Fair Pay Agreements Act Repeal Bill

We now come to Part 2. This is the debate on clauses 5 to 7—repeal and revocations—and Schedule 2. The question is that Part 2 stand part.

Thank you, Mr Chair. I’m grateful to have a call, the first call in Part 2 of the debate. I have an amendment that I want to speak to, first, in relation to this particular part, and I think that the amendment that I’ve tabled corrects a mistake in the drafting of this bill. I’d like to direct the Minister for Workplace Relations and Safety to Schedule 2, Part 1, in relation to the consequential amendments. This consequential amendment looks at the Employment Relations Act 2000 and replaces section 132(2) with a new section entirely, as part of the consequential amendments. Unfortunately, when this was reproduced a few words were omitted, meaning that, in my view—and I’m happy to hear an alternative view from the Minister—the Employment Relations Act in fact is amended by this Part 2 of the repeal bill and, unfortunately, results in the words “including overtime payment rates, and penalty rate payments” being removed from the Employment Relations Act 2000.

Employment Relations Act 2000 in employment law is, obviously, the primary piece of legislation that people look to in order to determine what goes in employment relations and in unemployment law, and so I think—and I’m sure the Minister would agree—that changing this particular Act during urgency, with no select committee process, removing the specific reference to the type of evidence that could be included in the Employment Relations Authority and, specifically, losing the reference to overtime payments and penalty rates, shouldn’t be included in this bill. There shouldn’t be amendments to a primary piece of legislation like the Employment Relations Act 2000, which are substantive and not related to the fair pay agreements repeal.

I did look through all of the other consequential amendments; I couldn’t find another one that appeared to delete words from a primary piece of legislation. But I was concerned to see this, and so that’s why I put an amendment in my name in the committee in order to correct that. As much as I don’t want to see this piece of legislation improved, as I’m fundamentally opposed to it, I also don’t want to see New Zealand workers lose out in relation to the specificity of including overtime payment rates and penalty rates. I’m happy to be corrected, if the Minister receives advice that that is incorrect, but, from my reading of it, it appears to me that in relation to the type of evidence that the authority may get, these are not included.

Now, it may be able to be argued that penalty rate payments are no longer a part of most people’s agreements, and I would agree with that. In some instances, however, there may be older employment agreements which were in place that may reference penalty rates, and so I think that without scrutiny, without a proper process, it would be wrong to just discard the reference to penalty payments, especially in a completely different piece of legislation.

Overtime rates, however, are fundamentally important and are included in many different individual and collective employment agreements, and so removal of those, as I understand is specified in this repeal Act, would not be something that the Minister should be doing—especially, as I’ve said, in an urgency procedure with no select committee process. I see the Minister is receiving advice, so I’m happy to be corrected on that.

But that is the purpose of the Amendment Paper that is in my name and I would invite the Minister, if indeed there has been an error, to agree to my amendment and include it with the passage of the bill, to make sure that people get what they’re entitled to and that there isn’t an inadvertent exclusion of these particular payment rates from the primary piece of employment legislation in New Zealand. So I’m interested to hear the Minister’s response.

Thank you, Madam Chair. Look, I thought I would respond to this one quickly, to get it out of the way. The reason why we have put in this specific amendment, which is to replace section 132(2) of the Employment Relations Act, is to return to the status quo from before we had the fair pay agreements. It was only during the process of the Fair Pay Agreements Act that this provision for overtime rate payments and the penalty rate payments was introduced into the law, and so, by removing this, we are going back to the status quo.

Thank you, Madam Chair, and congratulations on your role. It’s quite exciting. I would like to talk about something which covers, really, the whole bill, but this is probably the appropriate part to talk about it. That is the fact that this bill has been rushed, and I have real concerns about legislative quality. The irony is that this is coming from a party whose main plank in the coalition agreement is legislative and regulatory quality. Now, I’ve heard about the regulatory impact statement and the nonsense as to why that wasn’t got—so I won’t go there, but I do have a number of specific questions.

These are questions based on the Regulatory Standards Bill that David Seymour had and that will no doubt be reincarnated in this Parliament. One of the main planks of that bill, which talks about good regulatory and legislative quality, is that the people who are affected by the bill have been consulted. Now, there are a number of people who are currently negotiating fair pay agreements, and what I would like to know from the Minister—a clear answer—is what engagement have you had with the industries and the unions that are leading the bargaining in respect of fair pay agreements, because they are directly affected by this, and by your party’s own creed, you require consultation with them. So that’s the first thing.

The second question I have is that, in that set of principles around good legislative quality, there needs to be an exploration of other options. What I don’t want to hear from the Minister is her doctrine. I don’t want to hear her dogma. What I want to hear is the process that she went through, which her own party requires, to explore other options which were different to or other than a wholesale repeal of the fair pay agreements. What I see in this party is a party that says one thing and does another, and that’s utterly incoherent, it’s inconsistent, and it doesn’t come well from someone who’s now in Government. So that’s my second question.

My third question is this: by the ACT Party’s own principles of legislative quality, an analysis should be done of the costs and benefits of this legislation. I don’t want the ACT Party’s reckons on this. What I want to know is what analysis has been done of the costs and the benefits of having fair pay agreements on the one hand, which raise the wages of our lowest-paid workers, and what the benefits and costs are of abolishing, of sweeping aside, better wages for workers in some of our most critical industries. Don’t give me the Business Roundtable’s analysis, Minister. What I want to know is what independent analysis has been done in the current environment—not back when the original legislation was passed, which was a different economy. I want to know what it is now in the economy that we have today, where wages are under pressure, where people are under pressure. So please give me that analysis and assure me that you will hold yourself to the very same standards that you are proposing to hold other legislators to. This bill is a real step backwards.

So what I would like to know is: are you following your own procedure of legislative quality? And I’d also like to know whether this legislation meets the Legislation Design and Advisory Committee guidelines, not only for its legislative quality in its wording but also the process it has gone through. It’s a significant change in our policy, and it appears to me that it’s been rushed, it’s under urgency, there’s no consultation, there’s no research done on it. It’s a piece of dogma from the ACT Party and I’d like to hear the Minister’s answers to those four questions.

Tēnā koe, Madam Chair. I don’t know if I’ve had the chance to congratulate you on your ascension to this position, and I also want to mihi to my colleagues around me who are also very eager to make contributions—substantive, should I say, rather than just asking for a vote.

I wanted to follow up on the previous member’s contributions around analysis in relation to this bill, and specifically whether a child impact assessment was requested or had been considered at any point. The reason why I ask this is that a lot of the families that would have benefited from fair pay agreements are families with young children and the fair pay agreements would have had an impact on child poverty reduction and would have contributed to our child poverty reduction targets. And so in light of the evidence, analysis—or, as we’re seeing, lack of—I wanted to check what considerations had been given to the impact of child poverty that repealing fair pay agreements would have had, or even any consideration around the benefits that fair pay agreements could have had in relation to our child poverty reduction targets.

Many of the people who have spoken in relationship to this bill—whether it’s of picket lines in the media, etc., our parents who have spoken about balancing the needs of serving their children and attending work—and part of the reason for fair pay agreements was to set those minimum standards. So if the Minister would be able to illuminate us on the impacts of child poverty of this bill, that would be great.

I also wanted to check as well—and unpack some of the previous comments she had made in relation to young people. She referenced that level of flexibility and the fact that we have minimum standards, but I wondered if the Minister had any reflections on the fact that we still have minimum wage exemptions for young people in place, and whether fair pay agreements themselves would have helped young people actually be guaranteed those minimum standards as a result—so, I guess, whether she had done any analysis or had spoken to young people in relation to this bill, particularly those who were workers and those who were in low wages. Thank you.

Thank you very much, Madam Chair. I wanted to talk to an amendment that I’ve put on the Table which is a new clause 8, and it talks about the repeal being subject to a view undertaken in three years’ time of how terms and conditions for the workers—generally in early childhood education, bus industries, security industry, cleaning and supermarkets and hospitality have changed or have they not, also in comparison to the conditions now.

Now, the reason for that amendment is I’ve talked to the Minister before about the issue around hospitality workers, and I’ve spoken in this House a lot about the issues around bus drivers—where I’ve seen real insecurity and a race to the bottom of those wages and they have these split shifts so that they spend four hours unpaid in the middle of the day. I’ve also been really concerned—in fact, I was one of the early lobbyists for trying to get the first fair pay agreement, and this is in the time before I was in Parliament—for the Recognised Seasonal Employer workers, because they seemed a particularly vulnerable group.

I wondered about these groups of workers who are much more obviously our vulnerable workers, who are struggling to get their pay rates to a decent amount, and I’d like the Minister’s comment on whether she accepts that we have a problem in particular industries and whether she is open to a solution where we actually look at those groups that are particularly vulnerable and are particularly stuck in a kind of cycle of low wage work, and whether we could in fact use this as an opportunity to at least review that work.

Now, my friend the Hon Phil Twyford talked about some of the issues around that recognition that there is a problem and whether there is another solution. One of the things I have identified really strongly is that we have almost no information about the majority of workers in New Zealand’s working conditions. We don’t collect the data that comes in from their individual agreements; we don’t know what’s in those individual agreements. We have absolutely no sight over them, so anything could be in them—and it really goes to the point of whether there’s been any analysis here, how much of the problem—of low pay, bad terms and conditions, unsafe conditions—do we really know exists. If we aren’t going to do an inquiry—and usually we would do that in a cost-benefit analysis—what are we doing here? How are we possibly establishing the safety of this decision to repeal?

I also see an opportunity if some of these groups were carved out—and we’ve talked about that before. If we were allowed to actually look at those industries and see how they progressed—if they were saved from this sort of complete repeal, then you could actually compare what happened under these conditions with what happens if you don’t do them, and you could see whether there were changes in productivity or changes in wellbeing or changes in terms and conditions.

So these things are very much related to this proposed amendment as a way to go, and I wondered whether you’d be open to that kind of review of these terms and conditions and whether you recognise that we have quite a deep-seated problem in these areas, because I’ve certainly seen it.

I also just wanted to comment on the difference I’ve seen in some of the industries that I’ve represented. So I’ve represented the Dairy Workers Union and the dairy workers have an incredible collective agreement. It is a really wonderful agreement and it has meant high wages in that industry and high productivity in that industry. It’s actually extremely flexible—it has a set number of hours that take place over the year so that they can work the seasons, they work the peaks and troughs. But I recognise that that industry is actually mainly quite confident male workers and they have actually been able to collectivise in a way that other groups have not been able to organise and collectivise—who tend to be our women and people with vulnerabilities. So we have a real problem where unionism does work.

The member’s time has expired.

Thank you—thank you, Madam Chair. I wanted to touch on a few comments quickly. Duncan Webb had a number of questions. He talked, firstly, about whether we had explored a range of other options. My focus has been on, firstly, repealing this legislation, as that has been our commitment through the coalition agreement. That has been, also, our commitment to the 100-day plan. Once this system is repealed, I will then focus my efforts on to next steps, and I look forward to his engagement on those in coming months.

There was concern about whether or not we’d had sufficient time to consult on this law. There has been a wide range of consultation on this law. We, firstly, had the law, in effect, have a consultation period when we went through the fair pay agreement (FPA) legislation the first time round. We had a very wide public consultation during the election process. We have also, two days after I was sworn in at Government, met with both Business New Zealand and the Council of Trade Unions, which represent the unions and businesses that represent both sides of this agreement and argument. But, most importantly, we do have a clear mandate from the public, from people who voted for this Government, to repeal this law.

The third question is whether or not there has been analysis done on the cost-benefits of this repeal, and I am delighted to inform the member that, yes, there have been costs and benefits analysed by the Ministry for Business, Innovation, and Employment. That was done in the 2021 regulatory impact statement, but if you look at page 2 of the cover sheet to the fair pay agreements regulatory impact statement that was finalised on 28 November 2023, it does state that there was an exemption granted on the grounds that the regulatory impact statement produced when the FPA system was introduced in 2021 mostly duplicates the analysis needed to repeal the system. So there was no need for a complete new regulatory impact statement, considering that most of this information already existed in a regulatory impact statement on this particular law. Updates were provided where that was relevant, and that was in the cover sheet.

The fourth question was about whether or not the drafting met the Legislation Design and Advisory Committee’s guidelines for legislative drafting and procedure. Those were considered during drafting. The guidelines relate to good lawmaking and they were considered throughout the policy development and the drafting of this bill.

Ricardo Menéndez March asked whether or not we had considered children and considered what impact this law would have on children within New Zealand. I consider that the fair pay agreements system is a blunt tool that affects all employees and all employers within scope within a particular industry, and that would negatively impact on businesses, which would negatively impact on employees, which would negatively impact, therefore, on their families. So, yes, we have considered the effect of what that would be on not just business but employees, families, and all people involved in our labour market and their wider communities.

We have a question from Helen White and it was relating to another amendment on the Table, in the name of another member, about whether or not we’d review the system after three years. Because there have not been any fair pay agreements in effect, it would be impossible to review what a system that had never been in place would look like after three years, in order to review what the difference between two systems could be. So we disagree with that amendment.

Tēnā koe e te Heamana. I’ll join with other colleagues as well in congratulating you on becoming a presiding officer, and also acknowledge the Minister in the chair, the Hon Brooke van Velden, on becoming a Minister, of course, and, actually, in the interactive way that you’ve participated in this debate—it’s really helpful, I think.

I was really keen to take a call on Part 2—in particular, to speak briefly on clause 5 and what it actually means to me. It represents the whole passage of that legislation. It represents the enactment of that legislation. It represents, for me, the start of the use of that legislation and the progress by a number of different unions, of different sectors, that have started to progress under that legislation. That means even though it’s one sentence, it means so much. And I want to address all of it that it encompasses within that one clause.

In particular, I want to reference the amendment that I’ve tabled in support of security guards throughout Aotearoa. I referenced the second reading speech of my colleague Camilla Belich when she mentioned a young wahine from Kuki Airani, actually—Rosey Ngakopu is her name. I got to speak with her today. She had followed the whole process represented by clause 5, participated in every part of its progress through this House, and also participates in trying to get better wages for security guards by participating with her colleagues. Now it’s going to be taken away. They had all that hope—aspiration for themselves, their families, for the next generations—that that was going to make a difference. Because what they do know is that throughout their careers of being in the security business, nothing else has worked. Absolutely nothing else has worked. We know that. We know it because they’ve experienced it. And now we’re told it’s no good, got to take it out, go back to where we were, and that will fix everything. Well—hello—it will not. It will make things worse—worse for those families; worse for those workers. This House owes it to every New Zealander—not just Rosey; all her colleagues.

Oh, well, I do want to say one thing, though, about employers. There are some really good employers out there, because, actually—actually—there are some employers of security guards who value their workers and they value their business. They know that the productivity of their business is impacted by the good work that their security guards do, because they keep their properties safe, they keep their workers safe—they even keep us safe in this building. And they deserve better. As I said before, under the previous system, they have not experienced better, and now, in 2023, they get to operate under another piece of legislation, which is about to be repealed by this House without even being given a chance to succeed.

The worst part of it, actually—the worst part of it—is that taking something away takes us backwards, but there doesn’t seem to be any vision of how the future will be for those workers. I think we need to rethink, across this entire House, about how we actually do this kind of kaupapa. Like I said, there are lots of good employers out there who know that value and use it to make more money, which is great for them. And they don’t mind sharing some of that additional income that they generate with their workers. That’s really all I wanted to finish that off. That’s all I really want to say: that we need a better way for those workers into the future.

Thank you. Tēnā koe, Madam Chair, and I am joining the rest of the Whare in congratulating you in your new role, and tēnā ra tātou katoa e te Whare.

I want to pick up very much on something that the member Adrian Rurawhe has talked to. I stand here as—well, in a previous life—a small-business owner here in Aotearoa. After 20 years away living in Europe, I returned home to Aotearoa 10 years ago and we started our new business. I was really stunned, to be very honest, at the low level of pay and conditions for so many workers. So in establishing our own business here, one of the things that we learnt about very quickly was minimum wage, but we also heard about living wage and we strove to pay our employees just that little bit extra. And I admit that it was really, really hard. We all know as small-business owners that cash flow is king. We look at our cost drivers. Yes, for corporates—having come out of that sphere—we are looking at headcount, fulltime-equivalents, human capital.

But for small-business owners, and particularly here in Aotearoa, and we felt it was exacerbated during COVID, it was the cost of rentals and it was the cost of leasing in our properties. During COVID too, even though it was even tougher, I think one of the things that buoyed us—being able to offer our employees above minimum wage and very close approximated to living wage—was the notion that these were all essential workers. All of our cleaners, all of our mechanics, all of our bus drivers, everyone was an essential worker, and for the first time I felt that actually we recognised these people. We started to say hello to these people. I recall one of the cleaning women—I think it was in a police station—was on the news. Prior to that—entirely invisible to everyone, but thanks to that time, we understood that, actually, essential workers, everybody is pulling their weight.

In te ao Māori, we talk about “te hāpai ō”: it’s not just about leadership in the front but it’s also those in the back who are nurturing us, who are caring for us, filling our bellies, cleaning up after us, and getting us from A to B to where they need to get to. I will come to my question in a minute. Because we recognise as small-business owners that these costs are for naught, I want to acknowledge the reality that there are many small-business owners who run their businesses, not just for profit, in spite of the added cost. These are people who are the true entrepreneurs, the true innovators within our community looking to make sure that everybody in the community has a fair share.

My question goes to: what evidence does the Minister have that small-business owners do not want to sign up to something that is better than the minimum wage and that indeed sets minimum standards across their industries? Thank you.

Madam Chair, thank you for the opportunity to take a call here in this committee of the whole House. I really do want to speak to an Amendment Paper that I am putting forward and proposing, and I want to talk about a sector that has been well down the track of putting together their fair pay agreement, and that’s our early childhood educators.

I’m really concerned because when the early childhood educators started to work towards this, there was a great excitement that we might see change in the sector. As we know as it stands at the moment, there is a lot of variability of provision of early childhood education within this country. It goes on a continuum, I’d have to say, from really, really amazing—and that’s the majority—but sometimes it can be quite questionable as well. Unfortunately, part of the reason for that is because of the lack of standardisation of minimum terms and conditions for those educators.

That’s where it seems a bit unfair as well, because there are parts of the sector where there is a standardisation of minimum terms and conditions. I’m not just talking about the schooling sector; in the early childhood education sector, we also have the kindergarten teachers who have privy to collective agreements and have that standardisation. That means that there’s a quality control that exists for those young people in a sector where the education of our youngest and most vulnerable New Zealanders is incredibly important because that sets them up for a really good placement for their education and continuing on in their education. In fact, we know that the research shows that if we have a good quality provision of education in those early years, that is likely to continue on and have greater outcomes when those young people move throughout the education system.

I know that had we been able to go to select committee there would have been a lot of educators who would have come in to talk to these provisions and what it meant to them. We know that fair pay agreements for them could mean that it would take the competition out of the teaching sector. It would leave teachers able to choose where they wish to work based on reasons like having a shared educational philosophy, wanting to work within certain demographics or in certain areas, or because they wish to upskill in certain aspects of their teaching rather than being driven by their salary packages as they are now. Now, we know that the literature review that was gathered in 2019 had pointed towards this and showed that, I quote, “By limiting competition on wages and working conditions, a focus (and investment) on quality and innovation-based economic activities may be fostered.”

Now, I was contacted by an early childhood education teacher who was really disappointed that they didn’t get the opportunity to go to select committee, because she was so excited about the fact that they had the opportunity to put together this fair pay agreement, and I wanted to take the opportunity to just read a few words of what she sent through to me. She says: “Earlier this year, I was one of thousands of kaiako and kaimahi across all of early childhood education who came along to the fair pay agreement meetings to vote on the things we wanted to see in our fair pay agreement. We’re extremely disappointed this Government isn’t giving us the opportunity to follow through and work with employers to make these things a reality. We organised our fair pay agreement claims around key ideas. We wanted to improve child-teacher ratios; we wanted to invest in our educators by providing increased sick leave above the minimum for tough conditions we work in; we wanted to win better pay for support staff and unqualified teachers who are on minimum wages and fully funded pay parity for teachers; we wanted learning support that can actually be accessed for all tamariki who need it, and a funding system that works and ensures community-based and Pasifika ECE can thrive. We voted almost unanimously to support this because it’s a vision of the ECE sector that reflects”—[Time expired]

Thank you, Madam Chair. I wish to speak to a few points raised by the Rt Hon Adrian Rurawhe. He talked about clause 5, and I really commend him for coming back to a specific part of the bill and to a clause, and I would commend any member for keeping to the bill. He talked about proposing an amendment to allow for security guards to conclude the fair pay agreement. I also want to agree with him that there are good employers; there are good people in our economy who are wanting to support workers. I really thank him for reminding us that there are a lot of people involved in this situation, from both the employment side of being the employer and from the employee side, that genuinely want to provide very good conditions for their workers, but also a lot of workers who really respect their terms of employment, too. That’s what we’re innately debating here today.

But we don’t consider, as a Government, that we wish to have any exemptions to the repeal, because we believe that there is a better way to improve the conditions of workers, for business and employees, without having fair pay agreements, and that is through increased productivity; that is through reducing regulation. When it comes to the cost of living, that’s through reducing inflation overall as an economy. There are ways for us to improve the rights of workers and to allow for a flexible labour market where businesses have confidence to employ and to pay their staff more because they have more money in their own back pockets as well. So while I very much respect and enjoyed his contribution, we disagree with his amendment.

When it comes to Darleen Tana, I also want to acknowledge the way you presented your arguments to the committee, too, and you referred to the essential workers and the recognition of them during COVID. I think that’s very important. We want to acknowledge many of the small businesses that run in our economy, as well as the not-for-profit organisations. But, specifically, you asked what evidence I have that small businesses don’t actually want to sign up for this type of agreement. When the Fair Pay Agreements Bill went through Parliament, under the previous term of Government, there was quite a substantial select committee process, and many small-business owners did make submissions against the law change.

I did want to point just to one, which came from a small hospitality business. They pointed to the fact that their industry is already paying more. They said, “Many small hospitality businesses have already closed or are operating reduced days and hours only, and they simply can’t pay more. The Fair Pay Agreements Act 2022 would represent further change that would go too far, too fast, with damaging consequences.”

There are many people in our economy who do want to pay their staff more. They genuinely do. I agree. But a blunt tool like a fair pay agreement would have forced some businesses to close their doors, because they wouldn’t have been able to have the conditions that would have been forced on them by a third party that had no knowledge about their particular business or their particular standards within their operation.

I move, That debate on this question now close.

Thank you so much, Madam Chair. It was very difficult to listen to the contribution from the Minister for Workplace Relations and Safety, because I have to say it was rather patronising. However, getting on to the bill, I want to refer to a number of amendments that are on the Table that talk about clause 5 and inserting after repealed “except in relation to the particular industries that have already started to have their fair pay agreements negotiated.”

One example is that of an amendment that was put forward by the Hon Jan Tinetti, where the amendment is: “except in relation to”—blah blah blah—“early childhood education industry may be concluded and regulated by the provisions of the Act and will not be affected by this bill.” I just want to point out that it is really important to note that that work is under way. A significant amount of human resource and also expenditure and financial resource has already been invested into negotiating these particular fair pay agreements. Now, I know that that Minister and her political party and the Government is very cognisant of the need to make sure that taxpayers’ money is spent wisely, so to stop these particular agreements from being pursued whilst they are in the midst of being negotiated, to me, makes no sense, and I question whether that is a good use of the taxpayers’ dollar.

I also want to make mention of the cover sheet that the Minister has referred to on a number of occasions whilst in the chair today. It’s important to note that, because there is no regulatory impact statement, and the Minister has stated on a number of occasions that that particular cover sheet actually provides evidence in a number of areas to support her wishes to repeal fair pay agreements. I, as a previous Minister, don’t ever recall a cover sheet providing the amount of evidence that I would need or require to make any decisions, and so I am very impressed by what this cover sheet may look like.

I just want to refer to some areas that the Minister has already pointed out that the cover sheet provides her cover with to be able to make this repeal. I want to start with the issue that was raised by Ricardo Menéndez March. He was talking about the impacts on child poverty and with reference to these particular workforces, and at that point the Minister said that there was cover through the cover sheet. I want the Minister to respond to my question with respect to what proportion of children living in poverty are actually living in households that have bus drivers, cleaners, coach drivers, hospitality workers, security officers and guards, commercial cleaners, early childhood education workers, and supermarket workers as the household providers for those households. Important to note, because between 40 and 50 percent of children living in poverty are living in working households, so it would be good to know what the cover sheet said about these particular workforces and the number of children that are living in poverty in those households.

I want the Minister to also respond with respect to the proportion of those workforces—and these are the ones that are under negotiation at the moment, and I won’t repeat those workforces—that are women, because when I look at supermarket workers, early childhood education workers, hospitality workers, I can already state, through just general knowledge and understanding, that they are highly feminised workforces. How many, or what proportion, of those workforces are women? What proportion of those workforces are Māori and Pacific? It seems that that must be covered off by the cover sheet that she got as well.

I also want to know what the productivity losses will be for those workforces—because productivity is such a concern for the Minister and she’s raised it on a number of occasions—when those particular workers in those workforces are required to individually bargain for their rights in their workplaces, when they are pushed to the point where they do end up going on strike because a negotiation has not been able to be found due to—

Hon Member: Madam Chair—Madam Chair?

Hon CARMEL SEPULONI: Madam Chair, I’m not finished—I’m not finished. I want to know what the productivity loss will be for those workforces because of the fact that we do not have fair pay agreements in place and our bus drivers, our hospitality workers, our security officers and guards, our commercial cleaners, the early childhood education workers, and the supermarket workers will continue to need to negotiate individually or be pushed in their workplaces to have to strike or take action because of the fact that the employer, the union, and the workers were not able to come to a fair agreement because the Minister is deciding to take fair pay agreements out of the picture.

Now, all of these things, based on what we’ve heard from the Minister in her contributions in the committee today, should be—should be—covered by that very comprehensive cover sheet that stands in place of the regulatory impact statement. Therefore, I look forward to hearing from the Minister how the cover sheet—and I’ll just reiterate—covers off the impacts on child poverty for those in those workforces; how the impact on Māori, Pacific, and women is covered off in those workforces through that cover sheet; how the productivity losses because of the repeal of fair pay agreements is covered off in that particular cover sheet; and, of course, because it’s of the utmost importance to that Minister and the Government, the expenditure that has been wasted because the Government decides to no longer pursue fairness in the workplace for our workers.

Make sure, please, Minister, that when you talk about the expenditure put towards actually negotiating these fair pay agreements, you align that next to the productivity losses we can expect from those workforces because we didn’t, or they didn’t, have the courage to continue down the track of enforcing what is only right, which is fair pay agreements for these workforces.

I didn’t actually catch that. Did you call me? Thank you very much. How good. It’s actually quite hard! You’d think it’d be easy—I’m the closest to you—and I cannot hear. I apologise. Thank you very much, Madam Chair.

I’m very pleased to have the opportunity, the first one of the evening. I have been trying for some time, so I’m very pleased. Because, of course, now we are in Part 2, the substantive part of this bill—the bill that talks about repealing this, the Fair Pay Agreements Act 2022. I, like all of my colleagues, many of whom are yet to take a call, are keen to talk about this bill—this Act, sorry—that the bill seeks to repeal. As we will see from the large number of amendments, many of which are yet to be touched on, there is a lot of interest in this.

But before I get on to the two points that I wanted to make, I wish to touch on something that the Minister for Workplace Relations and Safety raised in her response to the contribution of the Rt Hon Adrian Rurawhe. The Minister mentioned that instead of this bill—there is no other piece of legislation to look to increase wages, of course, but the Minister did say that instead of fair pay agreements, the way in which this Government intends to increase wages is through increased productivity, reduced regulation, and reducing the cost of living. But, of course, reducing the cost of living isn’t necessarily linked to wages. One way in which to address the cost of living is to increase wages, which the fair pay agreements would have undoubtedly done.

Now, if we talk about increasing productivity, this has been the rationale of those on the right for as long as anyone in this House can remember—for as long as anyone in this House can remember: if only we can increase productivity, then workers would be better off. The problem with that, of course, is that productivity is linked to wages, and there is a reason why Australia and other countries that follow what was in place in the Fair Pay Agreements Act—the Act that this bill, in Part 2, seeks to repeal—have higher productivity: the two go hand in hand. Since 1991, New Zealand’s productivity has not kept up with other countries that have maintained what is in the Fair Pay Agreements Act.

So the committee may understand why we on this side are a little bit sceptical of the claim that instead of this Act, which will be repealed by this bill, which will and has been proven to improve conditions and increase wages and get a fair standard across the board—people shake their heads, but they’re not looking at evidence; they’re only looking at their own view that they don’t want to pay higher wages. It is a fact. Instead of this, we go on some theoretical concept of increasing productivity, without any concept at all for the committee’s consideration tonight as to how they want to do that.

Perhaps that, of course, is linked to reducing regulation. Of course, the issue with reducing regulation, in so many examples in the past, is that it’s often regulations that relate to health and safety at work, that relate to conditions at work, and many of them relate to wages—such as regulations around overtime, for example, and regulations around additional pay conditions such as getting additional pay for working on weekends, or working at nights or shift allowances or meal allowances and all those sorts of things. So when we talk about something that has proven—if left alone, if left to the market solely—it has not benefited workers, and reducing regulations which in so many instances protect workers, I’m failed to be convinced by the Minister’s response that this is an adequate alternative to what is being repealed by this bill.

If we start right from the start, in the purpose, it says the purpose of this Act—in reference to Fair Pay Agreements Act 2022—“is to enable employment terms to be improved for employees”. It’s extraordinary that there are people in this House that would oppose that. I put it that way because one might think that if there was disagreement, this was the best way in which to achieve it. Why on earth—and this is my question to the Minister—why on earth hasn’t it been spelt out, on something tangible that would improve wages for workers in New Zealand? Why wasn’t that put forward: a plan, something tangible, there in place, so that we could debate an alternative? Instead, we have a theory and a loose promise.

First, may I congratulate the Chair Maureen Pugh on her new role and, of course, congratulate the Minister Brooke van Velden as well. Our daughters are looking to you.

Before I ask my question, I would like to remind us that we’re here representing the New Zealand public, and the people of Aotearoa believe in a fair and a just society. Equal pay for work is fair and just. We have evidence and advice from the Ministry for Women, who tell us the gender pay gap is an indicator of the difference between women’s and men’s earnings. We can be proud in New Zealand that we have reduced this gap from 16.8 percent in 1998 through concerted efforts.

Unfortunately, this has fluctuated over the years. The gender pay gap for women compared to men is 8.6 percent; 8.6 percent matters. This effectively means that women work without pay for one whole month of the year. The gender pay gap for wāhine Māori, Pacific, and Asian women and disabled women is significantly higher than 8.6 percent. Minister, I think you would agree that Kate Sheppard is a revered New Zealander. We celebrate women suffragettes. In select committee room 5, we have a whole camellia on the wall to show our respect for women who fought for women’s rights. New Zealand is so proud of Kate Sheppard, in fact, fighting for a fair and just society that she is on our $10 note. Kate Sheppard fought for women’s rights and would be appalled that we are still fighting for equal rights and pay for women.

Fair pay agreements (FPAs) are a key lever to reduce the gender pay gap. The new generation of women deserve equal pay for work. The gender pay gap will not close itself. We cannot become complacent, because the gap will not close without sustained and intentional actions. How will the Minister mitigate the disproportionate impact of stagnant lower wages for women without FPA?

Thank you so much, Madam Chair, for the call. It’s wonderful to have a call given to the South Island, so I appreciate the solidarity for the South Island, Madam Chair, and I also congratulate you on both of your roles here in this House.

I have a number of—I was about to call them Supplementary Order Papers, so forgive me for the old terminology. We now have Amendment Papers, and I have three of these on Part 2 to speak to.

I’ll begin talking about—now, I understand it has a number and a letter on it, so, again, it’s new terminology that we’re using. My amendment inserts, after the word “repealed” in clause 5, “except in relation to grocery, supermarket industry may be concluded and regulated by the provisions of the Act and will not be affected by this bill.” What my Amendment Paper specifically speaks to is the supermarket fair pay agreement, which is well advanced. We know that there is a very large group of supermarket workers who are affected by this legislation and by the original Act and then by the repeal bill that we are debating in the Chamber tonight.

I want to speak to some comments around productivity, specifically in relation to supermarket workers, and what I have is a copy of the FIRST Union submission on the original bill. One of the comments that FIRST Union has made, which I think members opposite do need to actually look at, is that while we do have a productivity challenge in New Zealand, we have a bigger challenge in terms of wage growth. Wage growth has not actually kept up with the small productivity gains that we have had since 1991 and since the introduction of the Employment Contracts Act.

One of the comments that I thought was really useful and absolutely speaks to my experience, having worked with supermarket workers, many of whom are on low wages, is that workers who are worried about money, stressed about money—often I met with workers who hadn’t had enough to eat that day—are not going to be productive workers. So the connection between wages and the ability for people to pay their rent, pay for fuel, feed themselves, and not be worried about whether the mortgage is going to be paid this week, and the stress and the concern that that gives them—these are real-life issues that are faced by supermarket workers.

FIRST Union in their submission—and the reason I raised this submission tonight is that because we have had a process through urgency without going through select committee process, over the past few days I have spoken to a number of supermarket workers, many of whom have given me written contributions that they want me to make on their behalf tonight about what the repeal of fair pay agreements mean to them. So I come back to my Amendment Paper and why I’m specifically wanting to add a statement after the clause here around ensuring that that supermarket fair pay agreement is concluded.

Now, I do have another couple of Amendment Papers in relation to Part 2. The first one would insert new clause 5B, notwithstanding clause 5A, stating that any fair pay agreement currently under negotiation will have its term fixed by the Employment Relations Authority and will still come into force. The reason for my amendment of this nature is to reflect the work that has been done but reflect as well that many of these workers who are covered by the agreements that are currently being negotiated do represent vulnerable workers. And there will be real benefit to us as we’ve talked about bus drivers, for example. We’ve had a significant issue attracting people into working as bus drivers. In our region, Nelson-Tasman, we’ve had to bring in a number of migrant bus drivers to work for the new bus service.

One of the things that we can do is ensure that those fair pay agreements, which have been brought because there was a genuine, valid reason there around the need for higher wages—[Time expired]

Thank you, Madam Chair. I wish to speak to a number of questions that members of this House have raised, speaking firstly to the Hon Kieran McAnulty’s questions regarding why I haven’t specifically spelt out alternatives and different approaches going forward, and that is because my first focus has been to fulfil the Government’s commitment on our 100-day plan and our coalition commitment and then I will consider what else will be effective at improving wages.

I wanted to touch on the Hon Carmel Sepuloni’s questions, of which there were a number, so please bear with me. The cover sheet does not have analysis or evidence to make decisions about what system is preferred, which is what the member was referring to, but of course, what the member is not taking into consideration is that this cover sheet is not the only evidence that’s provided to the member. There was an exemption from the regulatory impact statement requirements that was provided and you can find this in the cover sheet on page 2. It says because there is an existing regulatory impact statement from 2021 already providing analysis on the status quo, we would essentially be carrying out the exact same replica of analysis, so there was no need to replicate what we already had in the original regulatory impact statement. All of that evidence is still valid for the member to read.

She mentioned about a lot of the work having been undertaken by parties to the fair pay agreements already under the bargaining process, but forgot to mention that the agreements are all in their very early stages. So while this law has been in place for about a year, many of the bargaining sides have yet to actually meet. This is why we consider it’s quite important to repeal at this stage because we can repeal it quickly and save a lot of time, resource, energy from the bargaining process when the law would be repealed. It’s important for us to repeal this law before Christmas so people who may be involved in an elongated process don’t need to be because it will be repealed.

There was a question here about the percentage of women, for example, that are in coverage in specific sectors throughout the different types of bargaining process. Now, on the face of it, that sounds like quite a simple question, but it is actually very complex. And that’s because the law is not actually clear who is and is not within coverage within different sectors; which types of employees can and cannot be covered. While I acknowledge it’s a nice question, it is actually very difficult and it would have been difficult for any Government to even find the data for this statistical analysis. A good example for this is if you have a lodge in a very remote area where you have one worker that might be a receptionist, but then they also might be a cleaner and then they also might do waitering in a small restaurant at night, they might be captured by three different agreements under three different industries, and the employer might actually also be covered by a range of different processes too. So that statistical information isn’t available and it might not ever be.

Then there was another specific question there about how much expenditure we had spent on this process. To date, there has been $481,250 in funding been provided to bargaining sides that have initiated fair pay agreements, and there has been $750,000 provided to the New Zealand Council of Trade Unions. Ministry of Business, Innovation and Employment and the Employment Relations Authority received funding through Budget 2021 and Budget 2022 to operationalise and deliver the fair pay agreement system. That funding was $6.33 million in Budget 2021 and $9.226 million in Budget 2022, and for 23/24 the funding is approximately $16.209 million in operating expenditure.

To Kahurangi Carter; she raised some concerns about the gender pay gap—

Hon Carmel Sepuloni: What’s the productivity loss to not having fair pay agreements, is my other part of it.

Hon BROOKE VAN VELDEN: Coming back to the member: because she’s asked for it to be specifically about statistical data in relation to those specific areas that we’d already touched on that does not actually exist, that question is not possible to answer. Kahurangi Carter raised concerns about gender pay gap. I want to note for the member that the Equal Pay Act already creates a framework for inequalities between gender if you are in an equivalent role, but I very much enjoyed her contribution.

I move, That debate on this question now close.

Thank you, Madam Chair. It is really good to be able to take this call and—if I can indulge, Madam Chair—there’s actually a number of items that I’m going to be covering across the various different Amendment Papers that have been tabled tonight in relation to this bill.

One of the first things that I do want to touch on is that, as the member knows, previously to this bill, we just had a bill that removed the maximum sustainable employment element to the Reserve Bank of New Zealand Act. It was brought up in that bill, time and time again, and it is part of this bill that because we are not going through a select committee process, it is imperative that this side of the House, in the Opposition—and, of course, Government members, if they have questions as well—have sufficient time to be able to analyse this bill, to be able to provide contributions as well as speak to the various amendments that have been tabled today.

I just want to touch on, before going into my actual questions for the Minister, a couple of points that the Minister raised around the lack of evidence. So what we do know is this Government is hell-bent on making sure we have evidence-based policy. Now, I appreciate that every Government has their particular tenets and for this Government it’s evidence-based policy. But then what I look to in relation to evidence-based policy is that for us on this side of the House, the reason why we have the regulatory impact statements is especially—especially—when you have a bill going through urgency where you cannot seek advice from officials, you cannot have officials come to the select committee and brief the committee, and you cannot call for submissions, you are able to build, basically, an evidence base from the various submissions from the advice the officials provide you.

So I do acknowledge Ministry of Business, Innovation and Employment (MBIE) officials who are in the Chamber tonight, who have provided a cover sheet, a regulatory impact statement. A really key thing about that regulatory cover sheet is it actually refers to the full impact statement that was provided to the House in 2021 as part of the introduction of the Fair Pay Agreements Act.

If we look to the actual full impact statement, and because it constantly cross-references it—why I am bringing this into the committee is because this is the evidence base in which we here, on this side of the House, not being able to have a select committee process; not being able to call for submissions; call for advice; even have our own independent adviser. I’m going to refer to a number of items within the full impact statement, because it’s been cross-referenced and because that is the only evidence base that we have tonight to be able to scrutinise that bill on the Table in which we form the basis of a number of amendments that have been tabled tonight.

So I look to the full impact statement, and if members like to be able to look at it, I understand the copies have run out on the Table—but we look to pages 58 and 59. Annex Two covers the best capable advice that was provided at the time for wages over time. The reason why I refer to that is because at the very start of that full impact statement, it talks about, “Part 1: The employment relations/employment standards system recognises there is an inherent imbalance of bargaining power in the employment context.” That is in relation to the problem definition, in which there was a Fair Pay Agreement Act, which was passed, and therefore the result of this Government—you have to argue against that problem statement.

But it is clearly set out in the evidence that was provided at the time that we had the Fair Pay Agreements Act that there is an inherent imbalance of bargaining power in the employment context. The evidence base that was provided by those officials is set out in Annex Two, and when you look at the wages over time—for example, figure A2, “Cleaners and laundry workers”: “Approximately 17 percent of cleaners and laundry workers are union members.”; that’s by the by. But then, when you have a look at the cleaners and laundry workers, you look at perhaps over the five-year period, the mean hourly rate is around $18.60 and then you look at the median hourly, looking five years out, to $17.50. Then you look at wages over time. Around 2018, the mean hourly was $18.35 and then the median hourly was $17.25.

So, then, I compare that to, say, figure A3, which is “Automobile, bus, and rail drivers”; “The union density for automobile, bus, and rail drivers is 36 percent.” Now, why this is important, Madam Chair, is because there is actually an amendment that has been tabled by the Hon Willie Jackson at 4.50 p.m. tonight, which says in clause 5 to insert after “repealed”, “except in relation to FPA 01-003-2022 - Interurban, urban, rural, and urban bus transport - Bus drivers, coach drivers, and cleaners”. So, therefore, you compare figure A2 and figure A3, the union density, and you look at the different mean hourly—[Bell rung] Madam Chair, if I can continue.

CHAIRPERSON (Maureen Pugh): I call on the Hon Barbara Edmonds.

Hon BARBARA EDMONDS: Thank you, Madam Chair, very much. So you compare the 17 percent of cleaners and laundries who are unionised to that of automobile, bus, and rail drivers, and that’s at 36 percent. Now, if the committee can remember, I said the five-year outlook: the mean hourly for cleaners was $18.60. In a sector where there is higher union membership, the mean hourly five years out is $25.30. There is actually a considerable difference which shows why having collective bargaining power is incredibly important. So that’s why this is the evidence base in which I support the Hon Willie Jackson’s amendment to this particular bill.

But then we also think about the wider context of why the fair pay agreements was brought in, and it is set to cover around 200,000 to 300,000 workers. Now, the Minister did talk about productivity costs—or perhaps that was the answer that she didn’t actually provide. So, again, going to the full impact statement, the actual cost that there will be—and this is where, for me, it is the worst thing about this particular bill going through urgency and why we didn’t have any evidence base. Back in 2021, it said that there’s going to be an estimated $150 million to $600 million per year total monetised benefits. That’ll be $150 million to $600 million—yes, that’s right—going to some of our lowest-paid workers.

Hon Carmel Sepuloni: How does that not help?

Hon BARBARA EDMONDS: How does that not help the cost of living crisis that that Government absolutely has sworn to try and attack? When this full impact statement in 2021—so there will be inflation on top of that. I’d be really keen to understand from the Minister: what advice has the Minister received in relation to the costs, which are therefore then passed on to the lowest-paid workers? There’s roughly 200,000 to 300,000 workers. So, again, the 2021 full impact statement estimated $150 million to $600 million.

I understand that there are some caveats within the full impact statement that are provided by MBIE; that they had to make some assumptions. But you know what? Forecasting of any policy provides some assumptions. As to their confidence in that assumption, I’m not quite sure because I couldn’t quite find it in the full impact statement. But that’s why it had to go through a consultation process. Again, the policy process: the full impact statement is the very start of the policy process.

So as that time progresses, therefore, you get more evidence to build a base as to actually, “Yes, this is true.” You might have a submitter who does say, “Actually, our median hourly for five years plus is actually more than $18.30 or whatever it is. It is actually around this amount.” Therefore, officials can provide advice to both Opposition and Government members to say to the select committee, “We believe this may actually cost more than $150 million to $600 million. That was at the time; there are rough estimates based on some assumptions.” But again, we are not able to have that evidence or advice at the moment, because we have not been able to scrutinise the bill within the full parliamentary process. That is the issue as to why you have so many members in this Chamber who are standing on their feet asking for time to be able to ask these questions.

For me, as a Pacific woman and a person who worked in an economic and finance place for a long time as my professional career—I come from a family of cleaners. I come from a family of hospital cleaners, who are some of the lowest-paid workers, but, thankfully, they’ve been able to collectively bargain to be able to lift some of those wages. They may not be the wages that they want to have, but actually the ability to stand together as a sector and to be able to argue for fairer pay is exactly what this particular Act tried to do.

So my question to the Minister—and it’s good to see that officials are here on site to be able to help—is: what advice has she received in relation to the costings as to what will be lost by the workers? If it wasn’t $150 million to $600 million—again, the range is variable, but I’m just going off the full impact statement that was provided in 2021. For me, it is clearly shown in the evidence that has been provided in the annex that there is a clear discrepancy by the amount of those who are unionised and by those that aren’t—just using the laundry and cleaners and the bus drivers. So that’s why I stand in support of the Hon Willie Jackson’s particular amendment.

I also want to quickly—while I’ve got the time—absolutely ask the Minister to put in a review. There are a number of amendments on that Table which seek that you do review this, and I absolutely urge the Government, given we haven’t had an opportunity in select committee, to consider a review for this bill.

I just tautoko the kōrero there given from the Hon Barbara Edmonds—one part of the kōrero she talked about. I come from a family of blue-collar workers, too. My mother was a cleaner here, actually, in the late 1960s-1970s. I know that’s probably an occupation foreign to most of the other side, who probably haven’t even cleaned their offices. But the reality is that, for us, it’s heartbreaking actually, as we put this forward, because, as my good friend Barbara Edmonds said, it’s the most vulnerable workers who are being targeted here—the most vulnerable.

As I said earlier, and I’ll continue to say with regards to this kaupapa, here we are, a week or so away from Christmas, and we’re putting up this bill. Here we have bus drivers, cleaners, and coach drivers, hospitality workers, security officers, commercial cleaners, early childhood education workers, and supermarket workers all being targeted with this bill. So that’s the reason why we’re supporting bus drivers in this particular instance.

Being a bus driver is not the most glamorous job, Madam Chair—well, you wouldn’t know, of course, probably having everyone drive for you! But the reality is that it’s not a glamorous job. My good friend here Helen White has represented bus drivers in Auckland as a lawyer in former times, and they’ve had a real push in terms of their conditions. Axing fair pay agreements will shave up to $10,000 a year off a bus driver’s salary—that’s just according to the Council of Trade Unions, who are a very reliable source, as we all know. They said that on Checkpoint today, and they also said that the Government’s plan, in terms of getting rid of the policy by Christmas, is really threatening the lives of so many people.

There seems to be an inability to understand that, and an inability to understand also that bus drivers keep quitting—and have been quitting for the last couple of years. It’s normal for four or five bus drivers to quit each week because the conditions are just too much for them. They’re saying that they never see their families. The new recruits are not lasting long. They’ve said the hours are just far too strenuous. So, in terms of what’s been happening with regards to the drivers, the question I have for the Minister is: what’s her consultation been with the bus drivers?

With us deciding to not have a select committee process, obviously that would have been an opportunity not just for drivers but for workers right across the spectrum to have put a few questions up, to discuss their future. What sort of consultation has the Minister had? Is she still considering consulting with bus drivers? Because the reality is that the right thing is not being done by this Government, and these workers deserve respect, deserve to be treated in the right way. As I said, it’s not the most glamorous of jobs, but a job that’s being filled by immigrants, Pasifika, Māori, people who make contributions in our community, and the consultation process has been a huge priority for us.

So the question is: has there been any consultation? Will there be any consultation? Is there any process? Or will you just walk all over these workers, like National and National Governments always have done in the past? What is the strategy going forward?

I move, That debate on this question now close.

Thank you so much, Madam Chair. Well, I’m really pleased to be able to speak to the proposed amendment in my name, which is to add a new clause: clause 8. I think the bill would be really strengthened by adding new clause 8. New clause 8 specifies that the Ministry for Business, Innovation and Employment must undertake a specific analysis and report to the Minister on the particular impact of market flexibility. That’s really important, because in some of the debates we’ve heard in the first and the second reading of this bill, there’s been a lot of discussion around flexibility in our employment market and how important it is to have that flexibility.

One of the real points of contention that we are still not able to see eye to eye on is the fact that this side of the House has the view that fair pay agreements would improve market flexibility. It’s for that very reason—because if you have a bottom line in terms of employment pay and working conditions that operate in Gisborne or in in Southland or in Northland, and if you are a dairy worker, for example, in any of the different areas or a manufacturer in those areas, it means that you can uplift your family and go to a different part of New Zealand and you are guaranteed the same wages and conditions. So for employers in some of those parts of New Zealand that struggle to seek and get employees, that means that we have greater market flexibility if we have a bottom line in terms of conditions and also wages right across the board.

What my amendment to the bill proposes is that there needs to be that analysis for the impact of market flexibility on the New Zealand economy over the past 40 years, and also what impact this has had on the wages of New Zealand workers. It specifies in new clause 8(2) of the proposed amendment that this must be provided no later than one year after the assent of the repeal bill. So it’s really important if we’re going to be taking this step, that we need to be gauging what kinds of impacts this legislation does make not only to the flexibility of our labour market but, hopefully, it will provide some really helpful insights into the impact on productivity. That’s one of the key areas that I’m really interested in understanding, which is: if this legislation does go ahead, what is the impact on New Zealand’s productivity overall?

My fear is—my real fear is—with this bill if this goes ahead, that if we just have a race to the bottom, if we do just have this race to the bottom, what are the incentives for employers to innovate to provide new ways of doing things? Having a built-in ability to really assess what this is doing to our market flexibility for employment and the productivity generated from New Zealand’s small businesses, that’s an important way to do it, because we’ve already noted that—actually, actually earlier in the House today it was mentioned that about 80 percent of New Zealand’s business is small businesses. It’s more like about 98 percent of our businesses are small businesses, and a lot of those ones are in fierce competition.

As a Government, would you not be thinking that you would want to gear that competition to innovation, to bright ideas, to be able to market ourselves offshore, not to race each other to the bottom—like, who can pay out our workers the least possible amount of wages in order to mark up your profit margins? Would you not want to be creating something new and innovative that would actually be able to drive your profit margins in a different direction, that wasn’t just focused on milking what you can out of the workers? I think if we build this part into analysing what the flexibility is, I think that would be a huge improvement. I think by having that review, by having that review in place, I think that that would really improve and strengthen the current legislation.

I’d just like to point out that there’s a third part in terms of clause 8 of the new proposed amendment, and it says that the Minister must—“must”, which is a strong word, I agree; “must” is a big word, but we’ve got it in there—within 60 working days of the day the review is provided, the Minister as required to present it back to the House of Representatives. So it provides this House with another opportunity, just like this one right now, where we can have this discussion about where we are progressing and how we are factoring in—[Time expired]

I hardly believe my ears. Thank you, Madam Chair, and congratulations on the new role, and congratulations Minister. I want to also acknowledge the Opposition for their support for this important discussion; it’s really, really heartening actually to have that support from the opposite side.

One of the things that I’ve really come to love about Wellington is the great public transport. It’s not perfect, and we do need more cycle lanes, and we do need to get Wellington moving, but public transport is going to play a really vital role in our lives in the years ahead, and it’s vital to our economic and environmental future.

It was also really nice to hear about Katie Nimon’s family bus business during her maiden speech. I know that we have some common interest in public transport across the Chamber, but buses won’t move without skilled and considerate drivers to drive them—they won’t move. Buses are no good if we don’t have drivers.

I live in Ōtepoti—Dunedin—and for years bus companies have been engaged in a race to the bottom in terms of wages, with drivers working split shifts and often engaging in second jobs just to put food on the table. Dunedin bus drivers have even had to pee behind bushes and limit their water intake—not like in the Chamber—so that they can keep at work because there are no toilets. So the Minister might argue that repealing fair pay is just tidying things up, but I’d argue that it’s far tidier and healthier to provide good conditions and support bus drivers in Aotearoa rather than encouraging them to head to Australia.

So my question to the Minister is: does the Minister acknowledge that bus drivers in Australia, who have benefited from sector-based bargaining, are paid 40 percent more than here in New Zealand, and, if so, how will she bridge the gap without sector-based bargaining here? And does she have any evidence to back how she aims to close the gap? Kia ora.

Thank you, Madam Chair. I’d like to go right back to the question from Rachel Boyack. She has a number of Amendment Papers that she’s brought to the committee—specifically, one she touched on would allow the supermarkets to conclude their fair pay agreement. While I acknowledge she may have brought this in good faith to the committee, we have made a commitment, as a Government, to repeal the fair pay agreement legislation. Allowing the system to continue for one sector would go against the commitment that we brought to this House, but also our commitment to New Zealand voters, who are expecting us to deliver on our commitment from the campaign.

I’d like to touch on the question from the Hon Willie Jackson about consultation that’s done with bus drivers, and I’m loving the questions about bus drivers, who are wonderful people. We discussed the repeal of the fair pay agreements with the New Zealand Council of Trade Unions, who represent unions across New Zealand. The bus drivers had an opportunity to comment on the introduction of the fair pay agreements system during the consultation of the original fair pay agreements system. Based on what we heard, there were people who were for, and people who were against, and as a—

Debbie Ngarewa-Packer: Point of order, please, Madam Chairperson. My apologies—we can’t hear. Sorry, but we can’t hear you, Minister.

Hon BROOKE VAN VELDEN: Thank you very much, Debbie. I will speak up for you. So talking to the consultation that occurred when the original Fair Pay Agreements Act went through, we heard comments in opposition and comments for. That was quite extensive, and, at the time, the National Party and the ACT Party opposed that bill, and we continue to oppose it now. We went into that election clearly indicating that we would repeal this law, and the voters responded in kind.

To the questions from the Hon Barbara Edmonds—she talked about things specifically in pages 58 and 59 of the regulatory impact statement from 2021, speaking about an inherent imbalance of bargaining power. I’d just like to remind the member that the Employment Relations Act provides a legal backdrop for all relationships between employees, employers, and unions. She also then touched on what costs we’d received advice on—to do with the repeal. The cover sheet refers to the costs and benefits described in the 2021 regulatory impact statement. So I’d refer the member to the tables on pages 42 to 50 of the 2021 regulatory impact statement.

To the question from Ginny Andersen, specifically taking about the amendments that she would be looking to take about market flexibility and studies, I’m delighted to tell the member, I expect to do my own advice and information on the market, independent from the member, and that does not need to be in this bill.

I move, That debate on this question now close.

Mr Chair—

CHAIRPERSON (Greg O’Connor): Just hold on, to that member. I have been watching the debate for the last hour, so I’m well aware of where we’re up to. Just the presence of a new person in the Chair doesn’t actually change much. So carry on the way you have been. Start the clock again, please.

Hon GINNY ANDERSEN: Thank you very much Mr Chair. Well, just to pick up where I was likely to continue previously is that I’ve actually got another proposed amendment. There’s another proposed amendment, and that is a new clause 6, which has been presented to the House. So the new clause 6 that is proposed to amend this bill is that the Royal assent of the bill is contingent on a review by the International Labour Organization (ILO), ensuring that New Zealand is compliant with all international obligations including ILO conventions and free-trade agreements. So, it’s really important that we take into consideration those ILO, which will ensure how we’re complying.

One of the points I’d like to pick up is the fact that one of the things alleged in the first and the second readings is that fair pay agreements would actually result in strikes. I’d like to clarify that point right now that there is no ability with the proposed fair pay agreements that would result in strikes. So that’s actually misinformation and it’s one of the points that the ILO picked up. They actually felt that we should have fair pay agreements that would enable workers to strike. So that’s something that we did not comply with in terms of what those ILO specifications would have been.

So there’s been a lot of discussion in this Chamber and allegations from those members opposite that the introduction of fair pay agreements would not only introduce the opportunity for more striking but it’s actually been alleged by, in fact, Nicola Willis, when I was on Newstalk ZB with her last week, that it would make all those who were part of a fair pay agreement required to be part of a union, and that’s just not true. That’s not true at all. It is true that unions would negotiate these agreements, but all workers would benefit from the negotiation that takes place, and it doesn’t necessarily mean that the workers who benefit from a fair pay agreement would have to be a member of a union. So I think it’s really important that we specify those differences and it’s really important that we understand the benefits of what fair pay agreements would have actually done for New Zealand in terms of workers’ rights and also by, I guess, rewarding and encouraging and supporting good employers.

We’ve heard many stories from members opposite about what a good employer looks like. We’ve heard from Mark Patterson tonight about—was it 16 years that a manager has worked for him? And we know that there are good employers out there and we want to encourage people like Mark Patterson, who has had a manager working for him for 16 years.

So how do we do that? We do that by encouraging good wages and good working conditions right across a sector and we don’t do that by having a race to the bottom of who can pay their workers the least and have the most restrictive working conditions possible. That’s not how we encourage market flexibility for our labour force and that’s not how we increase productivity. Because at the heart of the Employment Relations Act is the fact that there is an employee-employer relationship, and that is based on good faith and that is based on having a good working relationship between an employee and an employer. And fair pay agreements seek to extend that over a whole sector so we can work well within our working environments and we can both have mutual benefits out of that

So what this bill does, what this change does, is it takes away that good faith. It takes away that across a sector, and it means that there will be big differences with bus drivers, with manufacturers, with hospitality workers, with a whole range of different areas where we have poor and bad employers who exploit their workers. We’ve seen this in New Zealand recently with immigration—those who exploit them. Those good employers are dragged down for the fact that poor employers drag their name down. So that’s the loss in this legislation. The loss in this legislation is those good, hard-working employers who have employed people for many years and supported many people off their own shoulders. Those are the ones that are also penalised.

But we should not forget that the ones that are most penalised in this are those people that clean our floors, that look after our children, that drive our buses, that will be earning less this Christmas, that will afford less on their table, fewer Christmas presents. They will have less money because of the selfishness and the self-interest that this bill inflicts upon New Zealanders.

I usually allow a range of members to speak before I respond, but I must respond to that statement. Nobody will be worse off this Christmas because there have not been any fair pay agreements finalised. Nobody will be having lower wages because of the repeal of this Act.

I just remind members, particularly those on my left, that a presentation at this stage would generally end with a question for the Minister in the chair.

I don’t want to make this debate about whether we are opposed to employers, because sometimes the value is that we should be about promoting and encouraging good employers to be great employers. We should also be making sure employees can be safe employees, and it is absolutely true what we’ve heard over here. We all know some really great employers; great employers which I’ve been part of since I was 18 years old, being self-employed. Our small to medium sized businesses are really critical to our economy, and I’m glad that I belong to iwi and to entities that are enjoying investing and being part of these types of businesses. However, unfortunately, that is not always the case. Some of this legislation is being drafted and created for the vulnerable, and that is really what we’re answering about and challenging about: our different views of where we see we belong in looking after the most vulnerable. So I do want to be really clear on what it is that we’re asking for.

I understand the debate and, actually, to be fair, I understand the Minister’s approach and what it is that she’s wanting to focus on. But I guess what we also need to remind ourselves of is that the protection of the vulnerable has come because of the work, the hard work, of the unions. What we saw today and what we’ve heard in a really short amount of time is that multiple unions agree on what it is that we’re looking at today. There is limited evidence that we’ve seen from the Ministry of Business, Innovation and Employment. They have told us that they were restrained or constrained because of time lines. They were constrained by the fact that there’s a Government in with a very—depending on where you sit—progressive or aggressive 100-day plan and this urgency kaupapa that we have.

New clause 8 in our amendment is actually about a repeal—to make sure that it is subject to a review. Now, I don’t think that’s asking for too much. What we’re simply saying to the Minister is that, look, let’s assume that it doesn’t go to plan and that we have a review undertaken in three years to investigate how the terms and conditions, particularly for those who are disproportionately affected—and we’ve all heard that; that’s not us making it up, those are facts. We have a disproportionate group of our employees, our workers who are often our whānau, Pasifika, Māori, wāhine who are affected. We see it often in the sectors across early childhood education, the bus industry, the security industry, cleaning, supermarkets, and hospitality.

What we’re asking is that there is a decency applied to this if it doesn’t go the way—and this 100-day plan—that the Government wants, and we have a pou, we have a measurement, we have a marker to say, “Is this going the way we want and how else can we ensure the terms and conditions of those who are disproportionately affected are going to be monitored?” If we get to a point and we say, actually, this hasn’t going the way we thought it was, it’s working really well in this area for those of us who have been and are business owners who are employers but in fact it’s made the gap worse for those who we didn’t want to see disproportionately worse through this period.

The other thing that I do want to ask the Minister again is what is the plan if it doesn’t work? Can we surely put aside the differences that we have fundamentally or philosophically tonight and look at why the Minister wouldn’t support our amendment to ensure that there is a review, that we continue to be proud to grow, as I said, good employers to be great employers; good employees, employees to be able to be looked after; and the most vulnerable are not targeted, because at times that’s how it’s coming across. Kia ora rā.

I thank the Chair. I wanted to respond directly to the question from Debbie Ngarewa-Packer. Talking about her Amendment Paper—she’s requiring a review of the repeal after three years, and for that review to consider the impacts of that repeal on the specific sectors within the fair pay system that were initiated. It just would not make sense in practice for that review because there have not been any fair pay agreements finalised. There is nothing to compare the impact of that review to. So the whole concept of the Amendment Paper does not work in practice.

To the question of Ginny Andersen asking for comment about Nicola Willis’s comments—I haven’t heard those comments directly—specifying that workers needed to belong to a union for the fair pay agreement. The fair pay agreement system does actually specify that the only entities who could represent employees in bargaining are entities, and not employees themselves, and so in effect, no, the person doesn’t have to join a union, but they can only be represented by a union in that bargaining process.

Where there was a bit of discussion about international obligations, the fair pay agreement system does engage our international obligations relating to strikes, freedom of association, and voluntary collective bargaining. But repealing the fair pay agreement system will actually avoid us engaging our international obligations.

I move, That debate on this question now close.

The question is that debate on this question be now put.

Hon Member: Point of order.

It won’t be in relation to my decision to put this question. I’ll take a point of order on anything else. Right.

Members, before we come to voting, I’ll inform the committee that we’ve received a number of tabled amendments on this part of the bill. Some are in order and will be voted on. A number of amendments would make repeal of the Fair Pay Agreements Act contingent on an indeterminate event—these are out of order. Others have been ruled out as contrary to the bill’s objects and principles. I remind members that the scope of a bill to repeal an Act is quite narrow.

The question is that the Hon Jan Tinetti’s tabled amendment to clause 5 to exempt the early childhood education industry fair pay agreement be agreed to.

The question is that Rachel Boyack’s tabled amendment to clause 5 to exempt the grocery supermarket industry fair pay agreement be agreed to.

The question is that the Rt Hon Adrian Rurawhe’s tabled amendment to clause 5 to exempt the security officers and guards industry fair pay agreement be agreed to.

The question is that the Hon Willie Jackson’s tabled amendment to clause 5 to exempt the bus drivers’, coach drivers’, and cleaners’ fair pay agreement be agreed to.

The question is that Helen White’s tabled amendment to clause 5 to exempt the hospitality industry fair pay agreement be agreed to.

The question is that Arena Williams’ tabled amendment to clause 5 to exempt the commercial cleaners’ fair pay agreement be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment to clause 5 to retain bargaining support services be agreed to.

Rachel Boyack’s remaining tabled amendments to clause 5 are out of order as inconsistent with the principles and objects of the bill.

The Hon Willie Jackson’s remaining tabled amendments to clause 5 are out of order as inconsistent with the principles and objects of the bill.

The question is that the Hon Phil Twyford’s tabled amendment to clause 5 to require fair pay agreements on a case by case basis if the Minister is satisfied be agreed to.

The Hon Phil Twyford’s tabled amendment to insert clause 5(b) regarding union access to workplaces is out of order as outside the scope of the bill.

The Hon Phil Twyford’s tabled amendment to insert clause 5(b) regarding actions in progress relating to fair pay agreements is out of order as inconsistent with the principles and objects of the bill.

The Hon Phil Twyford’s tabled amendment to insert clause 5(b) regarding consultation is out of order as relying on an indeterminate event.

The question is that Camilla Belich’s tabled amendment to insert clause 5(b) to allow fair pay agreements on a case by case basis be agreed to.

Camilla Belich’s tabled amendment to insert clause 5(b) to replace “FPA Act” with “Minimum Pay and Minimum Standards Act” is out of order as contrary to the objects and principles of the bill.

Camilla Belich’s tabled amendment to clause 5 to make repeal contingent on minimum wage matching CPI is out of order as relying on an indeterminate event.

The question is that Arena Williams’ tabled amendment to insert clause 5(b) to retain paid union meetings be agreed to.

The Hon Jan Tinetti’s tabled amendment to insert new clause 5A to continue FPAs in areas where Māori, Pasifika, young workers, disabled workers, and women will be disproportionately impacted is out of order as contrary to the objects and principles of the bill.

Arena Williams’ tabled amendment to insert new clause 5A prevent discrimination against workers involved in fair pay agreement processes is out of order as outside the scope of the bill.

The Hon Ginny Andersen’s tabled amendment to insert new clause 5A to make Royal assent contingent on ILO review is out of order as relying on an indeterminate event.

Helen White’s tabled amendment to clause 7 to make repeals subject to a right for employees to raise a personal grievance in relation to fair pay agreement processes is out of order as relying on an indeterminate event.

The question is that the Hon Jan Tinetti’s tabled amendment to insert new clause 8 regarding a requirement for the Minister to seek advice on improving worker terms and conditions be agreed to.

The Hon Ginny Andersen’s, Helen White’s, and Arena Williams’ tabled amendments to insert new clause 8 to make the repeal subject to a review on worker terms and conditions is out of order as relying on an indeterminate event.

The question is that Helen White’s tabled amendment to insert new clause 8 to require bargaining sides to continue to discuss industry issues be agreed to.

The question is that the Hon Ginny Andersen’s tabled amendment to insert new clause 8 to require a ministerial report on market flexibility be agreed to.