Minimum Wage Amendment Bill

I am very pleased to take a call on the Minimum Wage Amendment Bill. In starting, I want to acknowledge the difficulties for those living on low incomes and on the minimum wage. The goal is indeed to increase the minimum wage. Indeed, this Government has done so every year since it came to office, as well as reducing the lower tax rates, including the first marginal tax rate to 10.5 percent and to 17.5 percent for those earning over $14,001, and we have maintained Working for Families.

I think that is really where any agreement or empathy I have with the sponsor of this bill ends, because, as I have said in this House in the past, Dr Clark has become very good at telling half a story very well. One of them is that this will not have an effect on businesses, on people on more than the minimum wage, or on unemployment. I want to take him to a place where he has never been, and that is into the smoko room of a small business. Let us say it is a plumbing firm in Dunedin North. He is sitting in a smoko room, and the story goes something like this: “Hey, guess what, Scott?”.

💬 Scott Simpson: Tell me what.

“I was on $13.50 an hour. The Government changed the law, and now I’m on $15 an hour.” Jami-Lee sits beside him in the smoko room and he says “Hang on. I was on $15 an hour. I was ahead of you by 11 percent. I’m going to go to my employer and say that I want an 11 percent increase in that wage.” So he gets to $16.67 an hour. Then another person in the plumbing firm—her name might be Louise—is sitting there going “Hang on, I was on $16.67 an hour. I want an 11 percent increase.” So that person goes to $18.52. And so on and so on. It is simply not acceptable—in fact, it is deceitful—to say that this would not have a knock-on effect on the thousands and thousands of small businesses in this country.

Let us remember that the other side talk about big business. They talk a lot about big business, do they not? But we know that nearly 60 percent of employees in this country are employed by businesses of fewer than—

💬 Brendan Horan: I raise a point of order, Mr Speaker. I apologise for interrupting the member’s speech, but I have a small business, and none of that happens in my small business.

The ASSISTANT SPEAKER (Lindsay Tisch): Sit down. That is not a point of order. Points of order are about process, not about content. The member has a chance to make a contribution to this debate later on if he wishes.

I was saying that this is a country of small businesses. Nearly 60 percent of employees in this country are employed by businesses employing fewer than 19 staff. If one takes it up to 50 staff, it is nearly 90 percent of all of those people.

Official advice on this bill has it that 5,500 people would lose their jobs. On this day, which is Women’s Suffrage Day, the same official advice says that 3,350 of those people would be women. Dr Clark blogs about the fact that this would not have any effect, and refers to unemployment rates in the 1990s. He says that Labour increased the minimum wage significantly and that unemployment went down. If you follow that logic, why do we not make the minimum wage $30, and unemployment would disappear? It is voodoo economics, and it does not make sense.

The last thing he has been blogging about is the Prime Minister’s cleaner. The Prime Minister’s cleaner, according to Dr Clark, is earning something like $14-something an hour. That is above the minimum wage but still not enough to live on, particularly given the many dependent children in her care—by some counts, it could be eight. That is a challenge. I accept that. But this is another example of the member telling half a story very well. Thanks to Working for Families and accommodation supplements, somebody in that situation, even on the minimum wage, with that many children in their care, would be getting the grossed-up equivalent of a $70,000 salary. I accept that that is an appropriate thing to do. In fact, anybody in that situation—

💬 Dr David Clark: She’s a grandmother.

Well, that does not mean that those children are not in her care.

💬 Darien Fenton: They are not in her care.

So this is the point: telling half—

💬 Dr David Clark: They’re not.

That is right. Well, let us say that maybe only four children are in her care, so probably $60,000. The point is tell the whole story, Dr Clark, because it does this case no good. At least when Holly Walker talked about Working for Families in this debate she compared that with a subsidy to employers. I simply do not agree with that. If you call that a subsidy and then take it away from those people who have family members who need to be cared for and give it to people who do not, that does not make sense, nor does this bill.

On behalf of New Zealand First I rise to speak to the Minimum Wage Amendment Bill. First we have to congratulate David Clark on his good fortune to have his bill actually drawn from the ballot. New Zealand First supports a minimum wage of $15 an hour. It was a policy that we actually campaigned on during the election, and it is great to see the support on this side of the House for this bill and this very important issue.

In New Zealand First we actually want Kiwis to be able to earn a fair day’s pay for a fair day’s work, and at the moment too many people—young people, in particular—are struggling to make ends meet. Since GST went up in 2010 the minimum wage has increased only slightly, to $13.50 an hour. We have got 300,000 workers earning the minimum wage, and we see it in lots of businesses right around the country. I know of service stations where the workers are paid only the minimum wage, when they are the sole person who is actually on site. In Australia the minimum wage is the equivalent of NZ$20. I know that this Government has stated on many occasions that it is committed to closing the gaps. This is one way that it could close the gap with our neighbours. We can really make a start on this issue. As it currently stands, we have got an exodus of young people moving to Australia for jobs and for better wages, and they are going en masse. Many of them know that they can actually get a far better deal over the Ditch than what they get here.

For months we have seen reports of families struggling to live on the minimum wage, and we have got one report here, Solutions to Child Poverty in New Zealand, from the Expert Advisory Group on Solutions to Child Poverty. We see reports of children working after school in jobs in order to pay for their school uniforms, because mum and dad cannot earn enough to actually buy it for them. I have got one such report here from August 2012 from Stuff, which says that a 16-year-old Auckland schoolboy “already works 25 hours a week to help keep his siblings in school … The teenager’s earnings helped pay for school fees, stationery and uniforms for him and his siblings but couldn’t cover school trips which they always missed out on.” This is indicative of people not having a reasonable living income. We know that children are going to school hungry. We have heard it often, right here in this Parliament, and, of course, that affects their learning. I know, having come from a school classroom.

Change has to begin with the low-income earners, with the battlers. It is these people who are the glue that keeps our society together. And we can see why people are packing their bags and heading over the Ditch. The high wages are a magnet that New Zealand just cannot compete with—yet we should. Wages have not even kept up with the cost of living. Everything we can think of—petrol, rates, rent, electricity, milk, even prescription charges—has gone up far faster than wages, yet we have a Government that has taken few steps to alleviate the pressure on hard-working Kiwis. I must say that I was delighted to hear Minister Bridges say in question time this afternoon that he was reconsidering the registration and the warrant of fitness fees. Anything will help these working people. What we have got here is the fact that we are left to some of the free-market ideologues in this Parliament and, quite frankly, with them there would be no minimum wage. We know that inequality has grown, and it continues to grow. But we in New Zealand First understand the dignity in doing an honest day’s work, and we recognise too that an honest day’s work requires an honest day’s pay. It is time for the House to act. We need to vote this bill to the Transport and Industrial Relations Committee so that businesses and the people of New Zealand can actually have their say.

I seek leave to table a photocopy of an article by the Bay Report, dated 20 December 2007. The Bay Report is a—

The ASSISTANT SPEAKER (Lindsay Tisch): That is a newspaper, is it not? It is readily available.

Well, it is actually a newspaper in Whangarei, one of the most beautiful—

Order! It is a newspaper and it is readily available to any member.

I seek leave of the House to table a submission document from Anglican Care Canterbury/Westland social justice division from February 2011, which states that increasing the minimum wage to $15 per hour—

Leave is sought for that purpose. Is there any objection? There is objection.

💬 Brendan Horan: Shocking.

The ASSISTANT SPEAKER (Lindsay Tisch): Can I just remind the member that the House decides whether or not a document is tabled. When that announcement has been made, and someone says that they do object to it, that is the end of the matter, and we cannot comment about that result. Does the member have another point of order?

Thank you. I am so sorry about that. It is just that I am so passionate about the people of New Zealand getting fair pay. But I seek leave to table a document from Statistics New Zealand that shows that 53,200 departed for Australia last year—

To the member again, this is information that is readily available to all members. Members can access that sort of information, so we do not table documents that are readily available. When you want to table a document, it has to be something that cannot be accessed; it is not in the public domain. That is what tabling a document is about.

I seek leave of the House to table a document from the New Zealand Human Rights Commission entitled Low pay and the minimum wage. This shows—

Order! You are trifling with the Chair. I have ruled very clearly that anything that can be accessed by members by whatever means is in the public domain, and we do not table that sort of document. I want the member to just reflect on what he is trying to do, because that is actually trifling with the decisions that I have made.

The Minimum Wage Amendment Bill in the name of David Clark is, I am sure, a sincerely well-intentioned bill, but it is flawed in its philosophy and its thrust and its focus. The way to create wealth for all New Zealanders is to have strong, vibrant, growing businesses that can afford to pay people well.

National does not support this bill. We do support the hard-working people of New Zealand, but not this bill. I do not want to endorse this bill, at all. Thank you.

It is a real privilege and a pleasure to speak on the Minimum Wage Amendment Bill. I want to congratulate my colleague David Clark on his good work in bringing this bill to the House and his good fortune. In fact, he has been so lucky with the members’ draw that I have invited him to come with me to the races the next time I go. He has not actually taken that offer up yet, but I will forgive him, because he has brought forward such a good, solid Labour Party bill into this House to reflect our policy of increasing the minimum wage to $15 an hour. That is in contrast to the platitudes that we get from the other side of the House. National members want to say that they support hard-working, low-income people but will not do anything to help them in their plight. Unlike that Government, the Labour Party is prepared to take the practical steps that will make a real difference for people in their day-to-day lives. That is the difference between National and Labour.

I think it is really appropriate that we are debating this bill on Women’s Suffrage Day, because, again, this is a really practical approach that we can take to support the working women of this country. Sadly, what we do know, and this is according to the Department of Labour itself, is that 57.1 percent of females are on the minimum wage—57.1 percent of women who are in paid employment are, in fact, on the minimum wage. So, if nothing else, this should tell us that if the Government is at all serious—at all serious—about closing the gender pay gap, clearly increasing the minimum wage to $15 an hour would make a significant step in closing the gender pay gap in this country.

Women are far and away the largest demographic group who are on the minimum wage in New Zealand. They actually outstrip 18 to 24-year-olds on the minimum wage. There are 56.5 percent of 18 to 24-year-olds who are employed on the minimum wage. But I want to pause and think about that just for a minute. What is it that the Government feels comfortable with that women, no matter what age, end up staying on the minimum wage in greater proportions than young people entering the employment market for the first time? What is it about that that the Government feels comfortable with? Certainly on this side of the House we think that is wrong, and our view is shared by Judy McGregor in her role as the Equal Employment Opportunities Commissioner. Earlier this year she went undercover and did one of those minimum wage, low-paid jobs in rest homes. She was horrified. In fact, she called it modern-day slavery. She found that that very difficult work—physically challenging, intellectually challenging, and mentally exhausting work—was largely being paid for on the minimum wage. And, yes, it was almost all being delivered by women.

I want to challenge the Minister of Women’s Affairs about doing something about that situation, because the only work that the Ministry of Women’s Affairs is doing on closing the gender pay gap is to say that all those rest home workers should go out and get men’s jobs. That is the only work the ministry is doing to close the gender pay gap. Apparently this would all be fixed if only these women would go out and be plumbers, if only these women would go out and be electricians, if only these women would go into those fields, because then we could solve the gender pay gap. Well, I want to know who will be looking after us in our old age, in rest homes. Who will be doing that work? I do not want them doing it on the minimum wage.

One of the reasons why the Government has tried to pretend that it will not support working families in this way, by increasing the minimum wage to $15 an hour, is that it says that will drive more unemployment. I challenge those members to go and talk to the miners in Huntly and tell them that that is the reason why they are losing their jobs. Those miners are not on the minimum wage, yet 120 of them in that small Waikato town are losing their jobs because of that Government’s policies. That Government is selling State-owned enterprises in that town, and that is making a huge difference to unemployment—it is increasing it significantly in the Waikato town of Huntly. So the crocodile tears, the lack of policy, the lack of understanding, and the lack of compassion from the National Government with regard to this bill do not make sense, and every New Zealander knows it. I am very proud to recommend this bill to the House.

I just want to acknowledge that this bill, the Minimum Wage Amendment Bill, is about the minimum wage, and I think it is probably important to give a minimum time for my speech. I think one thing we need to look at in this is that changing the minimum wage in this fashion is arbitrary, but one other aspect to consider is that when we talk about redistribution, we normally do that, generally, through such things as welfare, taxes, and so forth. What we have here is placing a large burden on a group of taxpayers, being small businesses. It is not the right way to do it. We cannot support this bill.

The Minimum Wage Amendment Bill is a chance to make a much-needed step towards addressing child poverty in New Zealand. The Children’s Commissioner’s report on child poverty makes for some distressing reading. Far too many of our children are growing up in households that cannot make ends meet, let alone give them the best start in life.

I want to just comment briefly on some of the hogwash that has been spoken from the other side of the House through this debate. There has been a lot of talk about employment effects of raising the minimum wage by this small amount. That is absolute rubbish—absolute rubbish. Research from the Department of Labour, the Government’s own officials, has suggested that the minimum wage rises that this Government has put in have had no measurable effect on unemployment. That is very similar to the evidence that comes through from Australia and from the United Kingdom. It is absolutely true that there is very little effect on employment, if any at all. Treasury says that on the balance of probability, this will not have any effect on unemployment. As we know, during the 1990s, when National put up the minimum wage—

Sitting suspended from 6 p.m. to 7.30 p.m.

When I was so rudely interrupted by the dinner break, I was just making the very point that when National put up the minimum wage just 70c in the 9 years that it was in power in the 1990s, unemployment hovered up between 6 percent and 11 percent. It never saw those levels again under the Labour Government, when the Labour Government put up the minimum wage by a whole $5 over its 9 years. There was more that needed to be done, but you cannot doubt that the minimum wage went up, and what happened? Unemployment went down, down to the lowest levels in the Western World, so those who would argue that raising the minimum wage would cause unemployment know themselves, deep down, that they are wrong. They know they are wrong.

What we also know is that even the mean-spirited people opposite, those people who would put a view like the one that Michael Woodhouse put, who have this mean view of human nature that says that people do not want to get out and work, and you have to pay them a whole lot of money to get them out and work, should understand that increasing the minimum wage—even those who put that mean-spirited view—would be a good incentive to get people in work. But the reason people want work and want to get out there and work is that they care about their families. The jobs are not there, and there are economic consequences to underpaying those people. There is the underachievement of those young people who do not have full stomachs when they go to school. They do not reach their potential. They do not become the future taxpaying citizens whom we would wish them to become, because they have not reached their potential. They get preventable illnesses through living in cold, damp, and overcrowded conditions, from parents who do not have enough money to look after them as they would want to. Then there are the costs of antisocial behaviour.

We know very well that the economic case for opposing the minimum wage rise does not stack up. The money that is paid in additional wages goes to stimulate the economy. It also is true that small and medium enterprises largely already pay above the minimum wage—certainly at a higher rate than other enterprises—and it actually levels the playing field when their competitors are forced to raise the minimum wage also. So that party opposite, I would say, is the enemy of small business. That party opposite hates small business. It hates the fact that small business already pays decent wages and is undercut by other operations that are on the lowest common denominator. We need to pay a decent wage. We need to pay people the money that they need to live, to live good lives, to reach their potential, and to contribute towards our economy. This Government has the worst economic record in 50 years. There are nearly 50,000 more people in unemployment, and we know that 50,000 people a year are leaving this country permanently to go to Australia. The reason they are going to Australia is that wages are higher there. Wages are higher there. Nearly NZ$20 is the very lowest wage that gets paid there. There is a huge gap between New Zealand and Australia in wages, and if we continue to underpay, underpay, and underpay, we will see our children and grandchildren disappearing off to Australia, where they can get paid better.

This bill is a chance to take a much-needed step towards addressing child poverty in New Zealand. It is simple. It puts $60 a week more in the wage packet of a 40-hour-a-week worker so that they can put the necessities—the milk and cereal—out for the kids. It is not a cure-all for child poverty, but it is a very good start. I want to say in closing that the Prime Minister has admitted that he could not live on the minimum wage. Why does he think anyone else can? It is disgraceful and shameful for the Government to oppose this bill.