Minimum Wage (Starting-out Wage) Amendment Bill

on behalf of the Minister of Labour: I move, That the Minimum Wage (Starting-out Wage) Amendment Bill be now read a first time. I nominate the Transport and Industrial Relations Committee to consider the bill. At the appropriate time I will move that the Transport and Industrial Relations Committee report to the House on the Minimum Wage (Starting-out Wage) Amendment Bill by 28 February 2013.

Nothing can be more sapping for the spirit of a young New Zealander than to be on welfare at such an early part of their life. Everything that Governments can do to assist those people to get into meaningful work is important, and that is why this Government is bringing in this piece of legislation, in order to assist those young people. What is quite clear is that this is intended to assist three groups of people through the starting out wage. They are: 16 and 17-year-olds in their first 6 months of work with a new employer; 18 and 19-year-olds who have been paid a benefit for 6 months or longer and have not yet completed 6 months of continuous work with any employer; and 16 to 19-year-olds in training in a recognised industry training course involving at least 40 credits a year. The starting out wage is voluntary, and it must be agreed to by both the employer and the employee.

As I said, we want to help young New Zealanders get their foot on the first rung of the job ladder, and we want to make sure that they have an opportunity to get that job. This was recognised by the previous Labour Government, which introduced a proposal when it was in Government that would see people paid the same amount as they will get on this starting out wage, but it was called something else and it was limited roughly only to about 3 months. We are extending this to 6 months, and we are making it apply across a wider group of these younger people. So there is nothing mystical or magical about the starting out wage. There is nothing mystical about it, nothing magical about it, and nothing mean about it, because it is the rate that Labour put in place when it was in Government in 2008. But we want to make sure that that starting out wage is there to support young people who are new to the workforce, so that they can get into long-term sustainable employment.

We want to give them an opportunity to take advantage of the labour market to gain the necessary skills and work experience to assist them through their working lives. Indeed, this is what Mrs Dyson and Mrs Fenton said when they spoke in 2007-08 when the previous Labour Government introduced its equivalent of this legislation. What they said was that there was a good argument to recognise that for many young people, the first few months of their employment were a training period, when they were learning skills, getting experience, and providing skills so that they could add value to businesses in terms of their long-term sustainable employment. Labour thought it was right that young people be given that opportunity, and that is what we are proposing in this legislation—to give them their first foot on the rung of the job ladder. So this bill limits the period for an employer who can use the starting out wage for a young person who works for them to 6 months, unless they are training or supervising others, and after this time the young person is entitled to be paid at the adult rate by that employer.

The starting out wage also addresses the issue for many young people who have been on a benefit and who face difficulty re-entering or gaining a foothold on the workforce ladder. What we know is that the longer someone stays on welfare, the harder it is to get into work—

💬 Dr Cam Calder: That’s right.

Hon TONY RYALL:—and, as Dr Calder would say, the worse it is for their health. What we know is that the longer people are on welfare, the worse it is for their health. In fact, Dame Carol Black would say that being on welfare is equivalent to smoking a significant number of cigarettes every day. It has the same impact on your health. If we can provide every opportunity for young people to get into work, it is good for their future prospects, but also for their health. The starting out wage provides an incentive for employers to take these young people on. Those who have been out of the workforce for a while may lack skills and experience, and this provides an opportunity for them to get what is necessary.

As the Minister of Labour said in her press statement, the Government recognises there is also a need to provide more vocational training opportunities for 16 to 19-year-olds. It is important that these young people are able to engage in training for industry, and employers so far have indicated that they are not using the minimum training wage. So this bill changes the status quo by providing for young people between 16 and 19 employed under contracts of service that require them to undergo training to have a minimum starting rate rather than the minimum training wage. So we have reduced the number of training credits from 60 to 40 for 16 to 19-year-olds to give them the flexibility to choose a range of courses without having such a heavy load.

I think that the response to this has been really quite remarkable. Large numbers of employers around the country have said that this makes a lot of sense. I think there has been a pretty muted response from the union movement, really. I think it knows that the previous Government brought something in on this, at the same rate for a large number of young people. We are extending that to a wider group. The rate is the same. After 6 months they move on to the minimum wage that is currently legislated. But what is so important here is that we give these young people a chance and an opportunity so that when they go and apply for jobs, they are able to discuss their eligibility for this support with the employer. The employer can take that into consideration when they make their employment decision.

But people must know that these young people are being supported by the Parliament to get their foot on the first rung of the employment ladder. Just under 25,000 young people have already benefited from subsidised work placements and pre-employment training. The Government’s plan is working. There are around about 60,000 more jobs in the economy today than there were a little while ago, and, despite the uncertainty in so many parts of the world, the latest GDP figures show that New Zealand grew by 1.6 percent in the last 6 months. That is very, very significant. Economic growth is forecast to increase to 2 to 3 percent, and that is what drives real jobs in the New Zealand economy. Getting the private sector up and running creates the wealth and the jobs and the economic growth that creates more jobs and economic growth for New Zealanders.

This Government has taken a number of important steps under the leadership and auspices of the Minister of Labour, Kate Wilkinson. The 90-day trial period for new employees is deemed to create around about 13,000 new jobs. The lower company tax rate is really competitive with Australia, at 28c. Hundreds of millions of dollars are being put back into the economy through lower ACC levies. Hundreds of millions of dollars are being saved by removing 170 unnecessary red-tape compliance measures. We have got one of the lowest inflation rates we have had since 1999. Interest rates are at their lowest level in 45 years. This Government is putting in place the platform that provides the incentive and the encouragement for business to invest and grow jobs and create wealth in New Zealand. The people who are benefiting from that investment will be the young New Zealanders who will get increased opportunities under this change that is being provided by this Government. We promised to do it in the election. We have got a mandate to do this. We have got a mandate from New Zealanders to do this because it helps put the incentives in the right place to give businesses the confidence to grow, to invest in their workforces, and to compete in the world economy.

I am very pleased to be able to move the first reading motion for this bill on behalf of Minister Kate Wilkinson, who works tirelessly with our other Ministers to create opportunities for New Zealanders, and this is a big opportunity for young New Zealanders to get their foot on the first rung of the job ladder to independence and a better life, which we would want for all of them.

I rise on behalf of the Labour Party to strongly oppose this bill, the Minimum Wage (Starting-out Wage) Amendment Bill. In fact, it could be called the “Minimum Wage (Starting-out and Starting-out Again, Again, and Again) Amendment Bill. The Minister of Health is wrong when he compares this bill to Labour’s previous policy and amendments to the Minimum Wage Act around young workers. We had a one-off, 3-month, or 200-hours new entrants rate for a 16 or 17-year-old. It was a one-off whereby in their very first job an employer could employ them on 80 percent of the adult minimum wage. What this bill does, of course, is extend the unfair, discriminatory practices of this Government when it comes to workers generally, and it takes us back to last century. This is a last-century piece of legislation. Not since the last century have we had youth rates for 18 and 19-year-olds. They are old enough to vote, old enough to go in the army and fight, old enough to get married, and old enough to have families and have responsibilities. Yet here we are, saying that 18 and 19-year-olds under this bill will be worth only 80 percent of the adult wage—for the first time since the last century.

What happened last century when we had minimum wages, youth rates, for 16 to 20-year-olds? When Labour came into power in 2000 the youth rate was just $4.20 an hour for a 19-year-old. For goodness’ sake! Did that fix the problem of youth unemployment? No, it did not. We had some of the highest youth unemployment we have ever seen in this country. It is a very, very old-fashioned, last-century idea—the idea that this Government seems to have, that if you cut wages, that if you compete on cheap wages, then that somehow creates jobs. We know, from years of experience of trying that, that it does not work. We need to do better by the workers of New Zealand, but also by our young people.

This bill will add to the disappointment of our young people that John Key’s Government is letting them down. It is letting them down, and it is failing to give them hope. Numbers of them are getting on the plane to Australia, numbers are already saving up their airfare to Australia, because they know that even if there is a youth minimum wage in Australia, it is going to be higher than here. They need a Government that will provide them with a future that provides decent, secure jobs, not the low wage, any job is a good job, kind of approach that we have seen from the Minister of Labour, from John Key, from Paula Bennett, and from others. It is a very backwards-looking policy, and it gives one message to young workers. It says to them: “You’re not worth much.” It says to them: “This Government does not believe in young people. It does not like young people. In fact, we dislike you so much we are going to give you a pay cut. There is going to be a pay cut.” If you are 16 or 17, not only will you be on 80 percent of the minimum wage—$10.80 an hour—once, for your first 6 months of employment, but if you go to a new job, you are going to have to start all over again. That is why it is called the “starting over and over and out” kind of bill.

Many 16 and 17-year-olds work part-time jobs, they work casual jobs, they work to supplement their income while they study. They do not actually have a permanent job that goes for 6 months. So every 6 months or every time they start a new job, if they are working in the holidays, back they go, down the snakes and ladders ladder, back down to the youth minimum wage. They feel like they are just getting to be treated like an adult and respected for the work they do, and down the ladder they go, back to $10.80, over and over and over again. It is even worse in some ways—in many ways, actually—for young people who have been on a benefit. As I said before, 18 and 19-year-olds have not been on a youth rate since the 1990s, and we know that made no difference. But what the Government is planning to do under this bill and under its policy is to say to 18 and 19-year-olds: “If you’ve been on a benefit for 6 months, you’re so hopeless”—even though that benefit might be an invalids benefit or a sickness benefit—“you’re going to get punished if you get a job, by being on a youth rate for 6 months. You’re so hopeless you don’t deserve to get paid an adult wage.” What we will have is people going into the workforce who are 18 and 19, working alongside other 18 and 19-year-olds who are getting the adult rate. That is going to cause mayhem in the workplace. I think it is going to continue to cause real problems.

There are very deep flaws in the thinking of this Government around the process of 18 and 19-year-olds. They were raised in question time today by me, but were not particularly well answered by the substitute Minister of Labour, the Minister of Health. First of all, how will employers know if an 18 or 19-year-old has been on a benefit for 6 months? How are they going to know? The Minister said that oh, they will have a conversation. That just says to me that he has no idea what it is like for a young worker going into a job interview and having a discussion, a so-called discussion, with an employer about their job prospects. What it will mean, in my view, is that employers are going to be led into a trap. They are already telling older workers that they do not want them. I have had three cases of that in the last week—three cases in the last week—where older workers have been told: “No, we don’t need you, because we can get younger workers on cheaper wages.” Employers are going to be led down the path of believing that they can advertise and say they want 18 and 19-year-olds, who have been on a benefit, on a starting-out wage. It may be that Work and Income refers young people, but I have deep concerns about the privacy around that and around the discrimination that arises in the workplace—not only the discrimination for those young people, who may have been on a sickness benefit or an invalids benefit or a young parent payment, but also the privacy of their information. Why should that disclosure have to happen? They should be judged on their merits. They should be judged on their merits as to whether they are the best person for the job. If they are the best person for the job, they should get paid at least the adult minimum wage.

The other question I asked today was about the Minister’s claim in her Q and A that she put out with her bill, that this is not compulsory. That is just simply rubbish. What she said was that it is not compulsory; the worker will have to agree. If a worker is somebody who has been on a benefit, goes along and applies for a job, is sent by Work and Income, is offered a starting-out wage of $10.80 an hour and says: “No, I can’t afford that. I can’t live on that. I’m going to have to turn that down.”, they will be punished. They will be punished by having a sanction of a 13-week stand-down from Work and Income, which is part of the whole sanction approach to beneficiaries from this Government. So saying that it is not compulsory is quite simply ridiculous. A worker in that situation has no power to negotiate, to reach an agreement with an employer and say: “Actually, I think I’m worth a lot more than the starting-out wage.”, when they know that if they turn it down they are going to have their benefit cut and they are going to be punished by this Government, which does not like young people.

It is a very backwards-looking policy. The regulatory impact statement freely admits that the Ministry of Business, Innovation and Employment did not consult with external groups such as the Council of Trade Unions and Business New Zealand. It did not bother. Treasury suggested that this could apply to other groups of workers, so we might see in the future other vulnerable workers—we might see other groups of workers like Māori and Pasifika, who have high unemployment—on a starting-out wage. How disgraceful. Of course it is going to have an impact. We are trying to keep young people at school. We are trying to keep them in training. What this does is discriminate against those who choose to study and make a bit extra while they are studying. It will impact on their incomes and make it more difficult for them to study. This bill is a disgrace.

The time is right for the Minimum Wage (Starting-out Wage) Amendment Bill now. It is the right time for our economy. We have delivered the platform for economic growth in New Zealand, we have the opportunity there for young people to get jobs, and it is time that we enabled those young people to get on that first rung of the ladder of employment. This first step is an opportunity for somebody to get a job, who feels that it is the appropriate thing. It is the right time now to do this. The economy is in a situation where it is the right time, and so we look forward to the bill progressing through this House.

I think the Opposition makes a lot of assumptions about the profile of our young people and the training they undertake. Training can be a lifelong thing that goes on through one’s career, not just at one stage of somebody’s life. Somebody may take on a job in the first instance, but it does not deny them the ability to get further training and education later as they progress through their career.

This bill gives options for young people. It gives them options at a time when we need those young people to get employment. It is a bill that will deliver a brighter future for those young people, going forward. Thank you.

I would like to say that it is great to have the opportunity to speak on the Minimum Wage (Starting-out Wage) Amendment Bill, but this is a shocking piece of legislation. It is a bill of failure, and of a failing Government that has no ideas and does not care about young people in this country. In a country where the median household income has been steadily going downwards for the last 3 years, where hundreds of thousands of people are struggling to make ends meet, where poverty is afflicting our young in ever-greater numbers, where important sectors in the economy are shrinking—sectors like manufacturing and the service sector—and are letting workers go, what would you do? Would you encourage new investment? Would you support employers to invest in new technology and the skills for their workforce? Would you support our young, especially our young who are hardest to reach, those who are disaffected, disillusioned, disengaged, and now increasingly disappointed with this Government? Would you help them to get into training? Well, not this Government—not this Government. It has only one direction, and I am not talking about the boy band either. It has only one direction, and it is cheaper and it is nastier. It is cheaper and it is nastier, and the cheaper and the nastier, the better this Government likes it.

This bill is about failure. It is a failure in policies, a failure of ideas, and a failure of leadership. It is about appealing to failing businesses, because the only businesses that are interested in paying pocket money to young people to do adults’ work are dumb businesses, bad businesses, and grubby little businesses that we need fewer of in this country if we want a brighter future. This is not about doing anything good for young people. It is not about helping young people to get a start or get ahead. This is, pure and simple, about exploitation. It is about taking advantage of people often in a desperate and distressed state, and compelling them into low-quality, low-grade, and dead-end work. It comes down to this: this Government—the members opposite—just do not understand the labour market. They never have; they never will. They have no qualms about presiding over a gradual decline and reduction in the wages of working people.

The explanatory note of the bill says that it “is aimed at influencing employers’ demand for young workers.” It will not influence demand for young workers, because it cannot. What influences demand for workers of any type—young, middle-aged, or old—is whether there is work to do. Either there is work to do or there is not. If there is work to do, an employer has a choice to make. They can decide whether to do it themselves, they can decide whether to get someone else to do it, or they can decide that they just will not do it at all. Whether or not you get someone else to do it depends on whether there is dollar to be made, or as economists would say, that the margin of cost of employing that unit of labour is less than the benefit or return to the business. That is how the labour market works. That is what employment is about. The members opposite all look down, because they do not understand this. It is too hard for them, and they do not understand working people, which is why I do not care about them and why they pass laws like this, which are unsympathetic and totally fail to understand the reality of working people.

Now we get to the nub of the issue: it is about the price of labour. It is about the price of labour, and this Government wants to reduce it.

💬 Dr Cam Calder: It’s about jobs.

No, it is not about jobs, because jobs arise when there is work to be done. Jobs happen when there is work to be done. It is all very well for those like the former police officer opposite who have enjoyed the benefit of the largesse of the taxpayer to talk about that, but the reality is that employment and job opportunities happen when there is work to be done, and it reflects the state of the economy. And the economy is rapidly going down the toilet, as it is under this Government because it has no ideas about stimulating it, giving employers a decent chance, and taking people on. They do not understand that and they do not care about it, so they have put in measures like this. It is not about creating work; it is about displacing good jobs that other people have. If a dumb employer can see an opportunity to pay somebody $10.80 per hour for work that they are presently paying $13 or whatever it is for, then they will go for the $10.80. That is what bad employers do, and, sad to say, we have some in this country; I have met one or two. Fortunately, they are outnumbered by the good employers, the ones who say that they would never indulge in this exploitative behaviour, they want a high-quality workplace and high-quality workers, they want workers whom they can invest in and they are willing to invest in them, and they see it as a relationship of equals, not of one exploiting the other. That is the difference.

We know that this Government wants cheaper wages and lower quality, because the Minister of Finance Bill English has boasted about it. He boasted about it this year, saying that a way to compete with Australia was to have lower wages, and everything this Government does in employment legislation and industrial relations is about going down that path. Members opposite know that, they understand it, they are too embarrassed to admit it, and they are going to dress it up and say it is about creating jobs, but this will not create a single job, like every other retrograde measure that they have passed. It is like the silly 90-day “no rights” period that they passed. It has not added a single job. It has not added a single job, it does not stimulate demand, it does not help employers, and it just makes it harder for young people.

The worst thing, if it is possible to say that about different parts of this bill, is that if you are a worker over 20 trying to get an apprenticeship, this bill will now drive down the wages of apprentices. They are the very people who we need to be investing in. The fitters and the sparkies, the builders, the carpenters, and the instrumentation technicians are who we need more of and who we are desperate for. What does this bill do? It says it is OK to cut their paltry wages, paltry as they are. That is the insidious, nasty thing about this bill. Far from incentivising investment in young people, far from incentivising skills acquisition and investment in a new skills base, this does the opposite. It is nasty, it is evil, it is tawdry, it is shameful, and it is embarrassing. It is embarrassing to be standing in this House having to debate a piece of legislation that is so retrograde, that is so bad, and that comes from the 19th century, at a time when we thought we were making progress.

No good employer will be looking to this bill. No good employer will employ anybody under this legislation. The difference between the National Party and the Labour Party is that we will work with the good employers, the ones who are prepared to invest in young people, the ones who are prepared to invest in good jobs, well-paid jobs, long-term, sustainable jobs, and decent jobs that pay well, not employers who exploit young people. We will oppose this bill with every fibre in our collective bodies. We have got 34 of them and we will be using all of them to mount our case against this nasty, insidious piece of legislation. It is just one of many that we know are coming before this House from this tawdry, shabby, disaster of a Government.

We will oppose it, and we will be promoting an agenda of good jobs, of investment in good jobs, and of working with those sensible, good employers who know what good work looks like and who are prepared to invest in people, who want to work with the Government, work with the workforce, and work with industry training organisations to achieve just that. That is why we are opposed to this. It is bad legislation. It is grotty legislation from a grotty little Government.

I am sure it will come as no surprise to you, Mr Deputy Speaker, or to anyone else in this House that the Green Party is very proud to stand opposed to this detestable legislation, the Minimum Wage (Starting-out Wage) Amendment Bill, to lower the minimum wage for young people in New Zealand. As the party responsible for the legislation that removed youth rates in 2008, we are rightly proud in the Green Party of our track record of standing up in this Parliament against discrimination and against driving down wages to subsidise big business, and standing up for young people and their right to a good life and a fair future, including fair employment conditions and fair pay.

The reintroduction of youth rates for 18 and 19-year-olds and the unjustified extension of the training period for 16 and 17-year-old workers is a massive step backwards. We have already heard from some of our Labour colleagues some of the compelling arguments against the reintroduction of youth rates. But why should we listen to just the Opposition on this? Why should we rely only on the arguments from this side of the House when there are plenty of Government MPs who put the case against youth rates incredibly well themselves when the House last considered this issue 2 years ago? I thought perhaps we should hear from one of them.

David Bennett, who spoke earlier in this debate, has actually given one of the best speeches against youth rates that I have ever seen. He said: “The fundamental proposition this bill puts up is that we need to pay people less to get them into their first job so that they can have an unskilled future. That is what this bill essentially will do to New Zealanders. We see a different future for New Zealanders. We want those young people to get into training and skills so that they are not talking about getting the lowest-paid job they possibly can, but instead are looking to get the best-paid job they possibly can. If we can achieve that, we can make the dynamic change in our economic base that will give New Zealand the growth potential we need.”

💬 Hon Member: Who says that?

I am still quoting—he is talking about the ACT Party, which introduced the last legislation: “I think that is the fundamental point that the ACT Party has not grasped. It is looking at things in a historical perspective. Well, the world has moved on.” That was David Bennett in 2010. He is right; the world has moved on.

I want to quote another Government member, one for whom I have got a lot of respect, actually. Dr Jackie Blue, in the same debate, said: “National has not seen any evidence to show that young people are losing their jobs because of youth rates. We are not convinced that this bill will reduce youth unemployment. We should be focused on growing the economy and providing opportunities and jobs for young workers.” That was Jackie Blue in 2010. That is why the Government members oppose youth rates. I will leave it to them to explain, if they can without tying themselves into rhetorical knots, what has changed since they made those statements.

At the heart of the Green Party’s opposition to this legislation is the issue of discrimination. I would imagine that there is not one member of this House who would today stand up and say that we should have a lower minimum wage for women than we do for men, in order to make it easier and help them find work. I would imagine that not one member of this House would stand up today and say that we should have a lower minimum wage for Māori than we do for non-Māori, to make it easier for them to get into work. Some of them might think it, but I do not think there is one member in this House who would get up and say it, because it is ethically, legally, morally, and politically repugnant to this House and to New Zealanders.

We used to hear those exact arguments. We have rehearsed them in this Parliament. But thanks to some very brave, courageous, and passionate people who stood up and argued for what was right, we have finished those debates and we have moved on. Ours is a society that understands and accepts and agrees that sexual and racial discrimination in employment is not acceptable. I thought that we had taken another step forward in 2008 when we abolished age discrimination in the workplace by removing youth rates. So did David Bennett, obviously, when he told the ACT Party in 2010 that the world had moved on. Apparently, some members of the House are living in the past and they want to take New Zealand backwards.

It is no longer acceptable to argue for sexist and racist employment policies, and it should be equally unacceptable to discriminate against young workers. Let us remember here that we are talking about young people who are doing the same jobs, the same work, as their older counterparts. These are people who are employed to do exactly the same jobs as somebody else who is older than them but who will be paid 20 percent less for doing that same job because of their age.

It has been illegal to pay men and women different rates for doing the same job since 1972, under the Equal Pay Act, and it should remain illegal to pay young people differently for doing exactly the same job as older people. Their work is worth the same. They are equally valuable as employees. Really, as far as I am concerned, the argument should go no further than that. We reject illegal discrimination in New Zealand. That should be the end of the story. But, unfortunately, we have a Government that is pretty relaxed about discrimination and is even willing to overturn the views of its own members just a few short years ago to take us back down the path of youth rates, and it is using the economy as an excuse.

Let us have a look at some of the economic arguments. I start, firstly, with the regulatory impact statement prepared by the Department of Labour, which gives you a flavour of just how much intellectual rigour has gone into the formation of this policy. The officials note that the ministry has “not considered other options for achieving the objectives of the proposed starting out wage package.” The reason that they did not look at any other options is that it was a pre-election policy commitment, so “The analysis has focused primarily on how to implement decisions that have already been signalled by Government.” There is no analysis of whether they are actually a good idea, no analysis of whether there might be better ways to address the problem of youth unemployment. It was a preordained conclusion.

The regulatory impact statement also notes that “Consultation on the proposal has been limited. The Ministry has not consulted with external groups such as the New Zealand Council of Trade Unions and Business New Zealand. The analysis has also been constrained by the relatively short period of time in which to undertake the analysis.” So there you go. That is the intellectual rigour. That is the economic analysis behind this proposal. It was a preordained conclusion with pretty much no basis. But what we do know from the unrelenting and unpalatable rhetoric from the Government side of the House is that the Government has an unrelenting focus on work, and it wants to see young people off welfare and into work or training. We know this. We have heard it time and time again.

The solution you would imagine, if you wanted to get people off welfare and into training, would be to create jobs and training opportunities for young people. But that is not what this Government has done. Oh no. It has decided instead to give businesses a massive subsidy in the form of absurdly low wages in an attempt to make young people more attractive to employers. So how is it going to do that? Well, it is easy. It has made young people incredibly cheap to employ. On the poisonous starting wage of $10.80 an hour it makes young people very cheap indeed to employ. They can employ them for 3 months and pay them $10.80. And then what are they going to do after that? Well, that is easy too, because they have a 90-day trial period they can take advantage of—another attack on young workers by this Government. So they can simply replace young people with another cheap young person on $10.80 an hour.

As Kay Brereton from the Beneficiary Advocacy Federation of New Zealand has pointed out, the result of this is going to be that taxpayers end up subsidising young people’s low wages, and instead of creating new jobs, employers are going to have an incentive to churn through young employees to keep the wage bills low. So they will not be creating new jobs, in fact they will be creating the same job every 400 hours or every 6 months, whichever comes first, over and over again.

As this Government so eloquently argued in 2010, the solution to youth unemployment is not to scapegoat young workers. It is not to pay them less or to discriminate against them and worsen their prospects. The solution is education, skills training, and job creation. But what kind of incentive is it to pay young people, including independent 18-year-olds and 19-year-olds, so little? Every young New Zealander deserves a good life in a fair future, but you cannot have a good life on $10.80 an hour. You just cannot, and you cannot have a fair future when you are discriminated against from the moment you enter paid work. That brighter future, which this Government is so fond of referring to, is clearly not intended for young people.

Andrew Little wanted to talk about failure. Well, I want to tell the House about failure. Failure is seeing 9,000 young people end up on the unemployment heap, when that party opposite decided it wanted to scrap youth wages. We saw 9,000 young people not being able to enter the job market, because of the changes that that party over there made to make it difficult—make it harder—for young people to gain employment.

This bill, the Minimum Wage (Starting-out Wage) Amendment Bill, is all about giving young people more opportunities. It is all about giving young people more opportunities to get a foot in the job market. It is all about giving young people the ability to get some experience to become more competitive in the job market, and to get some jobs, because we know that leaving young people languishing on the unemployment heap is absolutely unacceptable.

We know that if young people are out of school, out of work, or out of training for the majority of their teenage years, then there is a 90 percent chance that they are going to end up as long-term welfare beneficiaries, and being a long-term welfare beneficiary has a whole lot of other problems that are more difficult for them to overcome in life.

We know that getting them into training, or getting them into jobs, or keeping them at school is an absolute priority. So this bill is all about helping them in the job market. This bill is all about giving them an opportunity to present themselves in front of employers with a competitive edge, and giving them something so employers will consider taking them on, because we know that if a 16-year-old and a 26-year-old front up before an employer, obviously the employer is going to choose the candidate with the greater experience. But if we give the employer an incentive, through a starting out wage, to take a chance on the younger employee, to look at that younger employee and say “Here is an option for employment.”, and to give them a chance, give them a “go”, and give them the experience, then that young person gains that experience, and gains the opportunity to get a foot in the job market.

We know that the Opposition actually has a very poor track record on jobs. [Interruption] Andrew Little, you should listen to this, because your party has a very poor track record. Your party saw 9,000 young people end up on the unemployment heap. Your party opposed 13,000 jobs being created through the 90-day trial, and we know that the minimum wage changes that the Labour Party wants would see 6,000 people end up on the unemployment heap too.

We are actually about creating more jobs. We are actually about giving New Zealanders more opportunities—more opportunities. We have created over 50,000 jobs in the last 2 years, and we have got another 150,000 jobs to be created in the next 4 years. The only thing we hear from the Opposition is more policies to make it more difficult for employers and employees to meet together and create employment.

This bill deserves the recognition of the House. This bill deserves to be passed through the House, because there are young people out there—young people out there—who are crying out for jobs, and young people out there who are desperate to get a foot in the job market. They know times are tough. They know that it is difficult out there for employers. They know that the 90-day trial has helped them a lot, but they need a little bit of something else, and they know that this bill will help them further. This will help young people get off the unemployment heap. Young people with a steady work history, like all employees, are seen as less risky for employers to take on, but if they do not have that work history, it is more difficult for them. This bill will enable them to get more of a work history and more ability to get through the door.

The only options, the only alternatives we are hearing from the other side, Labour’s solutions to the so-called crisis out there, are more inflation and—the other solution—printing money. They want to join up with the Green Party to print more money because apparently they think that is going to create more jobs as well. They think taxing people, taxing capital, will help employers create more jobs. They are absolutely crazy if they think taxing capital is going to do that. Their other big solution is to go back to the 1970s with industrial relations awards. That was their policy at the last election—another way, another backwards step to make it more difficult for employers to create jobs; to make it more difficult for the economy to create jobs.

We are creating jobs in the economy. This will help young people. They can yell, they can scream, they can moan about it, they can say whatever they like, but the reality is that the statistics show that 9,000 young people left the employment market. This will give them more of an opportunity to enter back in, get a foot on the ladder, get more experience, and become long-term employees. This is a good piece of legislation. I look forward to it being passed through its first reading and hearing it through the select committee. Thank you.

I rise on behalf of New Zealand First to speak against this abominable piece of [Interruption]—well, it is hard to say, really. You know, sometimes it is hard to believe that the MPs who prop up this National-led Government live in the real world—particularly after listening to Jami-Lee Ross—especially when it comes to the wages paid to the ordinary working folk of New Zealand. Since 2008 there has been a steady attack on the rights of workers, with policies by this Government thinly disguised as “pro-jobs” or some other spin-doctored euphemism. The minimum adult wage of $13.50 an hour is apparently, according to this Government, hindering employment opportunities for the young. So a lower rate of $10.80 an hour for teenagers starts next April.

The Government says this will create 2,000 new jobs over 2 years, but the problem is that the latest household labour force survey showed that 61,700 15 to 24-year-olds are unemployed, and that is up from 41,100 4 years ago. So under the stewardship of Messrs Key, English, and company, there has been a 50 percent increase in youth unemployment, but they will create 2,000 new jobs over the next 2 years by reducing pay rates. That is the sort of twisted logic generated by fat cats, the unscrupulous, who believe they can wallow in their wealth off the backs of hard-working young New Zealanders. Nobody minds a successful individual enjoying the results of hard work and ingenuity, but most New Zealanders believe in the concept of a fair go. But not this Government—oh, no. The minimum adult wage of $13.50 an hour amounts to about $540 a week, and that is about $455 in the hand. This is a low wage, but many people are still losing their jobs as under this Government the economy continues to spiral downward. When National came into office, it gave tax cuts to the rich and it increased GST. The Westpac boss, on his multimillion-dollar salary, got a tax cut of $5,000 a week in the hand. We in New Zealand First do not believe this is fair, but at least it clearly shows which side this Government is on, and it is not on the side of those people who are earning $13.50 an hour and it is certainly not on the side of those young people who are soon to be earning $10.80 an hour. Fairness aside, if we combine these cuts, shall we say, with the job cuts such as those in KiwiRail, the Inland Revenue Department, Solid Energy, and it goes on, it begs the question, how does this Government make any money? How does this Government make up for lost taxes? When we then add a low-wage system into the mix, it becomes obvious that this Government is creating a future with a serious shortfall of taxable income because of a low-wage mentality, declining birth rates, increasing longevity, and a complete lack of fiscal prudence or responsibility.

The economic model that this Government subscribes to clearly is not working, does not work, and will not work. This Minimum Wage (Starting-out Wage) Amendment Bill is a lamentable piece of legislation and if the Government thinks this will in any way create some sort of economic nirvana, or contribute as a panacea-type cure for our economically distraught country, then think again. In fact, it should wake up and slap itself for even dreaming about it. It is plunging this country into a low-wage economic downward spiral.

You know, last night this Government had the opportunity to show an intelligent democratic face to the people of New Zealand. It had the opportunity to take Winston Peters’ member’s bill—the Reserve Bank of New Zealand (Amending Primary Function of Bank) Amendment Bill—which would have provided an essential tool to help our country get out of its economic malaise, but, no, that bar was too high for this Government. Here was a tool where, correctly used, we could put a floor and a ceiling on the New Zealand dollar, devalue by 15 to 20 percent, and reinvigorate the manufacturing sector. That means getting back those 40,000 jobs that this Government has lost. We could weight our dollar to our major trading partners to give it relativity, and that would be relativity for our exporters. The floor and ceiling would give surety and confidence, and we could export our way out of this mess.

There would be light at the end of the tunnel—you know, the light that this Government turned off with its narrow-minded course of austerity, the austerity that is driving thousands of New Zealanders across the Ditch, looking for jobs in Australia, and the type of austerity that is strangling our economy here in New Zealand. This Government demonstrated a complete lack of comprehension of that bill last night, because National members started waffling on—along with that turned-out prehistoric alligator skin that sits over there somewhere—about printing money, when the bill had nothing to do with that. But such is the comprehension or lack thereof of this Government when it comes to fiscal responsibility and the economy.

A lot of people have forgotten that it was Winston Peters who saved—[Interruption] Jami-Lee Ross should be listening to this because it is important that he understands that when the Asian crisis hit, it was New Zealand that saved Asia. Winston Peters, on behalf of New Zealand, guaranteed the Korean currency pro rata with Australia and the USA, and it saved Asia. A lot of people do not even acknowledge that. We should perhaps look to history. Last night this Government turned its back on the opportunity. It turned its back on the exporters of this country. It turned its back on the manufacturers of New Zealand. It turned its back on democracy. A great bill could have gone to the select committee, and we could have heard submissions, but, no, spray and walk away.

We in New Zealand First realise that the Government’s role is not to be the solution to all problems, but it should play an essential role in promoting economic growth, job security, and fairness for all segments of society. Where in this bill is there reference to apprenticeships or recognition of new skills and competencies? This bill will be just a recycled course for cheap labour. Perhaps it is the cycleway that this Government has been promising us, but it is a recycled way for cheap labour. Just as the New Zealand public did not believe that larger classes would make their children smarter, they do not believe that cutting wages will make the economic boat go faster. Thank you.

As always, it is a pleasure to take over from Brendan Horan, who has just finished speaking—albeit that he did have a bit of a dampener on his own speech towards the end. In fact, you should always avoid raining on your own parade.

I must say, having listened to the speeches, as I stand to speak in favour of the Minimum Wage (Starting-out Wage) Amendment Bill, that I have been disappointed to hear the speeches from the other side. Talk about dampening their own ardour. This bill should be something that they support.

💬 Andrew Little: What would they say in Glasgow?

Why is it that is all we hear from Andrew Little, a nice person in every other way—I am left wondering whether it is just paid-up trade unionists who warrant Labour’s support, rather than job seekers. This is a bill to assist young job seekers. I can well remember when I got my first job that I was delighted to get a job. It was a pretty straightforward one—once a week helping a stallholder pack up his stall. I was delighted to get going. This bill gets young people on the first rung on the job ladder. This is a bill that addresses real problems and creates real opportunities for people who are not locked in the comfort of being paid-up members of a union, with Andrew Little and the Labour Party to look after them.

This starting-out wage is a great step forward from the unpopular and unworkable new-entrant wage brought in by Labour, the party whose current composition and leadership could also be described as unpopular and unworkable, and it is demonstrating it again in the way its members speak about this bill. The new-entrant wage Labour introduced had an abysmal uptake of 2 percent amongst employers, and that is not good enough.

That poor uptake and the 9,000 jobs for young people that were lost, as we heard from Jami-Lee Ross, according to Department of Labour research, in 2008 after the Labour Party’s move to abolish the youth wage, show Labour’s lack of confidence in our young people and in the dignity of work. The people who go on to this starting-out wage will be getting more money than they would get on the benefit. Why does Labour not want them to get more money? I will tell you why: because those members like people on benefits. They like people on benefits. They like areas that are not doing terribly well. It is most unfortunate. This starting-out wage will help inexperienced workers get a foot on the job ladder, helping them set themselves up for meaningful employment. Everyone of that age on a benefit will be better off on the starting-out wage.

We heard from Minister Ryall how it will be better for their health. That is a reality. It is not made up. I listened to Holly Walker. I was disappointed that there is some sort of virtue assumed in opposing this bill. It is a very positive bill. It will help the very people whom Ms Walker is espousing to help, without helping. She is virtually saying that you are better off being on the benefit, because then we can feel sorry for you.

The National Government is committed to creating an environment that encourages economic growth and employment, both of which this policy actively promotes. But it is not only this bill that promotes a more prosperous and encouraging employment environment; the starting-out wage should be seen as part of the wider package of initiatives to help young people into work. These have already been mentioned by other speakers on this side of the House. Let us talk about them a little bit more: the 90-day trial period, creating more than 13,000 jobs; increased flexibility in the Holidays Act, and goodness knows why that was opposed by Labour; the Government raising the minimum wage every year with a balanced approach; and so it goes on.

Let me close by saying that we have heard much hyperbole and uniform negativity from the Opposition around this bill. It is negativity that reminds me of something those members seem to be forgetting: we, as slightly older people, should not be afraid of the ambitious young; we should be encouraging them, and that is what this bill does. Thank you.

It is disappointing. We are in the middle of a crisis in this country. We need change, and this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, is as good as it gets from the members opposite. This is all they can do: cut prices on wages. All they have got in them are failed 20th century policies and no creative 21st century solutions for the very real problems we face as a nation.

What we have heard from the members opposite today can be described only as astonishing. The last speaker, Mr Auchinvole, the member not for the West Coast, told us that this needs to be seen as part of a package that National has put together to create jobs. Well, you have failed.

💬 Mr DEPUTY SPEAKER: Order!

You have failed—sorry, Mr Deputy Speaker, you certainly have not failed. National has failed in its quest to create jobs. Let me tell you about your record—let me tell National about its record in Government. More than 50,000 more people are not in work than when you took office. Every year 50,000 people leave this country since you took office—

💬 Mr DEPUTY SPEAKER: Order!

—because you—

💬 Mr DEPUTY SPEAKER: Order!

—because National fails to—

💬 Mr DEPUTY SPEAKER: Order! You keep saying “you”.

—yes, I know—because National has failed to offer them hope. This is something that the Government has to own up to. There are currently 84,000 young people not in education, employment, or training. This is a failure by the members opposite. This is 17,000 more than when National took office. This is not something that members opposite can stand here and tell us is part of a successful package to put young people to work, because simply everything that has been tried to date has failed. There are 17,000 more. In fact, 50.3 percent of Pasifika women aged between 15 and 19 are currently unemployed. That is not something for any Government to be proud of; that is something that any Government should give pause to and reflect on what it is doing.

Then we had Jami-Lee Ross, who stood up and ranted that Andrew Little should take responsibility for the 9,000 people who lost their job as a result of Labour getting rid of the youth minimum wage. This is simply wrong. The Department of Labour’s own reports show that this is simply wrong. A report released says that by 2010 there was absolutely no change in youth unemployment as a result of scrapping the youth wage.

Let us actually deal in some facts and not in some ideology. But you know what? Even if this did work—even if it did work—this is a Government admitting failure that this is all there is for New Zealand: the low road, a competitive advantage of low wages. Well, Labour believes in something more for our country and for our people. We believe in jobs, and we believe in high wages. We believe in creating a real future for people. We do not want to join the race to the bottom that the National Government seems to want to excel in. We were told we like people on benefits. Well, actually, what we like is when people can work and there is a Government that is committed to creating jobs for them, and that is exactly what a Labour Government will do. It is not something we have seen this National Government in any way committed to.

I want to refer to some previous statements made in this House about the youth minimum wage: “… we are not convinced it would reduce youth unemployment, plus it would be a distraction from the really important work of improving productivity and growing the economy in order to create long-term jobs, which will keep young people in New Zealand.” Was it a member of Labour? Was it a member of the Greens? No, it was Paula Bennett in March 2010 in this House. Then we had Paula Bennett say when asked by Sir Roger Douglas whether she would be supporting his bill: “No, we will not be supporting the bill, as we are not convinced it would reduce youth unemployment, plus it would be a distraction from the really important work of improving productivity and growing the economy in order to create long-term jobs, which will keep young people in New Zealand.”

Well, have times not changed? Now National is not only supporting the race to the bottom and a youth rate but giving up on increasing productivity, growing the economy, and keeping people in New Zealand. Actually, the only thing that National seems to want to export are our people. It does not want to do anything to help our industries that will actually create these high-value jobs and keep people here. This bill that is before us shows the lack of understanding that members opposite have of what a modern 21st century economy looks like. You speak to any high-value manufacturer in this country, in an industry that will create high-paid jobs and keep our people here, and 15 percent is around the usual level that wages make of its costs of production—15 percent. So tinkering around with wages is not the way to help these businesses stay in New Zealand and succeed.

If you are content to have a low-wage economy and poorly paid industries, then this is the road that this Government is going down. This is not something that Labour is content to be a part of. Labour has alternatives. We actually believe in giving our young people the skills needed to take part in this high-value economy. Do you know what? We would not let 80 percent of the $42 million budgeted to give young people the skills and training necessary to take part in the rebuild of Canterbury languish there unspent while we do nothing to help our young people. What Labour would do is invest in our young people, and it would get them into work. It would not come up with micro schemes that do very little to address the fundamental problem that we have: 84,000 young people who are not in education, employment, or training. The legislation that we have before us today is going to do nothing to address that. It is not something that is going to fundamentally shift this.

Labour knows that in the 21st century we have to do things differently. We cannot have the disappointing failed policies of the past; we need to think creatively. That is why Labour is backing things such as instead of paying the dole directly to young people, using that as a subsidy to employers to get those young people into apprenticeships, so that they get the skills and the training necessary for them to settle here, live their lives here, and contribute to an economy that will be better for all New Zealanders. But do we have any of that kind of thinking from members opposite? No. All they can think is “Let’s make it cheaper.”—a bunch of salesmen who think the only way to fix anything is to have a 50 percent, cut-price sale and not actually look at improving things. What we have is a Government opposite that has shown that it has no ability to come up with solutions when it comes to creating jobs in this economy. All it has presided over is a growing dole queue and a growing queue to leave the country. There are no solutions.

This is going to be another piece of legislation that does nothing to address the problem. It is another piece of legislation that is an attack on young people. It is expecting people to live on an income that is simply not liveable. I ask members opposite whether they could live on $10.80. I ask members opposite whether, at the age of 19—and they may have had a child—they could really have supported their family. You put this together with National’s 90-day trial legislation—which members opposite have told us, you know, has been so good—but where are the jobs? There are fewer of them than when National took office. It is shedding jobs, not creating jobs.

This is a Government that has run out of ideas. It is a disappointment to all of us. It has no ability to turn things round. All this Government can do is sit there and sneer and not come up with ideas. This is a Government that needs to go back and think about how we really will back our young people in this country, because the Government opposite is failing to do so.

In King Lear, the king said “Nothing will come of nothing:”, and empty rhetoric brings about nothing. This Government is committed to activities that support young people to get off the benefit and get into jobs. You can hold and hide behind the empty rhetoric of the ideology of this Opposition, or you can get out there, like this Government is doing, and actually support young people.

This Minimum Wage (Starting-out Wage) Amendment Bill sits amongst a whole panoply of other initiatives supporting our young people: this starting-out wage, Youth Service Corps, Limited Service Volunteers, Straight 2 Work programmes, and various employment programmes. You need only to go on to the Work and Income website to see the wide range of initiatives that this Government has to bring young people to employment. And what is this Government doing now? It is adding more—a starting-out wage for up to 6 months to help young people move forward.

But what do we hear from the Opposition? We hear rhetoric—rhetoric of rights and discrimination. The Opposition says it is a discrimination. Well, we need to remind this House that not every difference is a discrimination. Boy, if it was, the Lobbying Disclosure Bill that the Greens are putting forward would be a discrimination against people who have a particular type of job. My God, I do not hear that being said.

This is a bill that is nothing to do with discrimination. This is a bill that is an opportunity for young people to get jobs. It is a further opportunity on a whole smorgasbord, a panoply, of activities that this National Government is proudly putting forward. We believe in the youth. We believe in their opportunity. Employers believe in it. We are here to back them.

This is a split call?

💬 Phil Twyford: It is a split call.

Phil Twyford.

It is sad on this eve of Labour weekend that we should be in the House this afternoon debating what I would describe as National’s great leap backwards. This is what National believes constitutes an economic growth strategy—

💬 Brendan Horan: I raise a point of order, Mr Speaker. I was just worried about the honourable member when he leapt backwards that he might have hit his head on the back—

💬 Mr DEPUTY SPEAKER: Order! That is not a matter of order of the House. Please sit down.

As I was saying, this is National’s great leap backwards, and it was particularly galling and irritating to hear Chris Auchinvole, the former member for West Coast - Tasman, opining what a fantastic policy this is. This is the former member for West Coast - Tasman. I challenge that member to go and knock on the doors of the families of the former Spring Creek miners. Two hundred - odd Spring Creek miners recently lost their jobs because of this Government’s monetary policy. I challenge Chris Auchinvole to go and knock on the doors of those families and explain to them that driving down the minimum wage is an acceptable way to manage this economy and build opportunity. Go and knock on the doors of those families and tell them that working for $10.80 an hour is good for them and good for their families. Do it, Mr Auchinvole. Do it, and come back and report back to this House, and tell us what those miners said, because I would be very interested to hear what they said to you.

What a disappointment—what a disappointment—this Government has been to New Zealanders. It came to office by saying that it was going to reduce the current account deficit. It was going to manage the economy back into growth. It was going to reduce the number of people migrating to Australia. It was going to reduce the wage gap with Australia. It was going to build more jobs. And what have we seen? We have seen defeat and failure on every single one of those promises. This Government has taken New Zealand backwards.

Nothing illustrates the absolute poverty of ideas that characterises this Government more than its bringing this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, to the House. This is a party that only a few years ago declared that increasing the take-home wages of New Zealanders was its top priority. It comes to the House this afternoon with a bill to legislate down the minimum wage, to deliberately cut the amount of money that New Zealanders take home in their pay packets. It is unbelievable. Those members’ idea of stimulating growth is taking away the workplace rights and the livelihoods of New Zealanders. We saw it with the 90-day fire-at-will bill. We saw it with this Government’s willingness to trade away our employment law and people’s rights at work to Warner Bros, and now we see it with a legislative cutting of the minimum wage. Those members are bankrupt of ideas. They have got no idea. They have given up on any attempt to grow this economy and grow the prosperity of New Zealanders. A couple of days before Labour weekend, on a day when it is increasingly clear that one of our finest manufacturing companies is going to be sold into foreign ownership, this Government has given up. This bill is the best it can offer New Zealanders to grow the economy and improve the livelihoods of New Zealanders.

What kind of perverse logic is it when you legislate the cutting of wages for one of the most vulnerable groups in our society? As Andrew Little said in an earlier contribution to this debate, jobs are created when employers have business confidence, when they believe that there is a market for their products, when they have certainty, and when there is work to be done. There is no way, and it is not credible to suggest, that cutting the minimum wage from $13.50 an hour to $10.80 an hour will create jobs.

This bill will not hurt just young people. By blowing a hole in the minimum wage, what it will do is have a depressing effect on the wages of all low-paid workers in New Zealand. It is bad for young people. It is discriminatory and unfair. It will contribute to the growing sense of hopelessness that is driving thousands and thousands of our young people across the Tasman.

What is worse—worse—is that it undermines all the effort that has been put into raising the productivity of New Zealand firms and New Zealand industry. We know that New Zealand employers are addicted to low-paid labour. That is why they do not invest in capital, plant, and technology to drive innovation and productivity, and this bill makes that situation worse. This country is hungry for political leadership that will raise incomes and grow the productive economy. This bill does the opposite of that, and Labour will fight it every step of the way.

I feel a tad weary standing here this afternoon to talk to this bill, the Minimum Wage (Starting-out Wage) Amendment Bill. It is another bill that demonstrates a lack of understanding of the hardship in our communities, and it is based on an economic vision that seems almost Dickensian to me. This is another bill that seems to be part of this Government’s drive towards a low-wage economy, this time directly targeting young people.

My colleague Holly Walker, as well as David Bennett, Jackie Blue, and Paula Bennett have all spoken so eloquently on the real evils of this bill, so today I would really like to just tell a story that I was told recently of a young woman who lives in Hamilton, because I think it is quite informative, and I hope everyone in the House listens.

This young woman is Stephanie. She is making a living—or trying to make a living—by cleaning. She earns what is soon to be the adult minimum wage of $13.50 an hour. Like many other young people she is underemployed, but she is working really hard to stay off the dole. At present she works 25 hours a week, and to work these hours she has to travel from site to site in the evenings to do her cleaning work. She has been trying for a year to get more hours of work or to find a second job, but, as everyone knows, in this labour market and without access to a computer, when you are new to a city that is really hard.

For 25 hours a week at $13.50 an hour she gets $337.50 before tax a week to pay her bills. Out of this she has been able to pay the rent for her small flat, power, food, and a prepay cellphone. There is little left over to save for emergencies like she faced earlier this year. After a year of cycling from site to site—a good green young woman—her bike broke, and it was going to cost her $90 to fix it. This meant that she had to walk from site to site while she saved to fix it. How responsible is this young woman? She is amazing. But, you know, there are consequences of that—two pretty big negative ones. One is that quite often at night while walking she would get harassed by men driving past her, which is a pretty scary experience for a young woman in a new city. Secondly, she wore big holes in her shoes, so big that it was not safe to wear those shoes to work, and she knew that if she did she would get turned away from her job.

Does this remind you of Dickens, or not? Stephanie was forced to make a choice. She had to get new shoes so that she could work, and this meant not paying for something. I would like to ask everyone in this House what you would give up to pay for those shoes. This is a young woman in work whose income, if this bill goes through, will be significantly lower than that. Somebody who is having to give up food or paying for her power to pay for shoes to get to her job—that is what we talking about with this bill.

I think the question before this House should be: how can we better support young people to actually be able to live their potential and work, and be able to have a life as well as that job? If low-wage work lifted people out of unemployment and into well-paid jobs, hey, we would be fine with this, but the evidence shows that it does not. For the member across the House to say that “They are better off than being on a benefit, so really, hey, that’s great.”, is treating them as if they are charity cases rather than workers. It is saying that they should be grateful for a job and take whatever they are given. That is offensive.

If this Government was serious about addressing youth unemployment, then there are lots of things it could do. It could reverse the 2010 tax switch, which cost $2 billion in just over 18 months. It could put this money into supporting small and medium sized enterprises to take on young staff, create jobs, and it could support the member’s bill that was drawn from the ballot today; a Labour member’s bill about committing to a high-wage economy and supporting young people’s employment rights.

As this debate on the first reading of the Minimum Wage (Starting-out Wage) Amendment Bill draws to a conclusion today it has been interesting to sit here in the Chamber and listen to the stark contrast between Government speakers and Opposition speakers in terms of a glass half-full or a glass half-empty type of approach. On this side of the House we have been promoting optimism, opportunity, hope, and collaboration between young people and employers, and an opportunity to give them something they want in terms of getting that first step on the ladder of opportunity that goes with being in employment. On this side of the House we understand the virtue and the benefit of work, of good, honest, decent work, and we know how much our young people want to be part of the employed and part of the opportunity that comes from having a job and being on the ladder of employment. In Coromandel I have young people who are welcoming this bill. They are saying “Bring it on! Bring it on fast, because we want to have an opportunity to get into paid employment.”

What Labour members are saying is that they want to keep people on the dole. They want to keep people on benefits. Christopher Auchinvole made that point so well during his very fine presentation earlier in this debate. Labour members want to keep people on taxpayer-funded benefits. They do not have any interest in getting people into work. Young people want to work, and Labour does not understand the simple motivation that work and opportunity bring. We on this side of the House support this bill with vigour. Earlier on in the debate we heard that Labour was going to oppose the bill with everything it had. In fact, what we have heard throughout this debate is a half-hearted, empty rhetoric coming from Labour members. They have not had their hearts in it. They have not got any fire in their belly. They have got no ideas, no passion, and no vigour.

In conclusion, let me just say that this is a good bill. I support it, and I am very happy to commend it to the House.

on behalf of the Minister of Labour: I move, That the Minimum Wage (Starting-out Wage) Amendment Bill be reported back to the House by 28 February 2013.

Motion agreed to.