Minimum Wage (Starting-out Wage) Amendment Bill

I am privileged to be the first to stand, from the Labour Opposition, to strongly oppose the Minimum Wage (Starting-out Wage) Amendment Bill. I want to start by just reminding listeners and the people who have taken a great interest in this debate exactly what this bill does. What this bill does is return us to youth rates of a kind we have not seen since last century. For 16 and 17-year-olds starting out in their first job, they can be employed on 80 percent of the minimum wage. Fair enough, you may say. But the problem with this bill is that if they go on to another job while they are still 16 or 17, they can be employed on 80 percent of the minimum wage again and again and again. So the experience that they gain as young workers—even leading up to their time of being 16—at the age of 16 and 17 counts for nothing if they leave their job and go on to another job, if they are fired under the 90-day no-rights bill, and if there is no reason given, as there does not have to be under this Government’s handiwork.

What it means is that it is basically a revolving door youth rate. It is not a starting-out youth rate. If the Government were serious about starting out, it would have stuck with the provisions that were already in the bill that apply to only 16 and 17-year-olds for 3 months or 200 hours, whichever is the greater. That applies only once. So all of the arguments that have been put across the House about how this gives a young worker a chance, how they need to have time to gain experience, and so on are just rubbish because no one can convince me that someone who works for 6 months in a job at 80 percent of the adult wage, at $11 an hour, does not gain experience and then deserves to have their pay cut if they move on to another job.

We want, and the Government says it wants, to see 16 and 17-year-olds in study. We want to see them at school, at polytech, at university, or in apprenticeships. The National Party says that is what it wants to see. If that is the case, many of them will be working part-time in part-time jobs. So they will have a job in the holidays in between times. They will have a job after work, perhaps. But those jobs will be jobs that often are temporary, that do not carry on for 6 months, and so those people, those young people who are trying to get ahead by studying, will be in the situation where every time they start a new job while they are 16 and 17, they are going to have go back down the ladder to 80 percent of the adult wage.

The second thing this bill does is bring back youth rates for 18 and 19-year-olds, which we have not seen in New Zealand since last century. We have not seen them in New Zealand since last century. What this bill means is that 18 and 19-year-olds who have been on a social security benefit for 6 months can be punished for having been on a benefit by being able to be employed at 80 percent of the adult wage. We are not talking about just unemployed young New Zealanders. By the way, I need to correct Mr Banks, and I will have some other things to say about his contribution the other day. But he was talking about young New Zealanders of 15 on the dole—15 and 16. They do not get the dole. They do not get the dole. Social security benefits in this bill cover the whole gamut of them all, including the unemployment benefit, but also things like the invalids benefit, the sickness benefit, and—what is it called, Jacinda?

💬 Jacinda Ardern: The independent youth benefit.

The independent youth benefit. It covers all of those, and also young parents who are 18 and 19. So they will have been on a social security benefit. They drag themselves up to Work and Income, get offered a job, and it is at 80 percent of the adult wage. They say, under this bill: “Oh, I’m sorry, Work and Income. I cannot manage on 80 percent. I can’t manage on $11 an hour.” But what this bill will allow is that if Work and Income has deemed that job to be satisfactory on its terms—and we all know how tough it has become recently, how unfriendly, and what an awful experience it is for so many people—it can then say to that 18 or 19-year-old: “Well, I’m really sorry, but you have to have a stand-down of 13 weeks.” So they get doubly punished—first of all, by dragging themselves off a benefit. Most of them will have been on a social security benefit through no fault of their own. They will have tried hard to get a job. They apply for a job, and when an 18 or 19-year-old says that they cannot afford to live on $11 an hour and they want to look for something else, they get told by Work and Income that they are being sanctioned and they are going to be punished by having a stand-down for 13 weeks.

There are other issues around this bill that have not been answered, and were not answered satisfactorily in the Transport and Industrial Relations Committee. There are all the issues around discrimination for young people, and I will put those aside for now and come back to them, perhaps, later in the debate. But on the issue of work discrimination, discrimination on the basis of employment, there is very strong advice from the Human Rights Commission that employers should not discriminate against people on the basis of their employment status—in other words, if they have been or are on a social security benefit.

What I think this Government is doing is leading employers down the garden path to believing that when someone comes to apply for a job, an 18 or 19-year-old, they will be able to ask them whether they are on a social security benefit. They will be able to ask them that because they want to be able to offer them 80 percent of the adult minimum wage—in other words, $11 an hour—and then they are able to discriminate against those workers because they are able to find out the information and then the worker can say: “Well, I’m sorry, but I don’t want the job.”, or the employer can say: “Well, I’m sorry, I don’t want you, because we don’t want people who have been on a benefit.” There are real privacy issues involved in this that have not been satisfactorily answered.

My question to the Minister in the chair is why we are doing this. Well, I think we know the answer to that. The answer is that the National Government has no ideas about how to address our crisis in youth unemployment. Two years ago David Bennett, that member over there, stood up in this House and passionately opposed youth rates. There is a bookload of quotes from him about how they were inappropriate, and I am looking forward to reciting them. We even heard from Simon O’Connor some quotes from the Catholic Church. I know the Catholic Church talks about the dignity of work and about respect, and the dignity is about the way people are treated and how they are rewarded for their work. It is not about just having a job.

💬 Simon O’Connor: It was Mr Little who was quoting Pope Francis—your colleague behind you, the one smiling. He quoted Pope Francis.

And you quoted it back, Mr O’Connor—you did.

💬 Simon O’Connor: Rerum Novarum—you should read it.

Yes, that is right. I have got many. I have read at length the various encyclicals of instruction from the Catholic Church, because I have been engaged in having those debates with the Catholic Church about their workers over many years. But the Catholic Church and the church generally does not support the dignity of work if it means people are not fairly rewarded for their work, are not fairly treated, are not able to earn a living, are not able to build a decent life, and are not treated with respect. That is what this bill does.

The other excuse is that this is somehow going to create jobs. That is the other excuse. As my colleague Andrew Little has so rightly pointed out, cutting wages does not create jobs. There are no jobs unless there is work to be done. Employers do not take people on as some kind of beneficiary. They do not do it out of the kindness of their hearts. They do it because there is work to be done. And the workers who come along and do that work have a right to be respected and paid properly, rewarded properly, for the work they do.

This bill not only will impact on 16 to 19-year-olds but also will impact on older workers. I have had many of them express concern to me about creating a market of young workers who are cheaper, who are on $11 an hour, and who will displace older workers. Indeed, that has happened in the past.

The worst thing about this bill is that we have tried these methods before in New Zealand. This is not a new idea. In fact, it is a very, very old National Party idea. It is a very old ACT Party idea that if you cut young workers’ wages, it creates jobs. Just go back to the last time we had real youth rates in this country, in the 1990s. When youth rates were $4.50 an hour, when people were getting paid $4.50 an hour, we had some of the highest youth unemployment that we have ever seen in this country. So this bill is not going to deliver on its stated aims.

It is an absolute delight to be called, thank you very much. I spoke on the Minimum Wage (Starting-Out Wage) Amendment Bill on Thursday last week, and I drew the attention of the House to my first experience in the labour market. I outlined the excitement I felt when I went downstairs and my mum had bought a new Kingfisher Briggs and Stratton lawnmower. It was the first step of my becoming self-sufficient and learning to save, and learning the value of work and the reward one can achieve from work, not just financial but spiritual, and the dignity therein.

The next job I had was with Mr Brown on his milk round. We would get up at about 4.30 in the morning—and I must say, it is no easier getting up at 4.30 in the morning now than it was then—meet up with the truck, and then we would get the trolleys out, load them up with the crates and the bottles in the crates, and we would hurtle around the streets of Westown picking up tokens from the bottles, money sometimes, and delivering them for the full bottles. I must say I have a certain amount of nostalgia for the fact that we no longer get milk at our front gate, but there we go.

It is all about the dignity of work and this is what the Minimum Wage (Starting-Out Wage) Amendment Bill is all about. It is about giving young people—young people who may be entering the workforce for the first time, lacking skills, lacking experience, or may be coming off a benefit, or undertaking an industry training course—an opportunity to get the foot on the rung of the employment ladder. It is an opportunity for them to get their feet on the rung of the employment ladder. This is the ages of 16 to 19. Why are we doing this? We are creating an environment that encourages economic growth, more jobs, and higher wages. We know that there is a plethora of research, particularly from the UK, about the benefits of work, the health benefits of work. There are a number of studies that have come out showing that work is extremely beneficial to one’s physical health and one’s mental health. Work is good for health.

We know that long-term periods of unemployment lead to a host of bad outcomes, and where better to intervene but with our young people. This is why we believe that the Minimum Wage (Starting-Out Wage) Amendment Bill is a very good piece of legislation. It is very interesting that Labour replaced the youth minimum wage with a so-called new entrants wage—that reminds one a little bit of infant school, does it not—which provided the same rate of pay as the starting-out wage. You may think that that is interesting and ask why Labour members are opposing it now.

💬 Jacinda Ardern: For how long?

It lasted for 3 months, in answer to your question, or 200 cumulative hours. The feedback we have had from employers is that it was not long enough, that it is too complicated, impractical, and the 3-month period is too short. So, apparently, feedback from employers suggests they need to calculate a new worker’s entire work history on the new entrants wage before hiring them under its conditions. How many do we think use it? Very, very few. So although Labour’s policy provides the same rate of pay as the starting-out wage, the conditions are unworkable, virtually, and unattractive for not only the employers but the employees.

Just to recapitulate, the starting-out wage will be set at 80 percent of the minimum wage, and it is available for 16 to 17-year-olds in their first 6 months of work with a new employer; 18 and 19-year-olds can also benefit from this starting-out wage if they are coming directly off the benefit that they have been receiving for 6 continuous months; also the benefits can apply to 16 to 19-year-olds in training in a recognised industry training course involving at least 40 credits a year. This is a reduction, as you may recall, of 20 credits from the current scheme.

So it is a very good piece of legislation. What is its possible sequelae? Well, the Ministry of Business, Innovation and Employment suggests that the starting-out wage could create up to 2,000 new jobs for 16 to 19-years-olds in the next 2 years.

What a typical approach by this Government. It has got a problem with youth unemployment. We know why it has got a problem with youth unemployment. It is because it has got no vision for growing the New Zealand economy. John Key, who decried 25,000 teenagers being out of work in 2008, his big achievement has been to increase the rate of youth unemployment by a further 5,000—to 30,000. If you take the people who are 20 to 24 years old, make that another 90,000 young people out of work. And what is this Government’s answer? What is its vision to deal with unemployment? Its vision is to cut the starting rate for 16 and 17-year-olds and some 18 and 19-year-olds by 20 percent. You know what these people in the National Party are proposing. They are proposing that young people working at the same rate, with the same productivity, doing exactly the same job in exactly the same way as an older person can be paid $11 an hour—$11 an hour!

💬 Simon O’Connor: So experience means nothing?

That is not even enough for the member over there to pay for his gin and tonic at a local bar, and he wants young people to live on $11. Why, I want to know from that member, should a teenager making hamburgers in the same way at the same rate with the same efficiency as a 25-year-old be paid a whole lot less? Will that create new jobs? No, it will not. The evidence is there that it will simply displace older workers who are currently doing the job. So the poor guy, or woman, who is older and working, making those hamburgers, is not going to have a chance, because the boss is going to sack them or not employ them in the first place in order to get cheap labour at $11 an hour—$11 an hour!

Will this work? Well, let me quote the authority, the Minister for Social Development, if you can call her an authority. She opposed youth rates just 2 years ago. This is what she said: “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.” That is what Paula Bennett, Minister for Social Development, was saying 2 years ago about Roger Douglas’ bill. So what is with the change in mind? And Jackie Blue: “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.” How is that for hypocrisy: against youth rates one day, and for them the next? And why are National members for them? It is because they have run out of ideas. They have no vision for New Zealand other than it being a low-wage economy.

What is the problem with New Zealand? Why did we lose 53,000 New Zealanders to Australia last year? It was because the jobs are not in New Zealand and because we have low wages. So this Minimum Wage (Starting-out Wage) Amendment Bill is a bill to increase the flow of Kiwis across the Tasman, so they can put their energy and their taxation into the Australian economy. This is a Government that has no vision about creating jobs. This is a Government that has no vision about upskilling New Zealanders for high-paid jobs. Why is it that the number of apprenticeships is down 20 percent from when this Government got into office—down 20 percent? Why is it that in one Budget it slashed $53 million out of the skills training budget? Why is it that in Christchurch on Sunday, on St Patrick’s Day, the bars were full of Irish workers, imported to do the work because this Government had no plan to upskill New Zealanders to rebuild Christchurch? That is an absolute disgrace—an absolute disgrace. This is not only counterproductive, because it is not about increasing skills and increasing jobs, but also unjust and unfair.

What this Government is doing is saying that young people are out of work because it is their fault, we are paying them too much; not that they are out of work because this Government has failed utterly in its economic management. So what does it say? It says: “We will put our young people on $11 an hour.” That is a bit rich coming from those people, the Cabinet Ministers and MPs who gave themselves a big fat increase in income by cutting the tax rates for the top income earners. That is unfair. It is not on that this is a Government that will reward the most wealthy people in the country but will continue to hit the people who are at the bottom of the heap.

Why is it that Lesley Longstone is getting $1,000 in severance for each day she worked—$425,000? That is what it will hand out to the people at the top: $425,000 of New Zealand taxpayer money given to Lesley Longstone because Hekia Parata could not get on with her. So it will reward the rich. Why is it that Don Elder, the former chief executive of Solid Energy, right now retains his salary at a rate of $1.3 million a year while he is at home doing the garden? The Government will reward the rich, but its answer is always to cut the income of people at the bottom.

So the brave new world for the National Government is to have our young people leave school and go out to work at $11 an hour. That will not solve the unemployment problem amongst young people. They know that. The last speaker from the National side, Cam Calder, said that the bill will create 2,000 jobs for 16 and 17-year-olds. What he forgot to tell the Chamber was that it takes 2,000 jobs away from the people who are 20, 25, 35, or 45. This is about job displacement. This Government has no ideas about job creation. It brought in the Youth Guarantee scheme. That was going to get lots of people into jobs. I saw a withered pumpkin that was produced under one scheme. This Government wasted millions of dollars on a scheme it then scrapped. It talks loudly about the Limited Service Volunteer scheme. That has its good aspects, but the truth of the matter is that 40 percent of the young people going on to that scheme go back on to the benefit and go back into unemployment. What this country needs is a genuine answer for upskilling our young people, so that we can be an innovative, high-growth, high-skill, and high-tech economy. It does not need a Government that says the answer is to force wages down to $11 an hour, and that is what it is doing.

This Government has no ideas. We had a job summit. Remember the jobs that were going to be created out of that? That was 4 years ago. Where are the jobs? [Interruption] Let the next National speaker rise up on his or her hind legs and tell us how many jobs were actually created. Do you know, Mr O’Connor, what the answer is? Fewer than one in five of what John Key promised. It was a job summit that was about rhetoric. It was not about creating jobs. Now, in desperation, the Government comes to the Chamber and says: “If there’s youth unemployment it must be the young people’s fault, and we will hammer them.”

There is one thing in the legislation that I will support, and that is Darien Fenton’s Supplementary Order Paper 193, which talks about lifting the minimum wage to $15 an hour. Why would I support that? Because it is wrong that 40 percent of the kids living in poverty in this country right now come from working families—40 percent of the kids living in poverty come from working families. I have got an electorate full of people where mums and dads take it in turns, they do shift work, one goes out during the day and one goes out at night, and they cannot produce enough income on the minimum wage they get paid—including cleaning those members’ offices—to have a living wage.

I grew up in a New Zealand where people said that if you do an honest week’s work, you get a living wage for that week. I want one member—one member—of the National Government to stand up and say why people working hard, doing an honest week’s work are not entitled to a living wage. I want one member to stand up and say that he or she could live on $13.75 an hour, which is the minimum wage. It is not a living wage. Most particularly it is not a living wage in the city that I represent, Auckland, in Mt Roskill. That money does not give you enough money to feed your kids properly, to clothe them, and to give them the opportunities that most other kids have. Why is that at my low-income schools some of the kids have never got to the beach? They have never been away on a holiday—that is asking too much. Mum and dad cannot afford even to put shoes on their feet. And this Government says: “We’ll pay them $13.75 an hour—but, hang on, if you’re a young person we’ll pay you $11 an hour.” How generous! What a decent Government! What a Government, which can reward itself with big fat tax cuts, but cannot give people a living wage, and which now says that the answer to youth unemployment is to cut the wages of those young people doing the same work as the people next to them—

I think the previous member, the Hon Phil Goff, was following the philosophy that if you say it loud enough it must be true. He also alluded to the fact that this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, is a disgrace. I will tell you, Mr Chair, what is a disgrace.

The CHAIRPERSON (H V Ross Robertson): Order! Do not bring the Chair—

I am telling you, Mr Chair, what is a disgrace. What is—

The CHAIRPERSON (H V Ross Robertson): No, no, you must not bring the Chair into the debate.

I will say to members and also the Chair what is a disgrace, and that is making members of the New Zealand public beholden to the Government to ensure that it can make its way to the next election and secure itself a place on the Government benches. That is what happened across 9 years of the Labour administration.

We have also heard words coming from the other side about punishment and about discrimination. This is not a disgrace, it is not punishment, and it is not discrimination. This is about creating opportunity. If you go out there and talk to employers, they will tell you that they want to employ young people. But they will also explain that when you consider the total remuneration of any employee, it is not about just the hourly rate. It is also about sick leave, it is also about annual leave, and it is also about ACC levies. When you consider all of that in the mix, there are a number of businesses that simply cannot afford to take on a young person who has low skills and a lack of experience, and, arguably, there is a disconnect between them and what is required by the employer. That has cost some 9,000 jobs since 2008, when the youth minimum wage was removed—over 5 years a 42 percent reduction in the number of 15 to 19-year-olds in employment. That is what is a disgrace here.

What this bill sets out to do is actually challenge that and find the settings that will marry employers and employees back together, in particular those in the youth area, who, we know, if they do not find their way at that age into some form of training or meaningful employment have a very high likelihood at the age of 18 of transitioning on to an adult benefit and likely staying there for some period of time.

This bill is specifically aimed at ensuring that employers have the settings that they need to take a chance on the young person. Certainly even yesterday in my constituency office two people came to me literally pulling their hair out, wanting to employ local people, in particular young people, and give them a chance. But they cannot get those young people. They cannot get those young people, because those young people are disconnected from a work ethic. They are disconnected from the sorts of skills—[Interruption] This is what they are telling me. If those members want to come and sit in my electorate office and listen to employers in Northland who want to employ young people, local people, they will hear this for themselves. Those young people are disconnected from what employers need. It is not that the employers are not trying to reach out to them. This bill is about providing the appropriate incentives and platform for employers to seek out those opportunities with the young people. It is not compulsory; it is an arrangement between the employer and the employee, and it is over a 6-month period.

We have heard comments about the fact that this will displace other workers. Well, I can also tell you that employers very quickly identify the value in an employee, and those employees are valued by the employer. There is an intrinsic relationship in a successful business between the employer and the employee. Good employees who show initiative, who are given a chance, and who demonstrate ability advance their way through that business. The business relies on good employees. So this is not about displacing; it is about providing opportunity and an entry point. That is the distinct difference.

But time and time again we hear, in particular from the Labour Party, that this is about punishment, it is about discrimination, and it is disgraceful. Well, it is the entire opposite to those things, because when members here actually take the time to step out from behind their parliamentary desks and talk to employees and employers, what they will find is that it is about providing the opportunity and backing these young people and giving employers a chance to see whether or not those young people can make the grade. It then goes to the employee to show that they can, but they need the chance. Nine thousand jobs across 5 years is unacceptable.

We seem to have this attitude that we are a benign country, that we love our kids, that we will help our kids. But, actually, what we are hearing from this Government and with this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, is that we will not. What we are hearing with this bill is that we think our young people are worth less than others. With this bill we are saying that young people are worthless. Mr Sabin, who just spoke earlier, actually said that he has heard that young people have no skills—they have no work skills. Well, if that was the case, then they would not be employed in the first place—no young person would be—but they are. They certainly are.

We are not investing in our young people. In these sorts of circumstances, what we are trying to do is we are trying to give them the worst starting-out work experience we possibly can. We are putting them into places where the employer has an incentive to employ them, certainly, and to pay them less than any other worker, to pay them at a wage that they can hardly live on. We are saying that that is OK if we pass this law.

Forcing young people into dead-end jobs just because they have been on a benefit is designed only to get them off the benefits so the unemployment statistics look better, when we know that the way you address unemployment is to create jobs. This bill is not going to create jobs. We have seen no evidence of that, and we have seen it in the past as well. Reducing the wages for young people does not create jobs. There seems to be no other reason for forcing the wages of young people down except to make them cheaper—except to make employers able to exploit them easier.

I find it interesting that we are doing this to young people. We are focusing on them having lower wages, but we never ever seem to attack those who are much older who are also on benefits. When you consider that we have a universal benefit that is applied to people over the age of 65, where they get 66 percent of the average wage, and that this Government never attacks that, one has to think why. I suspect that it is because those who are over 65 are well organised and they tend to vote for this existing Government, actually.

💬 Tracey Martin: Not all of them.

No, some of them do not. A lot of them vote for New Zealand First. But if you think about it, young people have as many expenses as older people. They do not eat less food. They do not use less electricity. They do not wear fewer clothes. They do not pay less for their expenses in transport. They are paying the same, so why should they be penalised?

Already, 16-year-olds, 17-year-olds, 18-year-olds, and 19-year-olds are able to be paid a training rate. We have already got that in legislation. They can be paid a training rate for a total of 3 months. This bill does not allow a sensible relationship between an employer and an employee. What it allows is for a worker to be employed at lower rates for up to 6 months with no guarantee that they will continue their employment. Then they go to the bottom of the scale again when they are re-employed by another employer, if they get another job. This opens up young people to being exploited.

We believe that if we are sensible and if we are serious about addressing youth unemployment, there is a lot more that we should be doing in terms of education and investment in youth. There is a lot more we could be doing in terms of training. There is a lot more that we could be doing in terms of getting them to a point where they are work-ready. We are not seeing that type of compassionate approach with this Government. This bill certainly does not go any of the way there.

We believe that the same work should be valued the same. We have been through this discussion before with women.

I rise to speak in this Committee stage of the Minimum Wage (Starting-out Wage) Amendment Bill in the name of the inspirational Minister of Labour, the Hon Simon Bridges.

💬 Hon Member: Eschatological—we need to get that word in.

Indeed—indeed. We can all agree that it is important that young people are given opportunities to engage in training in their chosen industry, but it is also important that young people generally are given a go. It is the New Zealand way, for goodness’ sake! But, in respect of the earlier comments that we have heard, employers have so far indicated that they are not using the training minimum wage created under Labour, and Labour really needs to consider why that might be the case.

We as a Parliament do need to address the serious issue of youth unemployment. We would be derelict in our duties if we did not. This bill, through the creation of a wage for 16 to 19-year-olds entering the workforce and coming off a benefit—that is the biggest thing of all—or undertaking an industry training course, will do a great deal towards giving people a go. Speaking for myself, I have never had to have a benefit, in terms of an unemployment benefit.

💬 Hon Phil Goff: He could be on a vicar’s stipend.

No, it is not skiting. It is—

💬 Hon Phil Goff: No, I said a vicar’s stipend. Isn’t that a benefit?

Oh, I see what you mean. I thought you said I was skiting. But the reality—and Mr Goff will know, because although I am sure he is not as old as I am, we have been through various stages of New Zealand life together at the same time. Certainly when I came to New Zealand as an immigrant, it was remarkably, well, not easy to get a job, but there were plenty of jobs and plenty of opportunities—plenty. Modern youth is not quite in the same place, so we have to work harder to give them opportunities.

We also have to provide, as this bill does, opportunities to encourage employers. I would have to say that I am disappointed with the expressions of attitude that I hear in the debate thus far from the Opposition parties, as if employers are some sort of dreadful Dickensian characters who are going to exploit young people at every opportunity. That has not been my experience in talking to employers. [Interruption] No, it really is not. When I think of the employers whom I meet on a daily basis, from one end of the West Coast - Tasman electorate to the other, they are, without doubt, proud of their staff. They actually like their staff. They have trained them after they have selected them, they have watched them develop, and they are extremely pleased to have the association with them. I would like to remind the House that this starting-out wage is voluntary. Employers and employees must agree together on whether it will apply. It will improve a currently flawed system greatly.

If we do agree—and I hope we can agree on some points—that youth unemployment levels are far too high, and that there is a need for young people to gain opportunity, experience, and reasonable financial compensation, then why is it that the Opposition arguments seem to want to match young workers fresh in vision and enthusiasm but with briefer curriculum vitaes, less experience, and more potential risk to the employer against the older employees whose experience and position are valuable and entrenched? Or do I see lurking in the mind of Andrew Little the Amalgamated Engineering, Printing and Manufacturing Union banner, which wants to protect the members of unions against the oncoming workforce that could threaten the jobs there? I cannot see it. I cannot see why Mr Goff says this is a displacement exercise to get rid of older and experienced workers and bring in young ones.

💬 Hon Phil Goff: Because that’s the experience in the past.

Well, I do not see it. I cannot imagine it happening to any great extent. There might be the odd one. But the same apprehension was voiced by Labour when we introduced the—

You know, the most disappointing thing about that speech from Chris Auchinvole is that at the end of last week thousands of young gay men and women who had never before heard of him were uttering the name Chris Auchinvole as somebody who had offered a progressive vision. This was a member who, unbeknownst to him, had trended on Twitter, when he did not even know what that meant, because of such a fantastic address that he gave. He gave hope to many young people in this country last week. And now he has shattered the illusion, because now we have seen the truth.

If there is one thing that this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, does, it is that it very accurately and very emphatically explains the difference between the National Party on the one hand and the Labour Party on the other. National is a party that does not recognise the opportunity for exploitation when it sees it, does not see it in the laws that it enacts and creates, and does not understand how the labour market in this country and, indeed, most free countries properly works. It does not understand that changing laws does not create work, and does not understand that to create work of value—of value not only to the employer but to the worker—it needs active investment, understanding, and innovation. It does not happen when you cheapen the price of labour, and there is only one thing that this bill will do, and that is cheapen the price of labour. It so happens that it will cheapen the price of the most vulnerable labour, our youngest and the new entrants to our workforce, and those who have had difficulty finding work and who even at their tender teenage years have perhaps had a period in the workforce then out of it for a 6-month or longer period and are then trying to get back into it. They are the ones who will be badly affected.

It will not create work. Phil Goff is absolutely correct. Measures like this do not create work. What it does is give an opportunity to employers to say: “Aha! Here we go. I don’t have to pay $13.75. I can get away with $11.80.” or whatever it is.

💬 Hon Phil Goff: $11.

Eleven dollars. It is not even $11.80—$11. “I can get away with paying even less, so I will.” Actually, that is the way many employers think. If Mr Auchinvole is right when he asks why employers would do this, because they value their workers—well, they will not be looking to this law. The good employers in this country do not look at laws like this, because they respect working people—

💬 Mike Sabin: It’s an option; it’s not compulsory.

—they want to pay the best, and they want to do the best. But there are employers—and it might be a surprise to Mr Sabin to know this—who will work at the edges of the law because they know they can get away with it. That is how they run their businesses, and that is the nature of their business. They are marginal businesses of low value, and they do not actually value the work people do. It may come as a surprise but there are employers like that. I know. I have met them. I met one of them once with Max Bradford, just after the Employment Contracts Act was passed. Max Bradford was shocked to find that there was an employer who told a young worker that he would sign him up on an apprenticeship if he could pay him $50 a week. I might remind members that even in 1993, $50 a week was an absolutely paltry sum. This young worker never got his apprenticeship, never got his training, but was paid $50 a week. When Max Bradford found out about that employer with me, we visited him. He was absolutely shocked. There are employers like that. They will exploit this law, and they will make it worse.

This law will do no good. It will do no good for working people—young working people. It will actually do no good for the labour market, at all. It will do no good for the good employers who are looking for good young people and who want to offer them the best but who are competing with the exploitative, the underminers, and the employers who have nothing to offer. That is the National Party approach. It is not interested in creating work. It is interested in reducing the cost of labour, because that is what its mates tell it they want. That is what its mates tell it they want. They said: “Make it easier for us. We will employ young people. Just make it cheaper for us.” Actually, the truth is that the people who talk like that and who talk to their National Party mates in Parliament are not interested in young people. They are interested just in getting a job done as cheaply as possible, and that is what this bill will do. That is why we are opposed to it. That is why we will support Darien Fenton’s Supplementary Order Papers to provide for a minimum wage of $15 and to at least take the 18 and 19-year-olds out of it, because by that time, if you are not fit for school, if you are trying to look for something different and you are in the workforce, why—by the time you get to 18 and 19—should you go backwards?

Labour is opposed to this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, and for all the right reasons. From the Labour Party’s perspective, the vision we have for New Zealand is a high-wage, high-skill economy, not this race to the bottom that is promoted by this bill by that Government.

The front page of the Waikato Times yesterday, I think, said it all, with its big banner headline “Jobless fight for work”. That was the headline on the front page of the Waikato Times yesterday, and in there it documented the very real world—not the pretend one that we hear about from the other side, from the Government, but what is actually going on out there. The Waikato Times documented that in Hamilton the Earthquake Commission has advertised 120 jobs at the Hamilton office since it opened last year. One thousand and thirteen people have applied for those 120 jobs. At the burger chain Wendy’s, which is moving into Hamilton shortly, it had 100 applications for just six management positions, and it is expecting to have 500 or more people apply for just 50 minimum wage crew jobs. The Mexico Group is moving into Hamilton. These are not exciting jobs, by the way. This is not the brighter future that that Government promised. These are all minimum wage jobs. Two hundred people had applied for 25 jobs at that restaurant in Hamilton. That restaurant is going to be opening next month.

That is the real position that is happening out there. Small numbers of minimum wage jobs are becoming available, and large numbers of people are lining up for them. It is in that environment that this National Government decides that the best thing to do for the future for New Zealand is to lower wages, and to lower wages for 15 to 19-year-olds because it does not believe in that group. The Government has actually given up on 15 to 19-year-olds. It has given up on them in terms of their being able to do a good job at a decent rate of pay. What this bill says is that the Government does not believe that those people, those 15 to 19-year-olds, are up to a decent wage. It believes that those people need to have a law put in place that actually lowers their wages so that they can get an opportunity. It does not believe in young people.

Government members have also given up on arguing, as they did just last week in this House, that this bill creates jobs. Of course, it is ridiculous for them to even have pretended—as the Minister of Labour, Simon Bridges, did last week—that this piece of legislation somehow creates jobs. In fact, it does the opposite. I want to go through that so that people understand why it does the opposite. When wages are lowered, spending power in our communities is actually diminished. When spending power in our communities is diminished, that actually means fewer jobs, not more—fewer jobs—because jobs are created by work, not by cutting wages.

Jobs are created when there is work to be done, because employers are not charitable organisations, as Mike Sabin would have us believe. They are not going to just go out there and employ people when there is no work to do. Those employers who were supposedly sitting in his electorate office last week were not there saying: “Mike, I’ve got no work that needs to be done, but I would just really love to employ some young people to put some money in their pockets.”

💬 Mike Sabin: Trust me—they’ve got the work.

That is not what they were there saying. They were not there saying that, at all. They were saying: “I’ve got work to do and I want to employ the cheapest people possible.” That is what they wanted from that member.

The work is there. This legislation will not create one extra job. What it will do is lower wages. I warned New Zealanders last week, and I will warn them again, if they think that the lower wages agenda from that National Government is just going to be targeted at young workers, they need to think again. This is the slippery slope. This is where lower wages start, but it is not where they stop. In this environment, which I just described before—that situation happening in Hamilton where there is a small number of minimum wage jobs available and large numbers of desperate unemployed people going for those jobs—it is a haven for employers if they wish to exploit people, because that gives the employer all the cards. They hold all the cards in that situation.

I want to go through—for the benefit of the members opposite, because they do not seem to get this—the reality of what actually happens in this scenario. Mike Sabin and Chris Auchinvole both said: “Oh, look, it’s all right because it will be voluntary.” Voluntary for whom? I will go back to the burger chain Wendy’s. There were 100 applications for six jobs. What is going to happen in that situation? Let us apply this bill to that situation. The Wendy’s chain manager decides that they want to employ a person who is, let us say for argument’s sake, an 18-year-old, and they fit the criteria set down in this bill. Is that Wendy’s burger chain manager really going to say to that young person: “Look, by law I can pay you as low as $11 an hour. Would you like that, or would you really rather be paid at $13.75 an hour? Your choice. You choose. You tell me.” Do members opposite really believe that that is the discussion that is going to happen when Wendy’s fills those six jobs that those 100 people applied for? They have all gone quiet opposite because they know the real answer. The real answer is that the Wendy’s burger chain manager is going to say: “Eleven dollars—take it or leave it.”. Take it or leave it.

That is what the National Government believes is a voluntary situation. They believe that that is giving freedom of choice—remember that from Bill Birch—to that 18-year-old, because they will be able to say: “No. Thanks very much, but I’ll just leave your job.” They will have stood in that queue of 100 people, and, mysteriously, the National Government members opposite believe that they are going to voluntarily say no to that job because they will not accept $11 an hour. That, by anyone else’s standards, is compulsory. It is not giving freedom of choice to those young people, and it is certainly not going to bring about the high-wage, high-skill economy that we need to get this economy going. That is what we need in this country, not these endless bad pieces of legislation that this Government keeps bringing forward, which actually get us in a downward economic spiral.

This is yet another piece of legislation that will actually take our economy down. It will be felt in the regions. It will be felt in the provincial cities like Hamilton, where those jobs—that small number of jobs—are driving those very long queues. And in those very long queues there will be people from a range of age groups. Andrew Little is right: it will be the bad employers who take advantage of this. The good employers do not need this legislation. They do not want this legislation, because they will be prepared to pay a decent wage for a decent day’s work.

What this bill is encouraging employers to do is to go below a decent wage. In New Zealand we have already determined that. The Government, actually, has determined what it thinks a minimum wage is. It thinks it is $17—$13.75. Gosh, I wish it was $17, but it thinks it is $13.75. It thinks that is a minimum wage. But when it comes to young people, it does not think they are worth even that. It thinks that they should not be getting a decent wage for a decent day’s work. That is fundamental to what I understand to be the sort of fairness that most Kiwis believe is right in this country—a fair day’s pay for a fair day’s work. This bill is undermining that very sacred Kiwi value. It is coming from the National Government because it has always come from the National Government. It has always been its solution. It does not matter what part of the economic cycle we are in—recession or not—whenever there has been a National Government in place—

Kia ora. Thank you, Mr Chair. I rise to take a call on the Minimum Wage (Starting-out Wage) Amendment Bill. I will address a couple of issues that Mr Sabin and Mr Auchinvole raised.

First of all, Mr Sabin with the story that he graced us with in regard to employers coming to see him to say that they were unable to employ young people with the skills that they required to gain employment inside their industry. I recognise Mr Sabin’s point. I recognise the points of those employers. However, his answer—this Government’s answer—is completely misguided. If this Government truly wanted to support those local employers to employ local young people, then why would it have removed the funding from places like Ōtorohanga, where you have a massively successful model, where the community has come together to train local young people with local skills for local employment, where the Mayor of Ōtorohanga has brought together those employers and said: “What are the skills you need, guys? What are the skills we need for our young people to actually be able to get out there and gain work just down the road from where they live?”. That is what happened. Employers came in and they highlighted—in this instance, in the Wintec prospectus—which of those skills were the ones that were needed. Local government worked with Wintec and said: “We will give you a building with zero rent—zero rent—so that you can actually come here and train our young people in only the skills that will gain them employment.” That is something that would actually work, not paying somebody less to do the work. Where is the incentive for young people? I ask Mr Sabin how many 16, 17, 18 and 19-year-olds he has consulted in his constituency about this policy, which he stands by and says is the answer for us.

I also want to pick up on the comments made by Mr Auchinvole. I am not sure whether Mr Auchinvole was here in the country in the 1990s—whether he was here the last time we had a youth wage actually put into place. I am not sure whether Mr Auchinvole is aware of the statistics around what happened the last time a youth wage was brought into this country, and the displacement that Mr Goff talked about. I can send to Mr Auchinvole’s office some of the suicide statistics for older males from about that time, when they were laid off through the recession, when they found their companies and employers going into receivership and they were trying to pay their mortgages. They were trying to feed their children, and they could not get a job at the local gas station pumping gas because they were undercut every single time by a young person who could be paid less. Those are real statistics. I can send them to Mr Auchinvole’s office if he would like them. This is going to create the same difficulty, and it will create no more jobs.

Recently the Ministry of Social Development and the Minister for Social Development pulled back funding from the community answers around youth employment into major centralisation, particularly inside of Auckland, with only four deliverers. Again, we have been down this pathway before. It is not a new idea. It was not a good idea then, and it is not a good idea now. We have young people who need to be able to support themselves, particularly at age 18 and 19, yet we are going to put them on something that none of us in this House would work for. None of us would take that job, yet we say to them “You will.”, and we have combined it with some legislation inside the social development portfolio that will force them to do so. To have the word “choice” used at any time around this issue, when speaking to 16, 17, 18, and 19-year-olds, is a fallacy. I would say again, Mr Sabin: how many 16, 17, 18, and 19-year-olds have you spoken to? I would suggest very few, Mr Sabin.

💬 Mike Sabin: Well, I’ve got plenty of young constituents I’ve talked to, actually.

Well, that would be lovely, Mr Sabin. Go out into your schools. Go out into the schools up there, Mr Sabin, and let us see, when they actually get the vote, whether they would keep you there. These are the voters of the future. The fact that you will pass this legislation before these young people have any way, shape, or form to either keep you in office or take you out of office is disrespectful. This is a group of people who are without power inside this legislative chamber, and we are taking advantage of them. Your party is taking advantage of them—

I am happy to carry on from the previous speaker, Tracey Martin, and to respond to some of the calls from members on the other side talking about how they talk to young people and how their constituents are unemployed. One of the things that Chris Auchinvole outlined very well is that there is something that we can all agree on in terms of this legislation, the Minimum Wage (Starting-out Wage) Amendment Bill, and that is that we have a massive problem with youth unemployment. It is actually really good to hear National finally admit to that point, because we have been saying it for many years, that we are at a crisis point when it comes to our young people and their ability to find work. What we have had from members on the opposite side of the Chamber this afternoon are crocodile tears around the rates of youth unemployment, and talking about the lack of engagement of young people.

But this bill is the only solution they have got to put up. Slashing young people’s wages is not a solution to youth unemployment. It will accomplish absolutely nothing. What we are having, as my colleague Sue Moroney pointed out in her very fine speech, are members opposite give up on even advancing the arguments that this legislation will do anything to create jobs. Instead, what we are having are members falling back on telling us: “Don’t worry, employers do not have to do it.” This is their one great solution, and they are reassuring the nation that it is OK, that it is voluntary, and that employers will not have to do it. It is just ridiculous that this is all they have got when we are at a time of national crisis in terms of youth unemployment. We have 90,000 young New Zealanders who are not in any form of education, employment, or training, and the best that Government members have got is voluntary wage slashing as a solution to it. It is absolutely no wonder that the Salvation Army gave this Government a D—a fail—in its recent report when it came to youth unemployment and its ability to deal with this pressing national problem.

This is a Government that is failing. This is a Government that has absolutely nothing to offer on what we have, which is a crisis point of massively high rates of unemployment in New Zealand. Forty-five percent of these people are aged between 15 and 24. The unemployment rate for 15 to 19-year-olds is 30.9 percent. We are getting up there with the worst countries in Europe in terms of this age group and unemployment. This is not something that we can sit back on and say “Well, this is all we’ve got, but, don’t worry, you don’t really have to do it. It is only a voluntary piece of legislation anyway.” Youth unemployment is at a point where it requires a real solution.

It is not only we on this side of the Chamber who believe this. It is quite interesting to read back over National members’ comments in previous debates on this question in this Chamber. If we go back to Paula Bennett in March 2010, she said, in response to an oral question: “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.” Fine words, Ms Bennett. We agree with you entirely.

Then we come to the chair of the select committee that heard submissions on this bill, the Transport and Industrial Relations Committee. There were 61 submissions, and 54 of those were opposed—

💬 Darien Fenton: 531.

There were 531, but overwhelmingly—

💬 Darien Fenton: Only nine in favour.

Only nine out of all those submissions—thank you, Darien Fenton—were in favour. But if we listen to what the chair of that select committee, David Bennett, has previously said on the ability of youth rates to address this real crisis we have in New Zealand, he says: “We should be promoting to them”—that being young people—“the need to get education and training, not encouraging them to take the easy option of temporary employment, which may provide some financial gain at an early age, but will not deliver long-term benefits for them as we go forward as a country.” Then we had David Bennett again in April 2010: “It is important that we do not set the bar too low, in the sense that our young people who work hard must not find that they get no reward for their efforts.” Well, these are fine words from the chair of the select committee from only 3 years ago. It would be great to hear him address some of these matters more fully on this, and to take a call and address some of these matters, because the fact of the matter is that we have a Government that has done very little. In fact, it has done nothing, and it has got a fail mark.

We had money set aside in 2011 by this Government to train young New Zealanders. In November last year only $8 million of that Skills for Canterbury money had been spent. We lost two crucial years of training our young people to work in the rebuild of Canterbury, and what do we see now? We see Christchurch being flooded with migrants coming in to do that work instead of our own young people being 2 years into their training. We have a Government that is not committed. It is not backing education throughout New Zealand. We have rural polytechnics all over this country that are in real danger. Taking away the foundation-course funding from them has made many of our polytechnics be in a precarious state. Labour knows that if we are going to address this real and pressing issue of youth unemployment, where 45 percent of all those who are unemployed in New Zealand are youth, and where we have youth unemployment rates of 30 percent, then we have to do something other than offer voluntary legislation in terms of slashing wages. We have to do something to create jobs, and that is what Labour is committed to doing. Labour is committed to being a hands-on Government that will get out there, that will back young New Zealanders, and that will say to young New Zealanders: “You have a future in this country, and you can stay here.”

In September last year we had the Prime Minister make this great announcement about how he was going to write personally to 175 employers and ask them to take on the graduates of the Limited Service Volunteer scheme, where we have only an 80 percent completion rate. We have very low completion rates on the Limited Service Volunteer courses anyway, but the Prime Minister made grand gestures. I think there were some unemployment figures released around the time, and the Prime Minister wanted to be seen to be doing something. The Prime Minister promised to keep doing this—to follow up. As of the beginning of February this year he had not done one further thing on this. The Prime Minister had not followed through on his commitment to young New Zealanders. He had written to zero further employers, asking them to take on the graduates of our Limited Service Volunteer courses.

This all just goes to show that this is a Government that has no solutions when it comes to our young people. It has no solutions to tackle the real thing. All we have is insidious legislation that is intent only on cutting wages. It is asking our young people to live on not even the minimum wage or a living wage—it is below that. We are at a point in our history when we are debating what it takes someone to live on. We are talking about $18.40 an hour and we are asking that our young people get paid $11 an hour. This is not the kind of New Zealand that Labour wants to offer to young New Zealanders. Labour wants to offer young New Zealanders a real reason to stay here, and slashing the wages of young people will do nothing to create employment. Government members opposite have even themselves given up on that argument. We have not heard it today, and all we are hearing is a chorus of “Oh, don’t worry. It’s only voluntary.” They do not believe in their own legislation. They know it is not going to work and all they have got to offer now is to tell us “Don’t worry, not all employers will need to do it.” Labour is not supporting this legislation. It is opposed to it. We want to see real solutions to the very real problem of youth unemployment, not legislation like this coming before this House.

Some of the arguments have been brought out very clearly by the Opposition as to why this bill, the Minimum Wage (Starting-out Wage) Amendment Bill, should not proceed. I think the critical argument is that this bill is a bill with a low-wage vision for New Zealand, when any New Zealander knows that our future depends on being high-skilled, high-waged, and high-tech. This idea that we can compete with the world by continuing to slash the wages that we pay to our people is absolutely discredited—absolutely discredited.

I tell the members opposite to read what the departmental regulatory impact statement says about this bill. This is what the Ministry of Business, Innovation and Employment advised the Minister of Labour. The first thing it advised the Minister was that it had not considered the options. Why had it not considered the options? Because the Minister had said: “This is what you are going to do.” So the ministry says right up front: “This might not be the best way to go, but we have no choice. This is what the Minister insisted on.” Then it says that, on balance, it thinks that “the proposed starting out wage will have positive employment impacts for the targeted groups.” What it says later on is that the targeted group might see a little bit of job creation—maybe a few hundred—but that will be at the expense of other groups, which will be displaced. It says that quite explicitly. That is likely to mean, in particular, that some 18 and 19-year-olds without much work experience and people aged 20 and over and on a benefit may be less attractive to employers than the 16-year-olds or 17-year-olds on the starting-out wage. So you try to address the problem with unemployed 16-year-olds and 17-year-olds by making more 18, 19, and 20-year-olds unemployed.

Then there is the Ministry of Education. What does that ministry say about this bill? It says that it is not the right thing to do, that it is not consistent with the goal of getting more young people to stay at school to increase their skills, and that it is encouraging unskilled young people to drop out of school and to go into a job that they will get because they are paid peanuts. We do not need more unskilled 16 and 17-year-olds leaving school to go into the workforce. We need more 16 and 17-year-olds staying at school and improving their educational qualifications.

💬 David Bennett: Come on, Phil, it’s not an election campaign.

We need more young people to get skilled trades, and I put it to Mr Bennett—oh, I am very glad to see Mr Bennett here. Let me remind Mr Bennett what he said about this bill when it was in Roger Douglas’ name. David Bennett said on 21 April 2010—not even 3 years ago; Mr Bennett, remember this—“The fundamental proposition this bill puts up is that we need to pay people less to get them in their first job so that they can have an unskilled future.” Mr Bennett, is that what you said—really? And you went on to say: “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 they are looking to get the best-paid job they possibly can.” Mr Bennett, you were right then and you are wrong now. You could not be more wrong.

I say this to the Government: what about Labour’s suggestion? We know that we are short of skilled tradespeople. We do not have the people to rebuild Christchurch. We do not have the people who will be needed if a Government ever had the imaginative policy of creating more houses in Auckland. What we need to do is get young people off the dole and into skilled training, and what better way than what Labour was proposing at the last election: to actually pay the first year’s unemployment benefit to the employer in order to encourage the employer to take on additional apprentices? Get more young people into genuine skilled opportunities. Get more people into apprenticeships, not, Mr Bennett, slash apprenticeships by 20 percent, as this National Government has done, and not, as this Government has done, cut $53 million out of skilled training two Budgets ago, when what we actually need is for more young people to have skills to contribute to this country.

Do you know what a low-wage vision is for this country? It is a one-way plane ticket for more and more New Zealanders to fly to Australia. Why are they going to Australia, Mr Bennett? They are going to Australia because your Government has not created job opportunities here—

I move, That the question be now put.

Who remembers that fateful night when the sword finally fell on Don Brash, and John Key moved as swiftly as possible to see Bill English off at the pass? He came out and he announced that he was ambitious for New Zealand. He was ambitious for New Zealand. Well, where has all the ambition gone? Where has that ambition gone? Because this Government has lost its focus, its ambition, on getting people into jobs and making sure people are paid well for those jobs. There is no job strategy. There is no strategy for growing jobs. There is no strategy for growing our economy. The only thing it can think of to try to get young people into work is to cut their wages.

Well, David Bennett knows. David Bennett knows that that is old thinking. That is thinking from the past, because David Bennett said, when he was speaking against this exact proposal when it was proposed by Roger Douglas: “It is looking at things in a historical perspective. Well, the world has moved on.” Well, in fact, the world has moved on, but all this National Government can do—so bereft of ideas that it is—is to look back into history for failed examples of ways to try to get people into work. It failed before and it will fail again. David Bennett knew that. He still knows it, and yet for some reason he will be voting for this bill to carry on today. Under National’s watch 72,000 young Kiwis aged between 18 and 30 have headed to Australia looking for better job opportunities. What else are they looking for? Better wages, of course, because in Australia they do pay a decent wage. They will get a decent wage, and there is actually a strategy in New Zealand to get more people into higher-skilled, better-paying jobs.

This Minimum Wage (Starting-out Wage) Amendment Bill is a bill that simply reflects National’s absolute loss of ambition. It has no plan to get young people working. It has no plan to get young people into apprenticeships. It has no plan to get people higher skills. It has no plan to develop a high-skill, high-wage economy. What does it have instead? This meagre, pathetic bill, which absolutely lacks any sort of ambition. But do not ask me. Do not ask me; ask David Bennett. Ask David Bennett, who said: “We are denying them their success by holding them at a lower rate than their ability shows as individuals.”, and that, actually, is why Labour fundamentally opposes this bill. It allows a form of discrimination that, absolutely, is not justified. It says to a young person that because of their age and their age alone, they can be discriminated against. [Interruption] Mr Sabin?

💬 Mike Sabin: I said that member would just hate to see any growth in job numbers.

Ah! Mike Sabin says that we would hate to see any growth in job numbers. Mr Sabin, where are the jobs? Where are the jobs, Mr Sabin? There are no jobs. That is exactly what this Minimum Wage (Starting-out Wage) Amendment Bill reflects. If there were jobs for people to go to, there would be no necessity for this bill at all. If there were jobs, then there would be proper competition in the market for wages and people would be working. This will not create new jobs. This will simply shift older people out of the workforce, because employers will be able to take a job that they offer to someone who actually qualifies for the full adult rate and give that job to a young person who does not qualify for the full adult rate. It does not create new jobs. The only way a young person will get a job as a result of this bill is if somebody else is pushed out of the labour market, Mr Sabin.

💬 Mike Sabin: Rubbish.

That is the only way.

💬 Mike Sabin: Nonsense.

Mr Sabin can sit there and say “Rubbish.” and “Nonsense.” as much as he likes, but he knows it is not true. He has not actually come up with a single argument in favour of this bill.

💬 Mike Sabin: There’s plenty of employers who want to give a young person a chance out there, clearly.

If plenty of employers want to give a young person a chance, why not pay them for the work that they will do? Why not pay them the rate that they deserve, Mr Sabin? We are not talking about a charity here. We are talking about paid employment—the dignity of proper paid employment where a young person can go to work and know that they will be treated in the same way as anybody else in that job. That is the dignity that we are talking about, not about saying to young people that they are second-class citizens and do not deserve to get the rate of pay that anybody else in that workplace would be getting. This bill reflects a soft lack of ambition from the National Party that wants to trap young people in low-skill and low-wage jobs.

We have had great theatrical speeches from the other side on the Minimum Wage (Starting-out Wage) Amendment Bill, but I think I want to draw some of this to a conclusion, at least in my own thinking. What we are hearing here is fundamentalism, fundamentalism at its best. It is fundamentalism that takes one point and overemphasises it at the point and against everything else. So let us give this a little bit of context, and let us give this a little bit of consistency, shall we?

The first is context. We have heard a lot of things about what this Government is not doing and so forth and, somehow, that this young person’s wage is a terrible affront, because nothing else is happening. There is an enormous amount that this Government is doing around jobs, supporting the economy, and so forth. Of course, we are talking about 16 to 19-year-olds, and a lot of them are in education. We can just look at the continuing results that are coming out of the education sector. I have been visiting schools recently and those young people studying there. Of course, we have been rebalancing things around student loans and allowances. We are increasing funding into people doing engineering and science. This is a Government committed on a broad front.

The Opposition will sit here and wax boring, if I might say—not lyrical, wax boring—on a whole lot of elements here that it thinks “Oh, it is terrible.” It sits in a context. The Opposition says that the Government is not doing anything for jobs. Well, let us talk about The Hobbit, let us talk about Skycity, let us talk about Callaghan Innovation, and let us talk about mining. Let us remind ourselves that the Opposition there said no to all of that. Context is incredibly important. The Opposition is a policy platform of “no” sayers. It is a naysayer to all of those activities—the mining, Skycity, Callaghan Innovation, the funding for education and science—and it says no to this opportunity for young people for a minimum wage.

I want to turn, as well, to the question of consistency, because, actually, there has been a great lack of consistency from the Opposition. They are yelling out: “Oh my Lord, this is a matter of principle.” We heard it from the Greens. We have heard it from Labour. It is a matter of principle. But, of course, the Labour Party does have its own youth wage as well. Employers said it was unworkable. It did not work very well, the same rate as the youth minimum wage. We have heard it from the Opposition “Oh, that is fine, that is fine. This is different.” It is not actually principled. So to those listening in and those in the Chamber, to the Opposition as it attempted a principled response—but it is not principled itself—one only needs to look at effectively the youth wage that the Opposition held.

Also, we have been talking about the living wage, that somewhat arbitrary figure. Then you look at Supplementary Order Paper 193 here where $15 is being touted, which, of course, is not the living wage. So we have got two levels of arbitrariness there. Then, if you really want to push the inconsistency, $15 is actually 80 percent of the living wage. So, once again, the Labour Party is getting all its numbers muddled up—all very inconsistent. It is a bit like a bank account that you might have overseas and you forget it is actually there. Why be consistent? Why be consistent?

For me, really, I come back to where I started—great theatricalness and great fundamentalism: “We just want to talk about the minimum wage and ignore all the good things that this Government is doing.” Context is incredibly important. And the final aspect here is that employers are not ogres, OK? How many people in the Opposition have actually run businesses? Businesses want to employ people. They are encouraging to employ people. They are not out there to screw every young person down on wages. These are Kiwis just like all of us. They are Kiwis like ourselves, wanting to give young people opportunities. If this House is serious about looking after young people, providing opportunities—that dignity of work, Ms Fenton, which Rerum Novarum spoke about; the dignity of work—we will do all within our powers to help young people into work.

I want to pick up finally on Mr Sabin’s point, as someone who holds an electorate as well. It has been interesting that those who do not have been pontificating to us. When the young people come into our offices or we are talking in the schools they want opportunities. If this is going to help them, then why not 6 months at 80 percent? But I come back, finally: theatricalness from the Opposition, a lack of principle, certainly no desire for context, and no consistency in its thinking. Let us move on.

It is a great pleasure to rise to speak for the first time in this 50th Parliament. But, of course, the matter we are debating is not one that is a great pleasure. It is one that Labour opposes, and I proudly join my colleagues in opposing this Minimum Wage (Starting-out Wage) Amendment Bill, because it is discriminatory. At its very essence this is discrimination.

I want to note the point that my colleague Dr Megan Woods made about unemployment, and youth unemployment in particular. There is no doubt that there is a crisis in New Zealand around youth unemployment. It is part of a wider economic crisis we have in our country of low incomes, of high unemployment, and of high levels of underemployment. People want work and they want a decent standard of living. We have a crisis because we have a Government without any ideas. So what does it revert to? It reverts to type, of course: straight-out discrimination. It is wrong for young people to be paid less for doing the same job. That is precisely what this bill does.

Age is not a proxy for skills or experience. As the others have said, there could well be 18-year-olds who have more experience than a 24-year-old doing the same job. Youth and age are not proxies for skills and experience. Why should it be that a young person working at a supermarket at the busiest time of the week gets paid less? So often in our supermarkets, and anybody who does any shopping knows this—maybe across the other side of the Chamber people do not know about this—if you go in at a busy time in the evening or weekends you will see a lot of young people, and that is also the busiest time. Our supermarkets are relying on their labour. Why should they be paid less at the busiest time? It is actually a double whammy. It is ridiculous.

This is a discriminatory piece of legislation. It also has a nice little twist about punishing youth beneficiaries to boot. I just think this is an absolute disgrace, and that the consequences of this are going to be some very negative effects. There are going to be displacement effects. The Government’s own research says this. Even if there are jobs created, it will be at the expense of someone else. It will be replacing somebody with somebody who is cheaper, not because people want to employ young people per se, but because they will be able to employ somebody cheaper.

What happens to young people when they become eligible for the full rate? Well, of course, they could well be replaced by somebody who is cheaper, so older young people will be disadvantaged. In fact, in combination with the wonderful “90-day No Rights at Work Act” you could see people on an endless treadmill of never reaching the full rate.

The effects of this in tandem with other Government policies are really very troubling. I know, for example, that organisations like the National Council of Women are worried about the displacement effects for part-time women workers. Women workers who are in the workforce in part-time jobs—again, maybe in industries like retail and hospitality where they can get the part-time hours because they need to balance their family responsibilities and their responsibilities in the paid workforce—will be replaced, potentially, by cheaper young people. So they are concerned about it from the point of view of women part-time workers. That is a displacement effect as well.

What about the hardship impact on young people? That is also an effect of this piece of legislation. Often, now, young people’s incomes are a vital part of family income, so we are actually reducing family income. Often young people are also working to save to study—something that we would all applaud. We want young people in tertiary education. But, again, we are going to make it harder for them to get the money that they need, or it will mean that, in fact, they have to rack up even higher student loans than they currently do—again, another negative impact of this legislation.

But what underlies this—and I want to acknowledge the contribution made earlier by Phil Goff on this—and what this is really about is the typical National Party approach to our workplaces and to workers’ rights, which is actually around reinforcing the idea that cheapness is what is really at effect here, that workers are actually expendable commodities, and that we do not want to be ambitious about lifting incomes in New Zealand. We do not want to create better-quality workplaces. We do not want to have workplaces where, in fact, workers are treated with respect and where their ideas and innovation are what drives productivity. No, we want to continue to have an approach that has been National’s approach now for decades—

I move, That the question be now put.

Darien Fenton’s amendment to new section 4A(1)(c)(ii), set out on Supplementary Order Paper 192, is out of order as it is inconsistent with a previous decision the Committee has taken. Darien Fenton’s amendment to new section 4A(3)(a)(i), set out on Supplementary Order Paper 192, is also out of order as it is inconsistent with a decision the Committee has made.

The question was put that the amendments set out on Supplementary Order Paper 192 in the name of Darien Fenton to new section 4A(5) and 4A(6) in clause 4 be agreed to.