Minimum Wage and Remuneration Amendment Bill

I take great pleasure in rising to speak to Part 1 of the Minimum Wage and Remuneration Amendment Bill, a member’s bill in the name of Darien Fenton. National will be opposing the Committee stage of this bill, which, of course, includes Part 1. I note that there have been changes—in fact, extensive changes—to the original bill as tabled in 2006 in the last Parliament, including changes to Part 1. Three successive Supplementary Order Papers have been tabled, which hardly inspires the view that the bill was originally drafted in a very robust way at all.

The purpose of this bill as introduced was to amend the Minimum Wage Act 1983 by extending its provisions to apply to payments under a contract for services that are currently remunerated at a level below the minimum wage. I was not a member of the Transport and Industrial Relations Committee, which heard the bill in the last Parliament. When I read the select committee’s report it was evident to me that there was no clear consensus and that members were unable to reach agreement on the purpose of this bill. The purpose as stated in Part 1 is still the subject of amendments in the recently tabled Supplementary Order Paper 4.

The select committee received 28 submissions from interested groups and individuals, and heard 14 submissions. This included commentary on the purpose of the bill. This bill was well scrutinised by the select committee and came back with the recommendation that it should not go ahead. That is the right decision.

The make-up of the select committee included MPs from Labour and National and one New Zealand First MP. The select committee report as such comprised three different views from each party. There was no consensus and no common ground, and for the bill to have stalled at this stage with not a shred of common ground means that it was deeply flawed to begin with. That is the only conclusion I can reach from reading the report. Even the New Zealand First member did not agree with the purpose of the bill. That party’s view in the select committee report stated: “… the bill creates too many administrative grey areas which would have the potential to lead to confusion.” The last thing this Parliament should do is to pass unnecessary and confusing legislation for the sake of passing legislation.

I note that in an amendment to Part 1 in Supplementary Order Paper 4, which was tabled only yesterday—3 March—the commencement date has been amended to 1 April 2009. That is very wishful thinking, indeed.

The Government will be opposing this bill. We do not see it as being helpful in the current economic situation, and it is so flawed that even at the select committee level no common ground could be found. There have been numerous amendments, including those noted to the commencement date and the purpose of the bill in Part 1. National remains concerned about this bill on a number of different levels. We are not convinced there is a need for this legislation and we also believe it would create substantial problems through its implementation. The Supplementary Order Paper that was introduced yesterday, which amended Part 1 as well as other parts, was in essence a complete rewrite of the original bill, which does not give any confidence in the robustness of the bill at all.

As well as the changes to Part 1, I note that the bill has been amended to include a provision that would see the minimum wage rise to $13 this year, to $14 next year, and to $15 the year after. There is a certain irony here. Labour’s record on the minimum wage is inconsistent. Before the election its policy related to average wages and average prices. Now Labour members want to raise the minimum wage to $15. We are in unprecedented tough times. They knew that this was unaffordable policy and that it would ultimately cost New Zealanders their jobs, and it negates the purpose as set out in Part 1.

On 1 April this Government will be increasing the minimum wage from $12 an hour to $12.50, in line with the Consumers Price Index. The minimum wages for those in training and for new entrants will increase also, from $9.60 an hour to $10. The Government felt that in the current recession, when it needed to find a balance between protecting jobs and ensuring fair pay to workers, that was the right thing to do. We found a balance. The Government does not want to see workers priced out of the market during these difficult times, but it is confident that the increase in line with inflation will not harm businesses. We will not be supporting Part 1.

It is a great pleasure to have a members’ day; it is the first of the new Parliament. They have been few and far between, so it is really, really good.

I assure the members on the opposite side of the Chamber that they have some learning and catching up to do on the Minimum Wage and Remuneration Amendment Bill. As a new member I adopted this bill in 2005. I took it over from the Hon David Parker, who became a Minister at that time. After it came out of the ballot it was introduced in July 2006 and had its first reading in August 2006. The Transport and Industrial Relations Committee considered it at length and reported back more than a year later. If Jackie Blue had read the select committee report properly she would have seen that the votes were tied: the Labour members supported the bill and the National members did not, so the numbers were tied. The bill had its second reading in May 2008. I introduced a Supplementary Order Paper that contained the majority of the amendments to the bill that are being considered today. Supplementary Order Paper 4, which has been introduced this week, has only a very, very small number of new amendments; the rest of it has been under consideration for nearly a year.

A lot of work has gone into this bill. The select committee members worked hard on it, apart from the National members, who started with an ideological position against it. They said that we should not interfere with the commercial relationship with contractors and that people have the free choice to work for very little if they want to. Talking on the purpose clause of the bill, in Part 1, I say that it is based on a very simple principle, which all the submitters to the select committee agreed is right: no worker in New Zealand—no matter what their employment status—should be paid less than a socially acceptable minimum wage. I want to hear whether the members on the opposite side—the Government members—agree with that.

The bill began with the issue of leaflet deliverers. Some of their stories are horrific. Leaflet deliverers are usually kids, but also these days they are the elderly, the unemployed, or low-income workers who are trying to get extra income. Companies sign them up as independent contractors and pay them per delivery. The pay equates to around $1 for 100 leaflets for the first leaflet, and 50c per 100 for each additional pamphlet. Sometimes there can be up to 14 different pamphlets in a day. That means that deliverers can spend hours and days delivering all of those leaflets for a pittance. I am sure that some were the National Party leaflets from the previous election. Those workers get no holiday pay, no sick pay, and no other rights, so if the worker falls ill and cannot deliver the leaflets, someone else has to do it for him or her, otherwise the worker can be fired for breach of contract. What redress do such workers have? They have none. They could perhaps go to the small claims tribunal or maybe take up a legal case as an independent contractor. I am really surprised that any member of this Committee thinks that that is an acceptable situation, and is not supporting every effort to do something about it.

Since the bill was introduced—as I said, it started with the issue of leaflet deliverers—many workers who are called either self-employed or independent contractors in a wide variety of occupations and industries have been in contact with me, and came forward to the select committee to talk about their situations. The Supplementary Order Paper outlines some of those groups of workers: fast-food delivery workers—the ones who bring pizzas to our homes when we do not have time to cook dinner—truck drivers, couriers, construction workers, caregivers, home-care workers, security guards, cleaners, telemarketing workers, forestry workers, and even the actors and musicians who work in our much-prized arts industry. They all have the same story to tell. Those workers are behind this bill. I have specific support from each group of workers in those industries.

These workers are being subjected to exploitative working conditions because under our current laws they are not considered employees and therefore have no rights. They have none of the basic protections, including entitlement to the minimum wage. That means they can be paid as little as nothing. Going back to the leaflet deliverers, I tell members that some of them are getting paid 25c an hour. I have come across workers on $4 an hour. I have come across the whole nine yards of exploitation. This whole notion is based on a premise that parties to this sort of contract are treated equally and that they are on an equal footing with each other, and the implication of that is that they are equal parties in the relationship. But there is no recognition in law that a worker trying to negotiate from a position of relative or complete powerlessness should have any rights.

For too many workers there is no choice. They have to accept it. Although some workers decide to work for themselves as independent contractors, many do not—they are not given a choice. For these types of workers it is a jungle out there. We are talking about the law of the jungle, and it seems to me that National thinks it is all right.

💬 Chris Tremain: It’s called an independent contract.

No, it is not, because they do not have union rights. Why does the member not understand? He should read the bill.

💬 Chris Tremain: You tell me a small business has union rights.

I am sorry, but we are not talking about small business; we are talking about individual workers. It will only get worse because in this economic climate more and more vulnerable workers will be in this category as jobs become more insecure and workers resort to self-employment or contracting out in a desperate search for work.

💬 Paul Quinn: Why don’t you give up your job here and let someone else come in?

I wish the member over there would listen; he might learn something.

I also believe that more employers will take up this option and move their workers to subcontracting arrangements to avoid the costs of employee rights as they seek to cut costs such as holiday pay, public holidays, sickness and bereavement leave, and KiwiSaver contributions. Whether or not the members like it, the problem is already here in New Zealand and it has the potential to grow if we do nothing about it. It can be taken to ludicrous extremes, as it has been in many other countries, or we could do something about it—if Parliament has the will. That is what this bill endeavours to do. It tries to something about it. It extends protections to workers within the labour market who have no protections to receive the minimum wage, and it will reduce the temptation for undesirable workplace practices by reducing the incentive on employers to alter their existing work arrangements to contracting in order to avoid paying the minimum wage and other employer obligations.

We in Labour take this seriously. I am proud that we do. We do not think it is fair that any worker in this country should be required to work for anything less than a socially acceptable minimum wage. But National thinks that is OK. It does not care if mums and dads lose their jobs in the recession, as many will, and are forced to contract themselves under this sort of arrangement for $4 an hour. Thank you.

I appreciate the opportunity to speak on the purpose of the Minimum Wage and Remuneration Amendment Bill, which amends the Minimum Wage Act 1983. I think that the bill, sadly, is misnamed. Having listened to the member in charge of the bill, Darien Fenton, try to justify what, frankly, is unjustifiable, I am even further convinced that this bill would be more honestly entitled the “Interference in the Lives of Ordinary New Zealanders Bill” or the “Let us Restrict the Ability of Some New Zealanders to Get Work Bill”. That is what this bill is all about. If members had listened carefully to the justification given by the member in charge of the bill—

💬 Hon David Parker: Don’t you believe in the minimum wage?

Listening to the interjections from members opposite, I wonder whether they might like to reflect on why the Labour Party and those who advocate and support it seem totally bent on denying some New Zealanders the opportunity to work. We live in some of the most difficult employment conditions in a couple of generations, largely caused by the failure of the previous Labour Government over 9 years in office. Now Labour wants to put through legislation that will further screw down the opportunities of people looking for work to enter into an agreement that has been freely arranged and openly agreed between somebody who wants a job done and somebody who is looking for a job. Let us not be under any illusions: that is what this bill is about—regulate and then regulate some more.

Why are Labour Party members opposite, who claim to care so much about workers, so bent on interfering with the goodwill in relationships between people? When we talk about the purpose of this bill let us remember that those members are not talking about spending their own money—and that was the case when they were profligate in the spending of taxpayers’ money for 9 long years.

I would have thought, frankly, that the Labour Party would get the message from the electorate and withdraw any legislation like this that it still has in its name. The electorate has made it abundantly clear that it does not want this sort of interference in people’s lives.

It will not be lost on the electorate—and people are listening to this debate—that the party that increased the minimum wage is on this side of the Chamber. Boy, that must really hurt the Labour members! The increase in the minimum wage came from this side of the Chamber. Now that Labour members are in Opposition, they want to spend other people’s money. What is it—$13 an hour, $14 an hour, $15 an hour? When will that party get realistic about the desperate need of many New Zealanders for employment?

Any legislation like this that involves spending other people’s money costs New Zealanders the opportunity to work, and that is the true purpose of this bill. The true purpose of this bill is to cost some New Zealanders the opportunity to work. The other purpose of the bill, of course—beyond regulating and then regulating some more—is to spend other people’s money. What is it about members opposite that they have not got the message that New Zealanders are fed up with left-wing Governments that want to spend other people’s money?

I have to record that the previous speaker was Allan Peachey from the National Party—

💬 Hon Member: The ACT Party.

I thought he was a National Party member. He pretends to be in favour of the minimum wage, but he supports back routes around it.

Why do people work? They work to make a living. That is why we have a minimum wage, so that people can live off their earnings; that they are not slaves; that they are not indentured for life; that they can earn enough from their labour to live off. That is why we have a minimum wage. But there is a glaring anomaly in our law at the moment, because there is a route around the minimum wage. That is what the Minimum Wage and Remuneration Amendment Bill attempts to remedy.

I congratulate Darien Fenton on advancing this bill, because there has been a hole in our legislation for many years. It is a loophole that was not abused much in the old days, but is abused more and more these days. It is a bigger problem now than it was 10 years ago. The evil that is being remedied through this legislation is the ability of an employer to pay someone a dollar or two an hour, when the minimum wage is what now?

💬 Hon Ruth Dyson: $12.

Well, it was $7 an hour under the last National Government. What is it now?

💬 Lynne Pillay: $12.50.

It was over $12 an hour when we left office, and it has been increased just a little bit by the current National Government. But one can tell that Government members do not believe in it, because they are happy to leave loopholes. They are happy to let people be employed under a contract for service, rather than through an employment relationship, and not be paid the minimum wage. That is all this legislation does. It does not give people holiday pay. It does not give them the protections from unfair dismissal that employees have after 90 days. It does not give them sick pay. It does not give them maternity leave. What it does is give them the minimum wage equivalent—only the equivalent. It is not the $100,000 - plus a year that Mr Peachey is on, but people would get $15 an hour instead of $2 or $5 an hour.

💬 Paul Quinn: Are you giving to the poor? How much did you give to the Home of Compassion last year?

Listen to that diversion. I am actually one of those who think that people should give to charity and I stand on my conscience because I do. I also stand on my conscience because I am happy to pay the minimum wage, and I am a business person. The National members opposite say we do not have any business people on this side of the Chamber, but I tell them that I was a business person. We have plenty of business people over here. I was always happy to pay the minimum wage. I never got around it through a contract of service, and I never will.

Who suffers? I will give an example of who suffers. The Dominion Post has to pay its staff the minimum wage, and it competes against the providers of advertising pamphlets who deliver them through people who are not being paid the minimum wage. How is that fair to the Dominion Post, or the New Zealand Herald, or any other newspaper in New Zealand? It is not fair. Members opposite say that only children are being affected. This issue came to my notice because I had a constituent who came to see me. She made her living delivering pamphlets, and a large number of adults are in that situation. A large number of adults who work as cleaners are now employed on contracts of service, and they are not paid the minimum wage. They are not paid the minimum wage because there is a gap in our law that allows some unscrupulous employers to avoid the intent of the legislation and pay people a pittance, which they cannot live off. That is not fair to businesses that pay the minimum wage. They are disadvantaged from competition by unscrupulous employers who employ under a contract of service and do not pay the minimum wage. It is especially unfair to the people who cannot live off the pittance that they are paid.

It is absolutely shameful that the National Government will not support this bill. Those members pretend to be in favour of the minimum wage, but they are happy to see it so easily avoided. This is very simple legislation to understand and should be supported by all members of the House.

Before I call the next speaker I say that I have heard quite a string of interjections involving “you”. The Chair should not be brought into this debate. Let us be cautious about that. Members might want to reflect on that point. Members can say that a member may want to do this or do something else, but they cannot say “you”, as that refers to the Chair.

When my father was working in the railway workshops in Ōtāhuhu and in downtown Auckland, it was not the National Government that laid him off; it was the Labour Government. Who was in the Labour Government, back in those days?

💬 Hon Member: It closed the workshops.

That is right. That Government closed the workshops and closed the freezing works. Members should not forget that in those days the State owned the railways—the State owned mostly everything in those days, including Telecom. Who were the ones to get laid off first? Guess what? Working-class Māori workers were shown the door by the Labour Government.

Now, after being out of Government for 5 minutes, Labour members are back on their high horse protecting the workers. For the last 9 years they have had this mantra: “The working class can you-know-what. I’ve got the boss’s job at last.” That was the mantra of the Labour Government for 9 long years.

💬 Phil Twyford: Who raised the minimum wage every year, Tau?

Absolutely! I was just getting to that point. A new member has sounded out, although it was not from his seat.

The previous speaker said that people can make a living out of delivering pamphlets. I do not believe him one iota. Nobody makes a living out of delivering pamphlets. People subsidise their benefits and their income by delivering pamphlets. How do I know that? It is because somebody very close to me, who is a second-year teacher, for goodness’ sake, also delivers pamphlets to subsidise his income. I say well done and I tell him I am absolutely proud of him, because he is going out and earning that extra money. But to tell members that somebody can make a living out of delivering the Warehouse pamphlets—you have to be joking! I am sorry, Mr Chair—I did what you warned us not to. I apologise.

Let us look at something else. During the 9 years of the Labour Government, the minimum wage increased by $5. Is that right? Well, in 120 days it has gone up 50c! It has gone up 50c in only 120 days. Let us just think about what we could do in 9 years.

I want to ask a question: why, during 9 years of a Labour Government, did this bill not hit the Table of this House?

💬 Hon Steve Chadwick: It did!

Oh, sorry, it did. Why did Labour not pick it up as a Government bill? I will answer that for members opposite. It is because they did not really believe in it. Who was the previous Prime Minister? Who was the previous Deputy Prime Minister? Everybody has forgotten. But the facts remain that after 9 long years—

💬 Hon Steve Chadwick: Why isn’t this member a Minister?

I am not a jealous person, unlike some people. I am happy being a list member for the National Party, and that member should be happy as a list member, too. In 9 long years there was not a whisper about this being a Government bill.

I start by acknowledging Darien Fenton, as my Labour colleague already has. I acknowledge her determination and her commitment to trying to improve the situation of low-paid workers in this country. This bill is another attempt to try to make sure that we provide comprehensive protection to workers in this country. I also acknowledge the chair of the Transport and Industrial Relations Committee at the time, Mark Gosche, who also worked hard on this legislation.

At its most fundamental, this bill is about ensuring a socially acceptable minimum wage that is universally applied and that is a right, irrespective of the technical nature of the employment relationship. In other words, everyone should get a fair day’s pay for a fair day’s work. No one should earn less than a socially accepted minimum. In economic hard times, such as those we are facing now, it is particularly important to protect all workers in this country, especially low-paid and vulnerable workers. They, explicitly, are the people whom this bill intends to cover.

Many minimum rights, including the minimum wage, apply only to employees, and many hard-working New Zealanders are not entitled to a socially acceptable minimum wage because they are not employees—they are termed and defined as contractors. That is unfair, and I am sure that most New Zealanders would see it as unfair.

Interestingly enough, Fair Go screened a programme last year—I was interviewed for it—about the leaflet deliverers we have just been talking about. It showed real examples of what people were earning delivering leaflets. There was an unprecedented level of response to that programme. Never before had so many people contacted the show. New Zealanders thought it was unfair.

In New Zealand and other developed countries, so-called non-standard work has been increasing, and often that work is precarious and low-paid. In fact, it is quite clear that in some industries and sectors, contracting models have been developed as a way of reducing wages, undermining security, increasing risk, and maximising the cost to workers. We all need to recognise—and the Transport and Industrial Relations Committee recognised—that there is a distinction to be made between those at the lower end of the contractor spectrum and those at the higher end. We are not trying to capture those at the higher end. This bill is targeting vulnerable workers.

Dealing with the area of non-standard work is not easy, and I commend the select committee for trying very hard to deal with this issue and get it right. The fact that something is not easy does not mean we do not do it. We should not avoid what is difficult. Other countries have managed to find solutions to this issue. The United Kingdom, for example, has legislation that ensures that the minimum wage applies to workers, not just employees. In Canada there are similar provisions. Just to be very clear, I note that the scope of this bill has been narrowed, after submissions, to target, in particular, vulnerable workers who are listed in a schedule. It specifically excludes things like household arrangements.

I also acknowledge the hard work of organisations like the Council of Trade Unions and Business New Zealand, which worked with members of the select committee and others to try to find ways of making this work and came up with very real suggestions that have been incorporated into the amendments now before us.

I want to make sure that people understand what this bill is really about. Some people have said that it is unworkable. Actually, the requirements to comply with in the amended bill would be that the contractor was engaged by an organisation or a principal to provide one of the services listed in the schedule. Those parties would agree on what was a reasonable time to provide the service and on the remuneration rate for such a provision of service.

That should equate at least to the minimum remuneration rate to be set from time to time by Order in Council—in other words, the minimum wage. And, shock, horror, the principal would have to keep records as to the hours and remuneration paid—full stop; that is it. That does not sound too hard to me.

Finally, I speak in support of the recent amendment to lift, in a staged way, the minimum wage to $15 per hour by 2011.

I rise to oppose the Minimum Wage and Remuneration Amendment Bill. This bill started with good intent, I believe, to help some contractors who the Opposition thought did not, due to perceived exploitation by business, earn sufficient income. But the bill was extended by a Supplementary Order Paper to increase the minimum wage over 3 years to a target of $15 per hour. Having grown up in a minimum wage household, I know that the use of the minimum wage is not the best way to raise wealth in a minimum wage household. This bill is about freedom of choice—the freedom for self-employed people or contractors to choose how and what they are paid. This bill will remove the incentive to work hard, to take risks, and be paid for it. Instead, it transfers wealth from those people who work hard to those people who do not. This bill will not create one dollar’s worth of wealth for New Zealand. All it will do is transfer wealth from one household to another. This Government believes that should somebody—

💬 Paul Quinn: I know that lot over there wouldn’t know what hard work was, Aaron.

—they would not know what hard work was—choose to be an employee, then he or she should be provided a safety net, that being minimum wage. Someone who chooses instead to be a contractor does so for good reasons—for employment flexibility, for taking advantage of the ability to transfer and claim costs, for tax-planning purposes or efficiency, or even for temporary work. At the end of 2008 about 11 percent of New Zealand workers chose to be self-employed or contractors—11 percent. In fact, the number choosing to be self-employed or contractors had risen by about 5 percent in the period from 2002 to 2007, during the time of the Labour Government. Statistics New Zealand released in November 2008 a document called Employment and earnings mobility of the self-employed. This reported that the self-employed, primarily agricultural and construction workers, comprise over 50 percent of the self-employed or contracted staff in New Zealand. Those people are at the bottom 20 percent of that group, but they are actually paid twice what the bottom end of workers are paid in New Zealand. It appears the category of contractors that this bill is focused on is a small minority. This bill is not focused on fixing any exploitation that exists or is widespread. It is fixed like a Trojan horse—simply to increase minimum wages across the board.

Let us have a look again at the issue of exploited low-paid contractors and self-employed people. Incomes at the bottom 20 percent of the self-employed group in New Zealand are twice those of the bottom 20 percent of wage earners and salary earners in New Zealand. This begs the question of what this bill is all about—which is increasing the minimum wage, of course. Many self-employed people take on a degree of risk, and therefore bid for or negotiate their wages based on their expectations of what they may require. Some get it wrong, and as a result, for that contract they may be paid below the minimum wage. But on average most—as my figures from Statistics New Zealand point out—are earning well above the equivalent wages of wage earners and salary earners. By increasing the minimum wage, and for certain types of self-employed people only, this will simply lead to certainty of income for some at the cost of others.

There is not a big money-tree to pay for all this. In effect, this bill would result in a massive cost increase, which for businesses, in these tough economic times, could not be covered. Some industries would also have an administrative nightmare in relation to things that they currently use contracts for, because it is efficient for them to do so and results in a low administrative cost. Even worse, there is some significant uncertainty about what occupations are in and what are out. A lot of work is still required within this bill to make any definitions sensible. Let us take a specific example. I think this bill is supposed to fix the “phantom newspaper deliverer”. I used to deliver newspapers—probably like some others in this Chamber—the Christchurch Star in North Beach, in fact.

💬 Paul Quinn: Whereabouts was that?

The Christchurch Star in North Beach. The Christchurch Star and the Christchurch Crusaders! We used to deliver $15 worth of newspapers; we would get $15 a night for the delivery of newspapers. There was a choice—we could spend all night delivering, or it could be done in 10 minutes, half an hour, or an hour. I was a diligent young teenager and I used to work hard. I would get it done in about an hour. I could then run off to cricket practice, and help in the community a little.

That drivel we have just heard is what makes me afraid, in this Committee discussion. That attitude is the very reason why this Minimum Wage and Remuneration Amendment Bill is important. That attitude, which pervades certain levels of our society, I thought was well spent. That was a disgraceful rendition against workers; it was anti-worker. It was shocking. I heard Mr Peachey suggest that this bill had a whole lot of issues that were anti-employment, and Paul Quinn knows very, very well that his people are the ones who suffer. Tau Henare was in here, pushing platitudes about why it was the previous Government’s fault. What is so wrong in trying to ensure that people have a life that is fair and equitable? What is wrong with that?

The speech that Mr Gilmore just made was disgraceful; it is the very reason why this party on this side of the Chamber is working it out with the community. And the voters are starting to feel it—the honeymoon is nearly over—they can sense that this is the sort of extreme-right nonsense that that party stands for.

💬 Chris Tremain: Take a look at the polls.

And Mr Tremain knows very, very well the effect the 90-day bill and all of that nonsense has in Napier on those people who are in the orchards and who are delivering pamphlets. And what did the Labour Government do over the last 9 years? It ensured that there was surety, and that there was collectiveness around the minimum wage. The Labour Government took it up every year by $1. When we came into Government it was $7.25; that miserable lot 9 years ago had taken it up by only 86c—86c over 9 years. What does that tell us? This is starting to be a repeat practice. What does that tell us? Those members should ask that question.

I certainly understand about the recession, and the aiding and abetting of businesses to stabilise financial patterns. But those micro-aspects in relation to workers are things we must never ever forget. To be in this Chamber, and to listen to that sort of nonsense, is really something I thought New Zealanders were well shot of. Where are we at, in the sense of those things like $3 prescriptions, and preschool management and preschool funding? That is how we do it—capping rents, and ensuring that people can live within their earning capacity. What is wrong with taking the wage up? When we were in Government, Māori were going into the labour market four times more quickly than anybody else, and coming out of it more slowly, but they will not do that with this sort of attitude and negativity. I commend Darien Fenton for having the courage to put this bill up front, because there are people masking the difficulties in the recession.

We saw that situation in the 1980s when they put up those fuzzy clouds. Everything was hard—and it is now. But when people make $1.5 million a year profit as individual dairy farmers, and that carries on and they put it somewhere, we know that they have done very well out of the last 9 years. A lot of businesses in this country made huge profits; let us talk about that. Mr Tremain knows that, in the real estate area. They have made major profits—incredible profits. But then when they get to this stage, they say they will look after the top end but never mind the workers. Shame on them! It is a shame they should even think that. It is a shame that Allan Peachey should start to come out with that sort of diatribe and suggest that this bill would divide the employment field. That is a disgrace. The labour market is a serious place, but everybody should be allowed a crack at being able to participate. They should be able to pay their bills, be able to feed their kids, and be able to clothe their kids. What is wrong with that?

That member should not sit there in his pink tie and suit and make out that, at the end of the day, everybody wants to be unemployed, or that everybody wants to have small wages. That member and I know that in earning well on a $100,000 - plus salary, there are a lot of things we do not have to worry about too much. But there are families out there—thousands of them—who are not being recognised at this moment, and who are not being supported in relation to their wage levels. What is so great about denying those people, whether they are delivering pamphlets, picking produce in orchards, or working in factories? What is so great about that?

I join my colleagues on this side of the House in opposing the Minimum Wage and Remuneration Amendment Bill. I start by making the observation that Darien Fenton, in her opening remarks defending the bill, made the observation—as I heard it—that she took over the bill when she entered this House in 2005.

💬 Aaron Gilmore: When?

It was 2005, I think. She gave the impression that she took it over from someone prior to that. So I am left wondering, given the sincerity and forcefulness with which the previous speaker, Parekura Horomia, delivered his heartfelt concerns, and given that, as a former senior Minister in a Government that the people rejected very recently, he had those feelings that were so passionately delivered here tonight, why this bill was not supported by his Government.

The bill has been left to sit since 2006—what a disgrace. Then we have the audacity of the previous Minister of Māori Affairs lecturing me about my people, when he sat in the previous Government for three terms and did nothing—absolutely nothing. My first observation is that if the members of the Opposition are so sincere about supporting this bill now, then I really question their integrity and honesty.

💬 Hon Member: Take a deep breath.

Parekura has got me excited.

💬 Hon Steve Chadwick: I raise a point of order, Mr Chairperson. I wonder why we have to suffer the decibels from the member opposite. It is really quite hurtful to our ears over here. I urge you to ask the member to speak more moderately.

The CHAIRPERSON (Hon Rick Barker): That is not a point of order. The member is entitled to debate in the debating chamber. This is a loud, robust debate. I suggest that he has been encouraged to speak louder by the interjections from the Opposition benches. I think it is about one all.

I am sorry the Opposition junior whip is having problems with her hearing but she may take her leave if she wishes. The reality is that my ears are deaf from the pummelling they took from the previous speaker, Parekura Horomia, so I am not actually hearing myself properly.

I will carry on. The second point I make is that this bill, as it is now presented, represents the moving feast of the Opposition being unable to decide what to support. We recently had a Supplementary Order Paper that changes the goalposts because the Opposition cannot decide what it is really pursuing. For that reason alone, this bill should be rejected.

Let those members opposite consider that the real reason I stand here is because I want to share with my colleagues on both sides of the Chamber the knowledge that some of the greatest pleasures I have ever enjoyed in life—certainly greater than representing the New Zealand Māori team on the rugby field—

💬 Hon Parekura Horomia: What have you done about the Māori team, Paul Quinn? That’s a disgrace.

I knew that would get the member going.

Some of the greatest pleasures I have had have been as a young master—an adolescent—working for my father on the farm, doing the dipping and helping out in the woolshed in a “penny a pound” type of atmosphere. I was encouraged in my youth to work hard, and I was rewarded for the number of sheep and lambs that I could catch and drench. The reward was at a piecemeal rate, which was great.

I look at the schedule here and see that most of the people mentioned are contractors—and they love to be contractors—such as for courier services.

I am very pleased to take a call on the excellent Minimum Wage and Remuneration Amendment Bill, which was introduced by my colleague Darien Fenton.

I was intrigued by some of the comments from National Party members opposite. Tau Henare—I think he is a National member these days; it is hard to keep track—thought that nobody made a living delivering pamphlets. Rather than dealing with the issue, those members will just pretend that a whole lot of people do not exist. National does not need to worry about the minimum wage, because instead it will say that those people actually do not exist, at all. It thinks nobody makes a living from delivering pamphlets—that is what Tau Henare said. He came into the Chamber and said that. I can tell the member that I have met several people in my electorate who do just that, and they get paid a pittance. They get paid a pittance because their employers work their way around the minimum wage by having contracting arrangements. That is exactly what this bill is all about.

Aaron Gilmore talked about choice, but choice for whom? Who chooses to be poor? Not very many people do. He talked about how he grew up in a State house. I congratulate him, but that does not give him the right to pull up the ladder behind him. He talked about choice, but choice for whom? It is choice for the employers who work their way around the minimum wage in order to avoid paying hard-working Kiwis for a fair day’s work. What does National object to about getting a fair day’s pay for a fair day’s work?

💬 Hon Gerry Brownlee: Labour suppressed the average wage. It was dreadful.

Gerry Brownlee objects to that because he would not get paid very much, at all.

This bill highlights the stark differences in approach between the Labour Party and the National Party. The Labour Party stands for Kiwi workers when the going gets tough.

💬 Hon Gerry Brownlee: I raise a point of order, Mr Chairperson. I think that, given the comments that have just been made by that speaker, it is appropriate for me to point out that this bill sat on the Order Paper under the previous Government—without getting a reading—before that member was out of short pants.

The CHAIRPERSON (Hon Rick Barker): The member is not raising a point of order; that is a debatable point. Please let the member continue his speech.

Thank you, Mr Chairperson. The Labour Party stands for Kiwi workers when the going gets tough; we know that the going is pretty tough out there. One in five Kiwi workers are worried about their jobs, and we are ready and willing to work with the Government to ensure that we protect those workers’ jobs. But this Government is not interested in protecting the jobs of the most vulnerable workers. It is not interested in helping people on the minimum wage. It is not interested in helping the people who, because of a loophole in the law, are not even getting the minimum wage. This Government has turned its back on hard-working, low-income Kiwis.

John Key talks about the rolling maul. Well, low-income New Zealanders have found themselves underneath that rolling maul. They are being mauled by the new National Government. They are at the bottom of the maul. First of all, their tax cuts, which the previous Labour Government had promised them, were taken away by National so that National could give them to people on higher incomes. The National Government is like a reverse Robin Hood—stealing from the poor to give to the rich. Then the Government went after those people’s savings by cutting the KiwiSaver scheme in half. National has been going after low-income workers ever since it came into Government, and its opposition to this bill is yet another example of that. The Government will vote against a bill that would extend a safety net to a whole raft of workers who could find themselves struggling as a result of tougher economic times.

Who does this bill benefit? Who will be covered by it? People working in building and construction services and in labouring jobs will be covered by this bill. I want the National Government members to stand up and tell those people working on building sites why one person who does a hard day’s labour should be paid less than another person who does the same job—a hard day’s labour—just because one person is a contractor and the other is an employee. Let us see Government members stand and justify that.

This bill will protect people who are contracted to deliver newspapers and pamphlets to letterboxes. We have seen some shocking examples of their situation. As some of my colleagues have alluded to, the Fair Go TV programme last year uncovered examples of children earning as little as 25c an hour to deliver pamphlets. That is just outrageous. However, there is some good news for the National Party, because one group of deliverers will not be covered by this bill. That group is the legions of volunteers who are out there tramping the footpaths to deliver National Party leaflets. They are the Exclusive Brethren.

I stand to oppose the Minimum Wage and Remuneration Amendment Bill. This bill started off by imposing the minimum wage on independent contractors. This bill absolutely confuses contract of service with contract for service. Independent contractors should be free to set their own terms for a contract. This bill will not work because we cannot set hourly rates for independent contractors. How will we define the hourly rates to be paid to painters or plumbers on a project, and the hours they took to get the work done or to plan the work? How will we calculate their hours? I disagree with the view that independent contractors should be paid hourly rates because it is fair. What is fair is that independent contractors have the right to choose to become independent and enjoy their perks. They have the benefits of charging whatever rate they want and working for whatever time they choose.

This is an awkward time for this bill to be passed. It is a difficult time for businesses. They are already struggling, due to high costs. We need people to be employed. We do not want the unemployment rate to increase. If this bill is passed, many of the independent workers will lose their jobs and be unable to work. Unemployment is on the increase. We need to help these people to retain their jobs. Being an independent contractor is a lifestyle of someone’s choice. I believe it is part of New Zealanders’ culture that people should have some option to bring in independent contractors, without the Government interfering in their hourly rate. If contractors wanted to be paid a fixed rate or work fixed hours in order to get the benefits of employment, they would choose to be employees.

Independent contractors have competition in their pricing. Some put forward a low price because they want a job or are new to the industry. This is a business by choice. I believe that independent contractors should be left to make their own choice.

To use an example in relation to the delivery of pamphlets, I say it is ridiculous that a delivery boy should be paid an hourly rate. I remember my own kids used to deliver—

💬 Hon Ruth Dyson: It is delivery man or delivery woman, not delivery boy. Read the legislation.

Whatever it is, I remember my children delivering papers. They started by taking 3 hours, but when they finished they used to take only 1 hour and they got the same price as previously. I think there is an incentive if they are paid on that basis.

I oppose this bill. Thank you.

It is a pleasure to stand and take a call on the Minimum Wage and Remuneration Amendment Bill. I want to give my heartfelt congratulations, as my colleagues have, to Darien Fenton and also to David Parker before her, who originally scripted the bill.

I have heard Opposition members saying that this bill has been languishing. That is simply not true. This bill is the work of a hard-working member who progressed the bill through the member’s bill process. In fact, if the former Labour-led Government had not been so busy passing the Working for Families legislation, which was opposed by the National Party, passing legislation providing for paid parental leave, which was opposed by the National Party, introducing fairness at work, which was opposed by the National Party, introducing support for vulnerable workers, which was opposed by the National Party, improving health and safety, which was opposed by the National Party—

💬 Hon Ruth Dyson: Pay equity.

—introducing pay equity, which was opposed by the National Party—[Interruption] They have scrapped it. That is supposed to be the party that cares about people.

I find it very, very offensive to hear the member opposite, Kanwaljit Singh Bakshi, talking about how people should not be paid a minimum wage. I think he talked about struggling businesses and high costs. We are talking about speakers who stand in this Parliament and say that to pay a worker the minimum wage is a high cost for a struggling business. I believe that we have no place for those arguments in this Chamber.

I congratulate the Labour members on the Transport and Industrial Relations Committee. To say that the bill was totally rejected is, again, a falsehood. It was rejected because National had the majority on the select committee and the New Zealand First member, Peter Brown, was a little bit confused. I think that if Peter Brown had had the time to really go through the bill, he probably would have supported it, because his heart was often with workers.

But, unfortunately, this bill came back having been rejected by the select committee, because the National members who were on the select committee do not believe in fairness; they do not believe in a fair day’s pay for a fair day’s work. I heard Kate Wilkinson in this House today answering questions.

💬 Hon Clayton Cosgrove: Who?

Kate Wilkinson, the Minister of Labour. I challenge the Minister to stand up and take a call. I think that it is abhorrent that the Minister of Labour has not stood and taken a call on this bill. She has not justified her Government’s position. I heard her at question time implying that if this bill came into effect and became an Act, so that people who are contractors are assured of getting at least the minimum wage, the minimum wage would be mandatory and nobody would be paid above it. That is just nonsense.

We hear members opposite talk about their contribution to workers in New Zealand. I ask how those members help workers in New Zealand. Apart from their paltry increase in the minimum wage—which they felt obliged to give because of the pressure put on them by workers and unions in this country—their other glowing example is the fire-at-will bill. That is how National members have helped workers in this country. Those members say that they will make life easier for workers and will raise their aspirations and opportunities by letting them get sacked in the first 3 months of their employment, with no right of redress. That is what National members do.

It is not too late for National members to change their minds. For all we know, Kate Wilkinson may be sitting there thinking: “My goodness, I think those Labour people have a point.” I am very hopeful, because she was the only person in that party who was honest enough to say—and I think that members can all repeat this together—“The National Party is not a party of compulsion.” Do members remember that?

💬 Hon Clayton Cosgrove: Say it again.

“The National Party is not a party of compulsion.” The National Party believes that by paying the minimum wage to the most vulnerable workers—

This Minimum Wage and Remuneration Amendment Bill might be good therapy for a party of downtrodden trade unionists suffering from their biggest electoral defeat for a long time, but it is not good law. It is not good law. It shows that members opposite have learnt absolutely nothing from the trumping they got in the 2008 election.

One of the things that the public have had it up to their eyeballs with is nanny State and its extra regulation. You see, the fundamental view of members opposite is that people cannot make choices for themselves and that this Parliament has to regulate every possible part of everybody’s life.

The part those members really object to is actually people being paid on contract rather than being members of a union. Those members want to be able to control every aspect of people’s lives, because at core Labour does not trust people. Labour has the patronising attitude towards people at the bottom of the heap that only the Labour Party and unions can protect them.

Take people like real estate agents, who are paid on sales.

💬 Hon Clayton Cosgrove: Oh! Your mates.

The member who chips in, Mr Clayton Cosgrove, wants to—

💬 Hon Clayton Cosgrove: You’re for protectionism there.

He destroyed them. They all voted for me in my patch. I know they did not vote for him. Real estate agents are paid on sale. They are paid when they sell a property. Labour members do not like that. Labour wants them, too, to be paid on an hourly rate, because Labour objects to any form of performance pay.

When I was a young man I delivered pamphlets as a university student. I learnt that one gets paid on results. I learnt that rip-off artists are out there. That is true, but they are actually one of the lessons of life. I told them to stick their pamphlets where it hurt.

What the members opposite believe is that if we regulate every nook and cranny in life, we can protect people from having to make decisions for themselves. That is not the view of the Government. We are a Government that says the nanny State idealism of members opposite was rejected by voters in 2008. Members opposite actually need to realise that New Zealanders do not want this Parliament passing law to eliminate any capacity to earn on a contract basis. That is not where New Zealanders are at, and it is not where New Zealand has had a proud history.

The last point I make is that members opposite really somehow believe that the only way incomes grow is by this Parliament passing laws. It is not. The only way this nation will pay higher salaries, and the only way this country will lift people out of poverty, is to support enterprising businesses that actually raise living standards with higher skills, innovation, and all those things that make a nation successful. I say to members opposite that they are living in the past. We do not regulate for wealth. We do not regulate for economic growth. We actually have to create it, and that is why members on this side of the House say that voters voted against nanny State. [Interruption] Well, I can see that this bill is good therapy. Members opposite have taken a thumping. They are feeling depressed. They need some group exercise by which they can celebrate their trade union heritage. But that is no excuse for poor law that does not actually do anything for New Zealand.

If we are serious about helping those on the bottom end, let us get on and create the legislation that will create wealth and jobs. [Interruption] The member in the chair, Darien Fenton, raises the issue of accident compensation. That is very interesting because under her previous Government’s policies accident compensation levies will be driven up to 4 percent of what people earn. That is the current policy introduced under a Labour Government. Members on this side of the House ask how a uniform tax of an extra 4 percent on every worker will help the overall wealth levels of our nation.

I have to say that Dr Nick Smith talking about depression is absolutely the pot calling the kettle black. This is the man who said in his speech “We do not regulate for wealth.” Well, I ask Dr Smith, that genius whom we know so well, what a tax cut is by which anybody who earns under $40,000 a year gets zip, and anybody who earns above that, including him and his wealthiest mates, gets heaps. If it is not regulating for wealth—

💬 Hon Dr Nick Smith: Oh, the politics of envy.

I waited for that. I waited for the old stewed prune to say that one. What is the politics of envy? When that member was in Government the minimum wage was raised by 86c in 9 years. What a generous member he was! Talk about the politics of envy! And he voted against every minimum wage increase Labour put through in 9 years. He talks about the politics of envy; I am talking about the politics of compassion. He talks about envy; I talk about compassion. One would think, the cock sparrow that he is, that because his Government, after 18 years—9 of which his party was in Government, and 9 of which it was in Opposition—raised the minimum wage by a paltry 50c, he was the male version of Mother Teresa. I can say that as a Catholic! One would think he should be canonised in his own lifetime for the generosity in giving the workers 50c in 18 years. That was his legacy.

Progress reported.

Report adopted.

The House adjourned at 9. 56 p.m.