreed to.

Part 1 agreed to.

Part 2 Amendments to principal Act

The CHAIRPERSON (Ann Hartley): The debate on Part 2 includes the schedule.