Minimum Wage (New Entrants) Amendment Bill

I rise to speak on clause 4 of the Minimum Wage (New Entrants) Amendment Bill. I understand there is a Supplementary Order Paper in relation to this clause. Can I say from the outset, and repeat, that the National Party thinks this is a well-intentioned bill and an attempt to avoid the exploitation and discrimination of young workers, but it is not the right instrument in which to do that.

I will pick up on one of the scenarios that the honourable member Sue Moroney mentioned in respect of the young women in the supermarket on $5 an hour. That seems somewhat incredible to me, because if those women were aged between 16 and 17, then under the current law they should have been in receipt of 80 percent of the adult minimum wage. If they are earning less than the adult minimum wage, then that is contrary to the law. That may indeed be—[Interruption]

The CHAIRPERSON (H V Ross Robertson): I just say to members that it is not permitted for those who do not have the call to interject on each other. Interjections are only for the member who is speaking.

I would also like to repeat the quote that I used earlier, because I think it is a good quote to use to preface the debate on clause 4: “What good does it do a young person to know that an employer must pay him or her”—

💬 Simon Power: I raise a point of order, Mr Chairperson. Although your ruling at the last break in proceedings was that people who were speaking could be interjected upon—and I have absolutely no difficulty with that and I am not disputing it—I would ask you to remind members on the Government benches that those who have shifted their seats to gain advantage should not use that advantage to interject on others.

The CHAIRPERSON (H V Ross Robertson): I thank the member for his contribution and say that a number of members on both sides of the Chamber have shifted their seats. I will take into account what the member has said.

I will paraphrase the quote that ended my previous speech, because I think it is a good quote to preface what I want to say in relation to clause 4. What good does it do a young person to know that an employer must pay him or her the adult minimum wage, if the fact that he must be paid that amount is what keeps him or her from getting a job? We really need to focus our minds on that, because if the bill, even though it might be well intentioned, becomes a barrier to young people obtaining work, and if it prevents them from getting work, then the bill will have the opposite effect of what is intended, and it will not be good, effective law.

Clause 4 relates to what the Governor-General by Order in Council may prescribe as the minimum wage, and this provision is in relation to 16 or 17-year-olds who basically meet the criterion. The criterion was specified in the commentary on the bill as being 200 hours of employment. We recognise the introduction of the new entrants’ requirement of 200 hours. I appreciate that Supplementary Order Paper 137 proposes to replace that period with 90 days, but I will speak to that later. The requirement is designed to provide young workers with time to acquire the skills and experience necessary to, hopefully, lift their productivity, which is what we all want to achieve, and to justify a higher minimum wage. The difficulty with this 200 hours’ training requirement is that the formula provided for it is not clear. The 200 hours could be with one employer, in which case those skills could be cumulative. It could be with two or even more employers. In that situation one cannot assume, for example, if a young person worked for four employers at 50 hours each, that that experience gained is actually transferable to the latest employment. One cannot assume that the skills and experience of the different jobs are transferable and that the young person is valuable enough to the employers to justify the adult rate.

The interesting thing about the Supplementary Order Paper is that it abolishes the youth rate—to use the colloquial term—but then it proposes to insert a provision in respect of workers who are new entrants, “being workers who are 16 or 17 years of age, except workers (i) who have completed 3 months or 200 hours of employment, whichever is the shorter;”. I want to focus on that criterion for a moment. I wonder whether the member Sue Bradford might take a call and explain what she understands by the amendment—although, of course, the amendment has been introduced by the Minister Ruth Dyson.

There are two issues in respect of this amendment. One issue is that the definition of employment includes employment undertaken with more than one employer. So this provision basically includes a young person who has worked for a couple of employers. But what happens if the young person is employed with only one employer? That is not included in this clause. I am not sure what the rationale would be for this. It seems to me that if it is a training rate, a provisional period, or something like that, then employment with one employer would translate into an employee acquiring more cumulative and better skills, training, and experience, rather than working for more than one employer and doing the same job but not learning. Maybe there is a very good reason why the provision relates to employment undertaken with more than one employer. I would have thought the correct drafting—not that I am here to help the Government draft its Supplementary Order Papers—would be that it should be one employer, or more than one employer. If that were an error of drafting, it would not surprise me.

The second point I will make in respect of the Supplementary Order Paper is in relation to the provision that the new entrant has completed 3 months of employment. There is nothing in the definition of employment to say how many hours that 3-month period of employment is. Is it 3 months? I know that Supplementary Order Paper 137 states that it is 3 months or 200 hours, whichever is the shorter, but 3 months could be 1 hour per week, or it could be 1 hour per month. There is no qualitative criterion for that 3 months of employment. I think that this leads to some uncertainty, and we all know that uncertain law is bad law.

I will talk further in relation to the wider ramifications, but those are the two issues that I raise in relation to the technicalities, if you like, of the Supplementary Order Paper. I understand and appreciate what the author of that Supplementary Order Paper is trying to achieve, but I am not actually sure that that will be achieved through this amendment.

I also say at this stage that many employers at the moment—and we understand, through submissions, that the figure is about 85 percent—already pay above the minimum youth rate to their staff. That is because they recognise that the value their staff are providing warrants a higher level of pay. I was interested to listen to the submission of the Engineering, Printing and Manufacturing Union. In its submission it advised that none of its members receive the youth rate, at all; in fact, they all received above the youth rate.

We have to wonder what the point is of having a prescriptive bill like this that could be the very barrier that stops young people from getting a job.

💬 Paula Bennett: More compliance costs.

Yes, it is a case of more compliance costs, because employers have to keep a record of not only the hours worked with them but the hours worked with other employers. They may not even necessarily know what other employers the young person is working for in terms of the 200 hours or the 3 months. When does the 200 hours actually kick in? It is not the responsibility of employer A to know exactly what employer B is doing. Keeping a record of the hours per se is not a problem, because wage records are kept. But one does not keep records of the hours worked in respect of other employment matters or issues, or for other employers. I think that it is somewhat unwieldy. Again, unwieldy and uncertain law is bad law. It is good for the lawyers but it is bad law.

In any employment relationship the last thing people want to have to do is resort to the tribunal, the authority, or the court procedures to try to work out exactly what this law is supposed to say. I believe that the bill is not particularly workable. The intent of the bill is fine. Let us avoid the exploitation of young people. If young people deserve a fair wage, then they should get a fair wage.

I rise to talk to clause 4 of the Minimum Wage (New Entrants) Amendment Bill. The previous speaker, Kate Wilkinson, referred to the Supplementary Order Paper, and I will not attempt to unravel the lawyer-speak that the member presented to us in that last speech. I think that is unnecessary, actually, because I think it is far simpler than she is saying.

The fundamental thing about this bill that perhaps some people have not understood is that we are talking about the minimum wage here. We are talking about a minimum wage. Maybe members opposite do not understand what the minimum wage is for. A minimum wage sets a floor below which no employer can pay. It is about having a socially acceptable minimum wage.

I heard the member Paula Bennett calling out to ask what unions are doing. Well, I think we have seen what unions can do, with the Progressive Enterprises settlement—and the Spotless settlement has, in fact, set a whole new benchmark of $14.25 an hour. That is what unions are able to do. This legislation is for workers who are vulnerable and who rely on this, but it was never intended to be the primary wage-fixing instrument. So let us just remember that, too.

I think the other thing we should remember is that we have come a long way, but, boy, did we have a long way to come! When Labour became the Government in 1999, 16 and 17-year-olds—and, indeed, 18, 19, and 20-year-olds—were being paid $4.20 an hour. That is shameful, absolutely shameful! The first thing Labour did was to lift the minimum wage for 18 to 20-year-olds. What is wrong with that? Now their pay is nearly three times what it was in 1999. The minimum wage for 16 and 17-year-olds has increased by more than 100 percent during the same period. What is wrong with that? That is fantastic.

We have provided legislation for other workers to have a minimum wage—for example, workers with disabilities. In a few weeks the House will be debating my member’s bill about dependent contractors being entitled to a minimum wage. What is wrong with that? What we are talking about is people getting paid socially acceptable minimum wages.

What is wonderful about this bill and about clause 4 is that thousands and thousands of 16 and 17-year-olds will get a pay increase after they have done 200 hours of work or have worked for 3 months, whichever is the lesser period. Again, I acknowledge Sue Bradford. She has done a wonderful job in bringing this issue to the House, and the parties who vote in support of this clause tonight will be making history. As I have said in a previous debate, it is world leading.

I say to the members of the Māori Party that I am a bit puzzled about why they would choose to make no progress at all, and to leave the current injustice in place so that 16 and 17-year-olds continue to get the youth minimum wage for 2 years, rather than to make progress. One of the things that I have understood for many years as a union negotiator is that if one asks for 10 percent and gets 8 percent, one does not say to the boss: “Sorry, that is not good enough. We will have nothing.” It is better to make progress, and that is what I think this bill does. A whole lot of workers out there are saying that this is a whole lot better than nothing, and that they are looking forward to getting a pay increase.

Supplementary Order Paper 137, which was moved by the Minister Ruth Dyson, locks in the adult wage for 16 and 17-year-olds. This means that a future Government, under the Minimum Wage Act, cannot go back to having a youth minimum wage, apart from the new entrant period. This is fantastic—unless, of course, a future Government changes the law; let us not let that happen.

Supplementary Order Paper 137 also locks in the provision that if a worker is supervising other workers, then the new entrant provision does not apply and the worker goes straight on to the adult minimum wage. That is fantastic. What is wrong with that?

The Supplementary Order Paper makes sure that where the new entrant provision applies, the worker gets 80 percent. At the moment there is no guarantee of that happening; the worker gets whatever the boss chooses to pay. So that locks it in, too.

As I have already mentioned, the new entrant provision applies for only 200 hours, which is 5 weeks for a full-time worker, or 3 months. It might be only an hour a week, but, hey, we have made a judgment on that, and we think that is fair, given the nature of the industries that are covered by the minimum wage or the youth minimum wage—the retail industry, the hospitality industry, and so on.

Once again, for the benefit of the Māori Party, this bill has nothing to do with probationary periods. This bill is amending a totally different Act of Parliament. It has nothing to do with Wayne Mapp’s bill, even though he keeps trying to bring it up—he has not really got over it. Thank you.

I would like to take just a brief call in order to make a few comments about Supplementary Order Paper 137 that has been proposed by the Minister the Hon Ruth Dyson. I do not think it is any secret to the Committee that the Green Party and I were not particularly happy with the bill as it was reported back from the Transport and Industrial Relations Committee—as I said in the House and as we stated in the minority report. However, we do support the latest Supplementary Order Paper from the Minister, and I would like to give some of the reasons for that.

First of all, the Supplementary Order Paper enshrines the decisions that were made by the select committee and that appear in the commentary on the bill. Secondly, the Supplementary Order Paper strengthens those decisions by adding a time-bound maximum of 3 months’ service as an alternative trigger to 200 hours for the period that new entrants are required to work before they move to a full minimum wage. This is really important, and that is what I am really pleased about, as a number of young people work only a few hours a week and it would have taken some of them up to 6 months, or even 9 months, before they could have moved to the full adult wage—it would have taken them as long as that to reach the 200 hours. That provision would have applied in a lot of workplaces, and any pretence that somehow it takes 6 months or 9 months to learn how to do a job, to be a new entrant in a job, is just ridiculous, and I am really glad that this progress has been made. Thirdly, and most important for me, the Supplementary Order Paper is strengthened by removing the power of any future Minister of Labour to again regulate across the board for discriminatory youth rates. I would like to congratulate the Government on taking that step.

These changes make a much better bill. They make a bill that is much closer to its original intent than that which came back from the select committee. That is why the Green Party is really happy to support this amendment and feels confident of making big progress with the bill today, and when it next comes back to the House for the third reading.

This Supplementary Order Paper and the bill as amended are an indication to employers and workers alike that across-the-board age-based discrimination has been removed from our Minimum Wage Act. It allows unions and employers to negotiate wages with certainty and not have to worry about a rogue firm gaining a competitive advantage through the hiring of low-cost young workers. I would like to thank the Minister Ruth Dyson again for drafting this Supplementary Order Paper, which now enables, at last, the Green Party to happily support the bill. I would also like to mention and thank Peter Brown and New Zealand First for agreeing to the changes in the Supplementary Order Paper. I know the member has been very involved in the select committee and the process of this bill going through the House. I thank him and his party for their support, and for making it the better bill that it has become today.

I have just been listening to the debate, and I felt somewhat—

💬 Nathan Guy: Moved.

Moved would be the word, yes. I was going to say “angered”, but moved will do. I felt moved to make a contribution to this debate because I can recall with great clarity the first debate we ever had about putting in place youth rates, and that was by way of a private member’s bill moved by Michael Laws and Nick Smith in 1994. So this debate has gone on over time. The issues that were apparent then are just as clear today, and I wish to draw attention to those issues.

The first point is that this bill says that the best way we can help people to get involved in the workforce and to get rewarded for what they are doing is to have the Government say what they are worth. And I would say that that is a flawed notion.

💬 David Benson-Pope: There were 161,000 people unemployed under that party.

The member who is making a great fuss on the other side of the Chamber needs to consider these issues. I absolutely agree that people should be paid what they are actually worth, but the history under this Government is that productivity in New Zealand has gone down, and by every measure we are worse off now, productivity-wise, which means that we are less able to compete in the world market and, ultimately, that there will be fewer opportunities for young people.

The question surrounding the minimum wage is whether there is a job opportunity, and whether we rule that out by setting the barrier of a wage that is too high. I give members this example. In the petrol station where I get my car filled with fuel, there used to be a person on the forecourt who filled up my car. But as soon as we put minimum wages up to a point that has an impact on the price of fuel, I will go and get my car filled up somewhere else where I can pump my own gas. So when we set the bar too high it becomes a disincentive for employment, because at the end of the day someone has to pay. So to think that we can resolve the situation of a low-wage economy—which I admit we have in New Zealand compared with all other countries, particularly those above us on the OECD list—by just putting wages up, can in actual fact work as a disincentive for employment. That is the first point.

The second point is that when we start to dictate what a minimum wage should be, and when that bar is too high, then that sends a false message and locks in dependency, because many young people think that that wage is as good as it can get. The moment young people step into a minimum wage, without education and without any incentive, they are locked into that for the rest of their lives.

I want to pick up on clause 4, because this is the part that really starts to concern me. Clause 4 will enshrine in law a delegated authority to set what the wage is. So by passing clause 4 today we are saying, by Order in Council, that somebody can set the wage.

💬 Darien Fenton: Haven’t you read the Minimum Wage Act?

My questions are—and I expect someone who is very vociferous on the other side of the Chamber to answer this—”What is the mechanism to be used by those people who make the recommendation to the Governor-General, and who are they?”. I have only just picked up this bill and had a cursory read of it. Is it the Minister of Labour? [Interruption] Well, someone can take a call and respond, because I believe that this is an issue we need to know about. What are not stipulated, in respect of this delegated authority, are the measures to be taken by the group, individual, or person making the recommendation for that minimum wage to be set and altered at any point, without the intervention of Parliament. What criteria will they consider when they are using that delegated authority to set the minimum wage? So I have some serious concerns that by passing clause 4 as it stands, we are locking in a mechanism whereby some people, who are not specified in the legislation, have a right at any time not determined in there—it could be twice a year or every 5 years; we do not know the specifics—

💬 Dave Hereora: Read the bill!

Well, someone can respond to that; I have had a quick look at it, as I say.

Let me just restate that this is not a case of helping young people by locking them into a situation. If we want young people to be incentivised, to be interested, and to be taking opportunities, then it is not a matter of encouraging them to lock themselves into a low and minimum wage.

The CHAIRPERSON (H V Ross Robertson): Before I call the next speaker, for the benefit of my learned colleagues on my right I tell them that I would like them to look at Speakers’ ruling 57/3. It was a favourite of former Deputy Speaker Geoff Braybrooke and it is becoming one of mine.

As we have heard from Sue Bradford, who has been the driving force behind the Minimum Wage (New Entrants) Amendment Bill—and it is good that she has had all the commendations from around the House; even from National members, who say it is a well-intentioned bill even if they do not support the content—the Green Party will be supporting this bill, this clause, and Supplementary Order Paper 137.

I would like to put to rest Kate Wilkinson’s idea that somehow this bill will stop employers from employing people who are not getting youth rates. In fact, I think a lot of the evidence she has provided argues the other way. As she pointed out, 85 percent of people at that age are not paid youth rates at present, and most of the people on youth rates are in either the retail or the fast-food industry. We have had Progressive Enterprises, a big chain, coming out and saying that it can quite easily do away with youth rates even for 15-year-olds, so I think the idea that any of these firms will go bust if they do not give the odd extra dollar to make up the full minimum rate for workers is not particularly apt. Doing away with youth rates is no great sacrifice for the employers, but they are a huge sacrifice for young people entering the workforce.

I think it is great the way Progressive Enterprises has come out and responded to the concerns of the general population, and of young people in particular, in the same way that their competitor Foodstuffs has come out recently and supported the labelling of fresh fruit, vegetables, and meat in supermarkets as a response to popular concern about that issue. The way that these companies are getting ahead of the play is fantastic.

There was a bit of an argument about people being paid $4 an hour and whether that is below what they should be paid on youth rates. I will not get into the particular argument or the figures, but I will say that young workers are often duped to some extent about what rate they are owed. The existence of youth rates makes it more difficult, because they know they will get a lesser rate as a result of these youth rates, and, anyhow, they are all a bit scared in their first time in employment. Often they do not want to talk back to the employer, and a lot of them are not unionised. Unite! and the National Distribution Union are gaining members in the industries that employ young people, but a lot of those young people are still not unionised. Unknowingly, they sometimes take a lower rate than they should have to legally. The very fact that we have clear legislation will give those young workers more confidence.

The move to complement the requirement of 200 hours’ work with a minimum 3-month period will help a lot of workers to work out where they stand too, because it might be a little hard for them to shuffle around bits of paper about how many hours they have done for this employer and for that employer, and add it up to 200. It will be a bit complicated, but hopefully they will be able to do it if they are getting their 200 hours up in less than 3 months. At least they can work back to the date that they started work and figure out when they qualify for the full rates, so it will be easier in that respect.

I think there was a misunderstanding over whether the requirement is 200 hours with one or more employers. I looked at the explanatory note on the back of Supplementary Order Paper 137, and it states that “employment” includes more than one employer. If we were to apply that explanatory note to the definition, then clearly it is employment with one or more employers.

Of course, the Greens would like this bill to go a little further. We are not really in favour of youth rates in any form for 16 and 17-year-olds, but this bill is a great step forward, and we will definitely be supporting it. Thank you.

I will start by acknowledging the sponsor of the bill, Sue Bradford. I thank her for her determination and her stubbornness on many occasions as she watched the bill go through its many iterations at select committee, in and out, and I thank her for her support for the Supplementary Order Paper that I am moving to amend clause 4, which we are debating at the moment. This is really the heart of the legislation: the prescription of the minimum wage.

I listened with great amusement—and that is the kindest adjective I can apply—to the contribution from the member from Southland, Eric Roy, who described the process of reviewing and setting the minimum wage in Sue Bradford’s bill and Supplementary Order Paper 137 as if it were new. Frankly, for the National Party, perhaps it is new, but it has been that way as a process in the Minimum Wage Act since 1983. What happened in the 9 years from 1990 to 1999 when there was a National Government in New Zealand was that National complied with the law, because all the law stated was that one had to review the minimum wage. It did not say one had to increase it, and that is why the previous National Government did not do so. For 9 years the adult minimum wage stayed at exactly the same rate, except for a pathetic increase of $1 an hour over the entire 9 years, and at that time young people were included right up to the age of 20.

The youth minimum wage, which is the point of this debate, applied to 16, 17, 18, and 19-year-olds. Under National, one did not become an adult until the age of 20 and, what is more, the youth rate was set at 60 percent of the adult rate, not the current 80 percent. So for that member to come in here and say that this is new is just nonsense. It is new to increase the youth minimum wage; that has been happening only in the last 8 years under a Labour-led Government. That is why the graph of the minimum wage looks like it does, with the blue numbers flat-lining and the red numbers going up. Sue Bradford’s bill will improve that situation even further.

I also commend the Transport and Industrial Relations Committee, because this legislation is not as easy as the original proposal. The idea that jobs should be paid according to their value is pretty straightforward, and I think that it is an excellent principle on which this bill was developed. But the submissions to the select committee raised a number of issues, including the main driver behind our consideration of the amendment, which was the socialisation skills that young people do not have. It is not skills for the job and it is not skills generally that training itself will fix, because we still have a training rate linked to skills—and the list member from Christchurch did not seem to indicate her understanding that we have a training rate that is skill-specific related. This is about socialisation, and that is all. Frankly, some of the contributions at the select committee would indicate that even the adults who made the submissions had not quite got to that stage in their presentations, either. So after hearing from the select committee and listening to what are quite complex submissions and debates, I proposed this amendment.

As I said earlier, I am really delighted that the proponent and sponsor of the bill, Sue Bradford, has urged her caucus colleagues in the Green Party to support it. I also acknowledge New Zealand First, the Māori Party, and United Future, which are also supporting it. [Interruption] Well, I thought United Future was going to support it.

💬 Darien Fenton: The Māori Party isn’t.

The Māori party is not supporting it? I cannot believe that those members would not support such a good step forward for young people. They still have time to change their minds, as the debate will go on for a little while yet. But the parties that are supporting the bill did so after a lot of careful thinking.

We do not want to send the message to young people that leaving school early with no qualifications is a good idea, and I do not think this bill will drive that message. Our increase in the youth minimum wage over the last year has shown a negligible impact on the number of young people who are leaving school early. In fact, if anything, this increase has allowed people to stay at school longer, because the part-time jobs are better paid and they are able to balance work and school without doing long hours. We do not want to send a message that it is OK to leave school too early with no qualifications.

I also want to just touch on the other spurious point that Eric Roy made in his contribution—I think Paula Bennett may have made passing reference to this, as well—which was about the possible impact on unemployment for young people that a higher wage would have. I cannot believe the short-term memory loss that has occurred in the National Party in the last 8 years. When National was last in Government, there were 161,000 people on the unemployment benefit, and that figure now is 20,000. There has been a drop in the rate of people on an unemployment benefit of 140,000 people, despite the fact that every single year we have increased the adult minimum wage, we have increased the youth rate, we have increased the percentage of the adult rate that the youth rate has attached to it, and we have also made sure that people at 18 years of age receive the adult rate.

With all those changes, we have had a decrease of over 140,000 people on an unemployment benefit.

💬 David Benson-Pope: Tell us about the young people.

My colleague asks about the young people. Well, I just happen to have that information. When National was last in Government there were 17,500 18 and 19-year-olds on the unemployment benefit, despite the fact that the youth rate was so low that a person could have employed 20 people in any business and it would hardly have made a little bump in his or her wage bill. The youth rates were a pittance. What is that figure now? The rate of 18 and 19-year-olds on an unemployment benefit in our country now is 1,000 people. Those are the statistics that National should think about before it comes into this Chamber and raises spurious arguments in opposition to improving the way that 16 and 17-year-olds are recognised through their wage packet.

In conclusion, I acknowledge that this bill does not go as far as the sponsor of the bill and the Green Party originally intended. That is one of the things that happens when we are in a Parliament that comprises a number of parties. If we have a day when the Green Party is a majority Government, it will be able to go ahead with exactly what its members want, without any debate, discussion, or, perhaps, compromise with other parties. But I seem to recall that the Green Party was a strong supporter of proportional representation; certainly, my colleague Rod Donald was, as co-leader of the Greens. This is one of the results of proportional representation. We have to work with other parties and we have to make some compromises. We cannot just bowl ahead and do what we want.

I am pleased that we have been able to reach a position that is supported by the sponsor of the bill, because this bill is done for the betterment of young people so that the contribution they make in paid work is properly valued. The amendment applies to all employment, regardless of whether it is the first, second, third, or fourth job. I am glad that other members read the full Supplementary Order Paper rather than following Kate Wilkinson’s very shallow example of not even reading it. Lawyers should read the legislation before they make a contribution in Parliament; it is very damaging to one’s reputation if one does not do that. It is very clear that the legislation applies to all paid employment of 16 and 17-year-olds. It includes employment undertaken before the commencement of the Act. It does not include employment for those under 16 years of age. That is a debate for the future, I am sure.

In my view, this legislation is a huge step forward for 16 and 17-year-olds. It recognises the primary valid concern of employers that some period of socialisation be required. This period is almost a transition between school and a paid job. Perhaps the 200 hours was too much—it was only 5 weeks in a full-time job—but we have reached a position now where 200 hours or 3 months applies, whichever is the shorter across all employment. That period can obviously commence prior to the implementation of the Act. There will be a huge wage increase for people, and that recognises the value of the work they are doing. Many of them are doing exactly the same work as people who are older and who are getting paid more.

I also acknowledge the contribution from Business New Zealand. The point it raised in the Transport and Industrial Relations Committee is also reflected in this Supplementary Order Paper, and indeed in the bill as reported back from the select committee. Business New Zealand was not supportive of the bill, but it did say that anyone supervising somebody should be paid at the adult rate. This legislation achieves that, as well.

Tēnā koe, Mr Chairman. Tēnā tātou katoa e hui nei ki te kōrero i te pire nei. I want to make the stance of the Māori Party very clear. All members somewhere in their speeches on this legislation have said they believe in the principle of equal pay for the job done, yet here we are with a bill that does not supply that. Why have we not got the guts to go the whole hog? That is the point.

The Māori Party went up and down the county in support of repealing section 59 of the Crimes Act. The principle of repealing section 59 was to give children the same status as adults—in other words, to end discrimination against children. Why should there be a defence for an assault on a child that cannot be used for an assault on an adult? The same thing applies here. Why can we not go the whole hog and say that we do not agree with differential wages for 16 and 17-year-olds without having to invent something like new entrants kōrero?

Although the Supplementary Order Paper is an improvement on the bill, in that workers now qualify for the adult minimum wage if they work for 200 hours or 3 months, whichever is the sooner, it still does not satisfy the Māori Party position of opposing discrimination. Our kaupapa and our tikanga, the resourcing of whānau, and the promotion of rangatahi [Interruption]—if members listen carefully—are values that are very important to Māori. We Māori are also the ones who have a lot of our population in the youth area, and what sort of message are we giving young people by saying they are worth less? What sort of work ethic are we supporting? What are the inside messages that we are sending to young people by saying to them that they should start at this lower rate?

The concept of a new entrant into the workforce does not sit with that entrant being of age 16 or 17, either. It could be that someone who is 20, 41, or 51 is entering into a new work area. Many Māori are employed in areas such as shearing sheds, the road, and a lot of manual jobs. They do not need a new entrants supervisor or skills to swing a shovel or to use a handpiece—well, they need a bit of practice for the handpiece, but to throw a fleece—

💬 Eric Roy: How many a day do you do?

All of those, bro—200 a day. I am just saying—

💬 Eric Roy: You understand.

Yes, that is right. So despite the heckling and the support, I say that that is the reason why we are opposing the bill: it is the whole thing or nothing. It is about discrimination, and this bill still discriminates. Kia ora.

My honourable colleague from the Māori Party has raised a very interesting question. Let me make it quite clear that New Zealand First supports this bill, and all the amendments under the Supplementary Order Paper that the Minister has brought to the Committee. We think that this legislation is a way forward. We recognise that many employers in this country are now sympathetic to the cause, and we want to be behind them.

But the co-leader of the Māori Party, Pita Sharples—for whom I have a great deal of respect, I might add—raised an interesting question: why do we not go the whole hog? Let me answer that by saying that there are employers in this country who have some fears. It is not just a case of employing person A and person B to do the same job when one is lifestyle-experienced and the other is new. There are other qualities that employers have to take into consideration. It is not just about a measure of competence; it is about a measure of attitude and commitment. Older people tend to have a greater commitment to the employer and to the company. It is about a measure of lifestyle. Younger people tend to live for their pleasures, dare I say it—and actually some older people do, too. I have to clarify that. But younger people tend to give priority to after-hours activity as against working-hours activity, and they get the balance wrong. And—I have to say this with some concern—younger people are not necessarily as reliable as older people.

💬 Hone Harawira: No, no.

That is true. The “William Wilberforce of the South Pacific” is challenging me.

New Zealand First is supportive of this compromise position, but if anybody has changed tonight, I have to say it is the Green Party. My breath was taken away when Sue Bradford offered some compliments to New Zealand First. They were deserved, because I think it is fair to say that we have put a lot of background effort into this bill, and I thank the member for recognising that. But last week when the bill came before the House, I heard her colleague Keith Locke describe it as a rotten compromise. By jingo, I have to say that that got up my nose, with the amount of work that has gone into this bill. It has turned from a rotten compromise to a reasonable thing, which the proposer of the bill now applauds.

At the Transport and Industrial Relations Committee we heard from a number of young people, and they put their case exceedingly well. Two young women in particular came before the select committee, independently, and they made a great impression on me—not because of their looks; well, in part because of their looks. They told us they were in supervisory roles, one in a cinema and one in a hotel. There were people coming to work in those establishments who were a good deal older and who knew nothing about what was required, and what have you, and these young people, on the youth minimum wage, were training those older people. That is absolutely and totally wrong. An employer with any nous would have said: “Look, I’m paying you more for what you are doing.” I have no doubt from the way these people put their case across that they were telling us the absolute truth.

It is good to know that many employers—Kate Wilkinson told us it was 85 percent of employers—in this country are supportive of this type of legislation. That is good to know. I say to the National Party that it should get on side with the majority of New Zealanders. They should think about it, if 85 percent of employers are supportive. But in particular I want to say to my colleagues in the Māori Party that, for goodness’ sake, they should not oppose a bill because they have got their knickers in a twist.

💬 Hon Members: Oh!

That is what it amounts to. They are saying: “We don’t get everything we want, so we’re going to oppose it.” And this is the party that went to solve the problems of Australia.

I would like to add a contribution to this debate tonight. I start by responding to Minister Dyson’s comments about the changes in unemployment rates across the country since the Labour Government’s rise to power in this country, particularly her claim that amongst 18 and 19-year-olds there has been a drop of 17,500 in unemployment, and also that altogether there has been a reduction of 140,000 people in unemployment. It was an interesting point that was made because Labour members always say they are responsible for that drop in unemployment. How they make that out, I am not too sure. Did the Labour Government employ those people?

💬 Sue Moroney: Labour is responsible for the drop in unemployment. National raised unemployment.

Labour is responsible for the drop in unemployment? Employers are responsible for the drop in unemployment—employers—and that is where this Government does not understand business at all. The people who are responsible for the drop in unemployment in this country are employers. We see the same situation with a conservative Government in Australia. There has been a significant drop in unemployment over there over the same time because of employers. I ask those members to name me one thing that this Government has done in the last 6 years—

The CHAIRPERSON (H V Ross Robertson): Order! It is Wednesday evening; I am aware of that.

—that has—

💬 Peter Brown: I raise a point of order, Mr Chairperson. I do not want to interrupt the member’s speech. He is making some very good points. But I wonder whether he would take a question. Would the Government have been responsible—

The CHAIRPERSON (H V Ross Robertson): No, no. The member is perfectly entitled to ask the member on his feet to yield, but that is up to the member himself. It is not a point of order.

The decisions around employment are made by employers and are largely driven by the economic circumstances that they find their businesses in. That is what drives unemployment. Let us take the comment about the drop in unemployment among 18 and 19-year-olds. I will give the Labour Government some credit for the drop in unemployment. The credit goes to Labour because of the rise in bureaucracy in this country—I will give them that one.

The $20 billion increase in Government expenditure since 1999—$20 billion—has resulted in some employment that they can take some credit for. But tell me, how many of those 18 and 19-year-olds has the Government employed? How many 18 and 19-year-olds have been employed by the bureaucracy? How many nurses aged 18 and 19 have been employed? How many doctors aged 18 and 19 have been employed? How many analysts at the Ministry of Economic Development are 18 and 19-year-olds? How many analysts at the Department of Statistics are 18 and 19-year-olds? Not one. So the reduction of 17,500 in unemployment has nothing to do with the $20 billion increase in spending by the Government and it has everything to do with employers in this country who have driven unemployment down.

What policies have been put in place to help the unemployment rate? Here we see a bill—not a Labour bill but a Green bill—aimed at increasing the youth rate. I turn to clause 4, “Prescription of minimum wages”, and you will be pleased, Mr Chairman, that I am getting back to that part of the bill. Section 1, in clause 4, states: “The Governor-General may, by Order in Council, prescribe the minimum rate …”. Now, how is the prescription of a minimum rate going to reduce the unemployment rate of 18 and 19-year-olds? It will not make one iota of difference, because for 18 and 19-year-olds and 16 and 17-year-olds employment is all about employers who give them a job.

I want to finish my speech tonight by talking about McDonalds Supermarket, an employer in Taradale. I ask the Green members how clause 4, “Prescription of minimum wages”, will help that employer employ more 16 and 17-year-olds. That employer has helped to increase employment in this country. It has employed 16 and 17-year-olds, and it has given them a work ethic that they can take with them throughout their lives, based on a wage that that supermarket can afford. I was one of the guys who was lucky enough to get a job in that supermarket early in my career, and that gave me a work ethic. Over many, many years employers such as that company have employed young people, given them a start, and given them a future.

At this point of the debate, in the Committee stage, we are really getting to the crux of the Minimum Wage (New Entrants) Amendment Bill. I think that the member who has just resumed his seat should perhaps cross the floor, because, in fact, he argued against his own party’s position. His colleagues were maintaining that increasing the minimum rate for 16 and 17-year-olds would affect employment figures. That member did a good job of convincing—I hope—his colleagues, and certainly the rest of the Committee, that the evidence is there: increasing the minimum rate does not affect the employment rate or the unemployment rate. That is not what this bill is about.

This bill is not about affecting employment or unemployment rates; this bill is about getting a level playing field for 16 and 17-year-olds. When 16 and 17-year-olds are contributing in a workplace to the same level as any other person, irrespective of what their age may be, they will not be discriminated against by virtue of the Minimum Wage Act. That is what this bill is about.

I think that the member who just resumed his seat completely missed that point. He thought he was coming down here to debate who had done better in terms of unemployment rates—National or Labour. I do not think we need to debate that. I think everyone in the country is absolutely aware that under Labour—under its policy settings, under its support for business, under its support for workers, and under all the policies that it has brought in—there is no doubt that unemployment has fallen dramatically and drastically.

This bill is really putting the cat among the pigeons, and not just for the National Party. The National Party is really exposing its hand here. Its members have campaigned in the past on the issue of being worried about low pay in this country, and worried about New Zealanders who take their skills and fortunes over to places like Australia. They talk about that regularly and routinely. But when they get an opportunity to do something in this House to improve low pay in this country, what do they do? We can check their voting record. Every single time they get an opportunity to improve low pay in a structural way they vote against it. That is what the record of National is. So next time those members roll that little bumper sticker slogan out at election time, check the voting record.

I will move on and respond to the Māori Party position. Hone Harawira earlier in this debate talked about the very experienced union people on this side of the Chamber and made some observations. Thank goodness that the Māori Party is not a union responsible for taking wage claims forward. At this point in the debate the Māori Party members are saying—and my colleague Darien Fenton used this example before, as well—that if a union goes to an employer for a claim for a 10 percent wage increase and the employer says: “Well, good argument folks, but we can’t quite do that. We’ll give you 8 percent instead.”, the Māori Party, if it were the union, would say: “No thanks very much. We’ll take nothing; we’ll take zero.” That is the position that the Māori Party is taking at present.

I think that the Māori Party is probably standing on principle, but it is not thinking about the practicalities of this. The impact of voting against this Supplementary Order Paper is the maintenance of the status quo. The status quo means that 17 and 18-year-olds will not get this increase in the minimum wage until their 18th birthday. This Supplementary Order Paper makes significantly more progress than that.

I know that Paula Bennett sneers at people who work as stable hands, and people who live in small towns, but I want to use the example of many young people in an industry that I am familiar with who work as stable hands in the horse racing industry. Supplementary Order Paper 137 states that after 200 hours of employment 16 and 17-year-olds will receive the adult rate. That will take about 4 weeks of working in a horse racing stable for a 16-year-old—they generally work about 50 hours a week—to be on the adult rate. That is the sort of improvement that has been proposed here. The Māori Party would have that 16-year-old wait 2 years and not get the adult minimum rate until 18. I really encourage that party to think about the practicalities of the position it is putting forward on that basis. This is good progress, it is world leading.

The previous speaker can stand up and make allegations about what I have and have not said, and she can say that I wish to see people in some regions being paid lower wages and that I do not care about people who work in stables and places like that. If that rings a bell at that particular time, then that is fine.

But let us take something that the Minister Ruth Dyson said on 25 July. She said that we need to balance the positive impact that abolishing the lower rate of pay for 16 and 17-year-olds will have for thousands of workers against the possible negative impact of giving those 16 and 17-year-olds an incentive to leave school early with fewer qualifications. The Minister has introduced this Supplementary Order Paper 137 because the Government has concerns that there may be a possible negative impact because of that incentive.

The member who spoke before me stood up and said, correctly, that within 4 weeks those young people will be on the adult minimum wage. How will 4 weeks counter that negative impact, and stop them leaving school early? The Minister herself has identified it as an issue. She said that the Government has concerns about young people having an incentive to leave school early without full qualifications, yet it admits that 200 hours can be done in 4 weeks. As such, a slightly lower wage for 1 month will not be the disincentive that Labour hopes it is.

Let us also take a comment made by the member who spoke before me, who has since disappeared.

The CHAIRPERSON (H V Ross Robertson): Order!

Sorry, Mr Chairperson. If I had had the call and been able to respond to that member when she spoke earlier in this debate and talked about young people being on wages of $4.20 and $5 an hour, then I would have pointed out that that is illegal. Those employers are breaking the law now. This Government is to put in another law and thinks that all of a sudden it will fix it. The Government thinks that if it puts in another law, employers who are breaking the law and not paying the bare minimum wage now will think: “Gosh, golly, me! I had better obey the law.” No! We should stick with what the law is now and fix those people who are breaking it. The Government should come down hard and fast on them because people in this country have rights.

If the unions cannot stand up and make a difference, then perhaps they need to take a hard look at themselves and their values. We have heard about Progressive Enterprises. The Greens spoke about the agreement between Progressive Enterprises and the unions earlier, and I say: “Good on them.” Actually there is no one here who would not say: “Good on them.” Good on Progressive Enterprises, and good on the unions, for putting a case forward, having it listened to, and then looking at their books and working out whether they could afford it.

We can look at small businesses. One can try to turn it into a regional argument and say that Opposition members do not care, but that is not true. If those small businesses are not in business, then the people they employ will not have jobs. Then the only choice those young people would have would be at supermarkets and in chain jobs that go in and out, and they would not have these other opportunities.

The member who spoke before talked about stable hands and the racing industry, which is quite often known for paying the minimum rate for young people when they first come in. It is a time for them to get in and show their worth. It is a time for them to muck in, and for them to pick up that shovel and do the sort of dirty work that shows whether they have the mettle to make it in the long term, because the job ain’t going to get any easier. In fact, the job will probably get tougher at times and they will have to have the backbone to put up with it. Those employers let those kids in, they let in more kids than they can afford, and often they pay them the minimum wage to start with. But they give them a shot, and when they have proved themselves, they pay them more.

Let us talk about some of those young people who get the minimum wage and who get bonuses. Those small businesses turn around and, when things are going well for them, they give their staff the cash. We can give many, many examples of small businesses that turn around and, when things are going a bit better, that is the first thing they do. They put their hand in their own pockets and they give that cash to their staff. They turn around and give Christmas bonuses; they give a little bit more. They give it back.

But if the Labour Government keeps going at them, keeps loading on the compliance costs, and decides to keep burdening our small businesses with compliance costs and regulations in the way that it does, then it will make it so tough for those businesses to keep going that they will not do so, and those jobs will no longer be there. That has to be of huge concern, and not just to members on this side of the Chamber.

Surely, there should be some recognition for those people who go out there, who take the risks, and who take those young people on because they want to give them a shot. They do that because at the end of the day they know that it will show the mettle of those young people. They will end up being rewarded at a rate that is way above minimum rates, and the businesses will get something back for it. That is important, and that is really what shows.

I want to raise one issue with the honourable member, Sue Bradford. It is about paper girls and boys, and those who go out on deliveries. I know that this issue is not completely covered in this bill, but it is obviously a related issue. I personally want to put a pitch in because, as a mother whose daughter went out and did deliveries into letterboxes, I think that they should be paid at least double, if not triple, what they are paid. I also think that money should go to their parents, who end up doing the deliveries most weeks.

At the end of the day, it is actually the parents who end up doing deliveries out there, and I thought that if ever there was a case for something, then this is it. I would quite like a petrol voucher or to be paid for the number of streets I have walked up and down, delivering those brochures on behalf of my dear daughter, who thought it would be a great thing, to start off with, but who very quickly decided it was not quite the job she thought it would be.

Let us finish on a couple of things. One of them is Supplementary Order Paper 137, which talks about the requirement to have worked 200 hours or to have worked 3 months. I would tell Mr Williamson to take note of this—and I congratulate the honourable member sitting next to me on having been 20 years in this House. Today he is celebrating having been in this House for 20 years.

💬 Hon Member: How many hours has he done?

💬 Hone Harawira: Less than 3,000.

He is only 38; it has been quite a ride for him.

Let us just make the point about those businesses that need a break. Those businesses are doing the best they can, and they will reward their workers as soon as they can—and fairly. Let us make the point that 85 percent of the people in those businesses are paid above the minimum wage, and we need to correct some of the misinformation has been going through this Committee today.

Those 16 or 17-year-olds who are paid $4.20 or $5 an hour have bosses or employers who are breaking the law. We on this side of the Chamber would be coming down hard and fast on them, and we would be making no apologies for them—no apologies, at all. It people are breaking the law, there are laws for us to go in hard. But those businesses that are not breaking the law need some sort of understanding and they need that break. This Government can continue to put more and more legislation on them, but at the end of the day it will not have the results it needs.

I stand here easily before the Committee and say there is no way—[Interruption] Oh, get into the year 2007, people—get into the year 2007! Labour members should move on, move on. I know that they are still living in yesterday and just want to blame what is happening now on what happened in 1997 or in 1995. That is 12 years ago, people, 12 years ago. Those members should get into the year 2007 and see what is really happening in today’s world. Then maybe—maybe—there might actually be a game on. Thank you.

The question was put that the amendment set out on Supplementary Order Paper 137 in the name of the Hon Ruth Dyson to new section 4(1)(a) in clause 4 be agreed to.

I raise a point of order, Mr Chairperson. I wonder whether you can give me some guidance on this. My understanding of the way that the Standing Orders work is that when a member’s bill is going through this House, then anybody else can put amendments to it, but that person must be putting them forward as a member of the House. So it should be that Ruth Dyson is putting amendments forward as a member. You have been calling these amendments in the name of the honourable Minister, Mr Chairperson, and I do not believe that a Minister can, in the form of a Minister, be putting amendments to a member’s bill. It must be in the form of the Hon Ruth Dyson as a member of this House. I would like some clarification.

The CHAIRPERSON (H V Ross Robertson): I thank the member for that, and he is absolutely right. The member is putting the amendments through but, as I understand it, not as the Minister. The Minister is not in charge of the bill.

The question was put that the amendment set out on Supplementary Order Paper 137 in the name of the Hon Ruth Dyson to new section 4(4) in clause 4 be agreed to.