Fair Pay Agreements Bill

I present a legislative statement on the Fair Pay Agreements Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Fair Pay Agreements Bill be now read a second time.

It is most appropriate that this piece of legislation is continuing its passage through the House this week, because tomorrow is Thank Your Cleaner Day, a day on which we are called upon to recognise and remember the essential work of cleaners right across our society, here in Aotearoa New Zealand and right around the world. Cleaners are actually often not seen. I’m very conscious of the fact that in office blocks and factories and, indeed, in these halls of Parliament, it is often after we have finished work, left for the night, and gone home that cleaners come into our workplaces and ensure that they are clean, safe, and hygienic for all of us to be able to work in.

Can anyone argue with the value that cleaners bring to our society, particularly when we reflect upon the one-in-100-year pandemic that we have just gotten through? How could our workplaces, how could our hospitals, how could our other environments—our aged-care homes—continue to have functioned without the essential work of our cleaners? Yet, as is the fact that often their work is done at night, sometimes they have been invisible, and certainly that has been the case within our employment relations system. Often, these people are the worst paid with the worst conditions and the least secure work in our country.

The Fair Pay Agreements Bill is about changing that. It is about making sure that workers like cleaners and many others once again have a voice, that we stop the race to the bottom that for over 30 years has brought down pay, conditions, and security for many workers doing this critical work in our society. It’s our cleaners, our bus drivers, our security guards, our retail workers, our orderlies, our aged-care workers, our early childhood education teachers. Our society relies on the work of so many of these workers, but the race to the bottom that they have experienced has meant that their work has not been valued as it should, and, at its core, that is what fair pay agreements (FPAs) are about. They are about valuing work.

Consistently, the message goes out from this Chamber about the value of work, and sometimes people who do not participate in work are derided for not doing so. Well, if we put that value on work, as I believe and the Labour Party and the labour movement believes we should, then it is utterly inconsistent to not ensure that that work is paid for in a fair and a just way.

Fair pay agreements are also fundamentally about recognising that every good and every service that we consume in our society comes about because of the contribution of both the employer and the employee, of both capital and labour working together. So it is not unreasonable—in fact, I would propose that it is entirely appropriate—that both of those parties have a seat at the table when it comes to fundamental conversations and discussions and bargaining about how the fruits of economic growth are shared in our country.

Finally, fair pay agreements are about recognising that a basic minimum floor—because that is what fair pay agreements are—is good for workers in terms of protecting their pay and conditions, but it is also good for good businesses, because the good businesses, the overwhelming number of good businesses, who want to pay fair pay and conditions and want to do the right thing and want to take the high road, they’re the ones who are undermined by the race to the bottom, because the bad guys get the competitive advantage by coming in underneath that. Fair pay agreements, by putting that minimum floor in place, ensure a level playing field for the worker and also for the good employer.

Fair pay agreements will not affect all workers in New Zealand, and I doubt even that they will end up affecting most workers in New Zealand. But for those workers who need it, who have lost their voice and who have suffered from that race to the bottom, fair pay agreements will bring some justice and some dignity.

The method they will use for doing that is not even a particularly novel or new or unique one in our world. It is the core mechanism of collective bargaining that consistently has been the way in which the inherent imbalance of power in the employment relationship has been dealt with here in New Zealand and internationally for 150 years. It is the proven mechanism for ensuring that there is a degree of fairness and equality across the labour market. It is these groups of workers who have missed out on that mechanism for 30 years, since the Employment Contracts Act.

As I said before, ending the race to the bottom is good for workers and it is good for good employers, but it is also one of the keys to getting on the high road with a high-growth, high-productivity economy in which we shift away from an economic model which is based on competition around low cost and low wages to an economic model that is based on competition about the things that actually drive value and prosperity. Competition that is based on the quality of goods and services is good. Competition that is based on innovation and R & D is good. Competition that is based on increased rates of productivity is good. We support those things, but we undermine that direction when we set up an employment and labour market that is based on competition that is based on low wages. In bringing forward the fair pay agreements legislation, this Labour Government fundamentally sends the message that competition based on low wages is not where our country should be.

I want to thank the Education and Workforce Committee for their consideration of this legislation. They received 1,800 submissions and went through 29 hours of oral submissions.

In my first reading speech, I was very clear that this is a complex piece of legislation. It is a new framework for employers and employees to work with. I expected that the legislation that came back, having heard submissions, would look different, and, indeed, the select committee have done their job well. They have come back and they have suggested a range of practical changes to the legislation in response to submissions that they heard to ensure that it works as effectively as possible for everyone who will be part of the system. They have incorporated changes around the backstop mechanism, they have made changes to the purpose statement to be much clearer about the intent of the legislation, and they’ve put in place practical changes around how coverage will be defined to ensure that there is as much clarity as possible about how and when FPAs will apply to employees. They’ve made changes to ensure that skills and training and leave provisions are mandatory to agree within fair pay agreements, in response to submissions, and for the public interest test they have provided clarity that pay and another factor will need to be met before the public interest test to initiate bargaining is proceeded with.

The select committee process has also been a great time to bust myths about FPAs, and there have been so many of these as part of a calculated campaign of disinformation against FPAs. So let’s be clear about this in the House. The lines that have been put about that people will have to join unions—untrue. The lines that have been put about that there will be strikes and lockouts—untrue; not allowed under this legislation. The lines that have been put about that employers will not be able to bargain with the employees—untrue. The line that was put about, laughably, that somehow this piece of legislation would breach international labour law—well, when that argument was put at the International Labour Organisation, you could’ve heard the tumbleweed blow through the halls in Geneva, such was the weakness and the implausibility of that argument.

When you take away the disinformation that has been put about in opposition to FPAs, all that we are left with is a primal and inflexive hatred of unions and collective bargaining from the parties opposite, and that will come through in spades in their speeches in this debate, I am sure, this afternoon. Well, they will be proven wrong. FPAs, as they have been around the world, will be proven to be good for our economy and good for good businesses. Many countries around the world with better levels of productivity have sector-based bargaining agreements of this kind that we are proposing here in New Zealand. FPAs will support us on to that high road, and many of the things that have been claimed will simply not come to pass. A race to the bottom is no way to drive a highly productive and fair economy, and that is why we must make this change at this time.

FPAs will make a difference to those cleaners and those other workers who keep our country going, who kept our country going during COVID when we needed them the most and have been undervalued for so long. My colleague opposite this morning claimed very blithely that those people are not underpaid. Well, that is an argument that he can seek to sustain. The reality is that much of the opposition to FPAs comes from some of the people and organisations in this country who are paid the very most telling those who are paid the very least that they should be grateful for what they’ve got and not dream or not hope for anything a little bit better than what they’ve had for 30 years.

As I said at the beginning, tomorrow is international Thank Your Cleaner Day. Saying thank you is a good start—it’s a decent thing to do—but it’s not enough. On this side of the House, we are backing those workers and we are backing that thankyou and those words with real change through this legislation that will make work fair again. I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Madam Speaker. The National Party will not be supporting this bill, the misnamed Fair Pay Agreements Bill. Indeed, if we are lucky enough to win the next election this time next year we will repeal it forthwith, because this is not about fair pay; it’s about imposing mandatory union deals on New Zealand workforces and making them less agile, less flexible, at a time when they need to be both of those. It’s bringing back nationwide agreements across occupations and across industries, making it more difficult for New Zealand businesses to have the agility and flexibility that they need.

When we’re talking about the context—and the Minister talked about the context—this is the day where we’ve announced that inflation has hit 7.2 percent. Inflation and the cost of living facing New Zealanders is out of control—over 3 percent for the sixth quarter in a row. National’s plan to eliminate or to fight back against that inflation is about getting the Reserve Bank focused on its single mandate.

One of the issues is about reducing costs in the system, because this is a Government that point blank refuses to accept the basic proposition that if you add costs into the economy, eventually many of those costs end up with the consumers. Secondly, as well as dealing out of a context of a cost of living crisis, where New Zealanders are struggling to pay for the things that they need in the supermarket, to pay for the rent, to get by—including the cleaners of this country—many New Zealanders are struggling to get by and facing real pressure at the checkout, as well as that we’ve got an issue in terms of New Zealand’s growth and investment. We live in a dangerous world. We live in a world where globalisation has been retreating, where protectionism is rising. New Zealand, as an economy, is going through a difficult phase and we need to be focused on how we grow, how we become more productive—that is how we deliver the higher living standards and the higher wages to which we all aspire.

When we look at this legislation we don’t see much hope on any of those fronts. What we saw introduced by this Minister—first up, he rocked up here, in Parliament, with the fair pay bill, and on day one had to introduce a massive change to the bill that he was just introducing. He was introducing a whole new backstop system because he thought he had the support of Business New Zealand, but in terms of dealing with this, he didn’t.

So what are our main concerns about this legislation? First and foremost, that it makes our workforces less agile and less flexible at a time when they most need to be. Because, ultimately, what it means is that the same set of terms and conditions have to apply to large businesses and small businesses. Think of supermarkets or checkout operators, which might be one group that we might hear from. So what’s got to work for the very large Countdowns and New Worlds and Pak’nSaves also has to work for the little place in Hokianga with two people. It doesn’t take too much imagination to think that there might be different requirements for both those circumstances. And if you’re in a small little business trying to operate and make a living, get by, struggling, you’ve gone through COVID, you’re struggling with all sorts of additional costs that have been thrown at you by this Government—another week’s sick pay, no trouble, let’s have it. Another public holiday, yeah, no trouble, let’s have it. A whole bunch of other things: higher minimum wage, yes, throw it all out there. Don’t worry, all these extra costs will magically just be absorbed by everybody and there won’t be any impact on the prices that New Zealanders pay at the checkout.

So this is the second thing: it will add to the costs that New Zealanders face. Interestingly enough, Retail New Zealand did some surveys of New Zealanders on this legislation and found that only 29 percent of New Zealanders thought that this was good legislation—29 percent. But 75 percent were concerned about price increases that will come through because of this legislation, because there is no magic in this world, Minister Michael Wood—there is no magic. If you add extra costs on to businesses, eventually they flow through to consumers. New Zealand consumers, when they’re trying to buy their broccoli, when they’re trying to buy their cauliflower, when they’re at the supermarket, see the prices going up like that, and they’re rightly worried that this legislation will add to those costs and add to that pressure. So his timing, in terms of bringing this out on a day when inflation is at 7.2 percent in New Zealand and mortgage rates are going up, couldn’t be worse.

Another 63 percent of New Zealanders are worried about the fair pay surcharges that they can expect to be seen. Because if you think of the hospitality sector, what will they be doing? They’ll have a fair pay agreement right across the hospitality sector, bringing in a whole bunch of penal rates for the weekends and for the evenings and for unsociable hours, and, of course, what will that mean? Well, it will mean more surcharges on the weekends, or it may well be that places close. So 49 percent are worried about reduced retail hours, that the shops won’t be open anymore because they won’t be able to afford to open because of the extra costs being imposed by this legislation. So as well as making our workplaces less flexible—giving workers less flexibility to have arrangements that suit them—this legislation adds costs to the New Zealand economy, which will be paid by New Zealand consumers, and those New Zealand consumers are particularly worried.

Now, there’s two particular groups that are most affected, those where what they’re selling is, ultimately, discretionary—people don’t have to buy it. Hospitality is one such sector, and retail. Ultimately, you don’t have to buy a cup of coffee if it’s going to be seven or eight bucks; you can stay home. Those businesses are increasingly under pressure under this Government. The other area, of course, is the internationally competitive business, because the cost structure does matter. They might dream it away and think it doesn’t, but it does. People around the rest of the world want our products. If they are really good, they’ll pay a premium for them, but they are still fundamentally interested in the price, and so cost structure matters.

There are lots of specific issues that we have with this bill. We are stridently opposed to the obnoxious triggering regime to start this process. So what happens is if you took, for example, retail workers—and there might be 100,000 of them across the country; there might be 200,000 of them across the country—all it takes is 1,000 to sign up to start the fair pay agreement process; 1,000. So, it could be fewer than half of 1 percent if you’re in a large industry. A tiny little minority can decide to start this process, and once it’s started there will be a fair pay agreement—there’s no stopping it; there is nothing to stop it. So it starts, and then everybody is drawn into this debate, and it doesn’t matter if you don’t know anything about it; you don’t have any say in it. You’re not interested; it’ll still affect you and tell you what you and your business and your employers have to do. That’s outrageous, it’s wrong, and we oppose it.

The second thing with this is it reduces competition. So half the time the Government comes into Parliament and says, “We’re tough. We’re going to take on the duopolies in the supermarket regimes. We’re going to toughen up competition.”, and then the other half of the time they bring in legislation that helps the very same big players in any market. So, I mean, think for a moment about how this impacts them. If you’re talking about supermarket workers or checkout operators as a fair pay agreement, who do you think’s going to be organising it; who’s going to be designing it? It’s not going to be the little shop in Hokianga with two employees. No, it’s going to be the two big players that organise it. And do you think they’ll do it in such a way that suits the Hokianga person with two people working for them? No, they’ll be doing it to suit them. This regulation, like most regulation in the economic space, helps the big players. Half the time they come into Parliament saying we’re going to get tough on the duopoly in supermarkets; the other half the time they bring in legislation like this, which makes it easier for them and harder for the small players. Because, just think for a moment, if you’re talking about meal-time breaks and double pay and things that you can cope with if you’ve got 10,000 employees but are impossible to deal with if you’ve got one employee working in a shop and it doesn’t have the flexibility to—you just have to think for a moment of how unhelpful this will be for the small operators. It makes it difficult.

This legislation includes a whole bunch of mandatory things that need to be considered as part of the misnamed fair pay agreement, including base rates, payment for overtime, penalty rates. All these things have to be included in the fair pay agreement. Nowhere would you find any reference to the productivity of the other company. That’s an irrelevant factor as far as this Government is concerned. If we’re thinking about how you design higher incomes, productivity is the key, nowhere to be found. The National Party sees this legislation for what it is. It’s about imposing mandatory union deals on New Zealand workforces. We don’t want it, it’s not going to help, and if we get a chance, we will repeal this legislation as quickly as we can.

Thank you, Madam Speaker. It’s a real privilege to take a call on the Fair Pay Agreements Bill.

I’d like to start with a quote from the report of the Fair Pay Agreement Working Group, because this is a group that made independent recommendations to the Government on the scope and design of a fair pay agreement system. I can see some members on the opposite side of the House starting to smile because they knew very well that the work was chaired by the Rt Hon Jim Bolger, and that is a person who is probably well-known to the other side of the House. He opened the report as follows: “We believe we have designed a Fair Pay Agreements system which will be most useful in sectors or occupations where competition is driving a ‘race to the bottom’ in terms of wages and conditions.” At the same time as the Fair Pay Agreement Working Group report, there was independent research undertaken by Business and Economic Research Ltd. They stated, on sector bargaining, that it had, in fact, “zero economic risk”. They called it a “fairer distribution of wealth”.

So what will fair pay agreements actually do? They will help turn around those decades of Government policies designed to increase flexibility of labour as a way to increase productivity. But what the policies actually did—and, Mr Goldsmith, you should be listening to this—is they absolutely failed New Zealand’s workers. This productivity meant that the workers saw their share in the growth of the economy actually decline over those years, and that was the pattern that was developed after the Employment Contracts Act (ECA) came in in 1991. Within a few years of the ECA coming in, wages and conditions across many professions and industries actually reduced significantly.

Now, Mr Goldsmith mentioned the supermarket sector, and I think we should specifically look at the supermarkets, because if you compare, for example, 1997, which was after the Employment Contracts Act came in, the wages were 11 percent higher in 1989. By 1997, part-time checkout operators earned 30 percent lower than before the Employment Contracts Act came in, because what the law change did was it pushed the cost of operating on to the workforce through lower pay. Helen Kelly described this really well in the biography that’s been written about her. It said, “The breakdown of standard wages and conditions across the industry fuelled a race to the bottom. Supermarkets paying higher wages would point to their competitors paying less and argue they too had to cut labour costs.”, and that’s what happened.

So another good example that many will relate to—especially here—is, of course, the buses in Wellington. Bus companies had to compete against each other and they could only win the tender if they were the lowest cost, and the tenders were really specific. They stipulated where the buses had to be and at what time and how many seats and what fuel and even what fabric had to be on the seat—as I learnt—but the only thing they didn’t stipulate was the labour cost. The tender process was solely based on the lowest price, and the company with the lowest wages won the tender. So the company with good union agreements and with good, fair, and decent working conditions couldn’t win the tender, and that happened in Wellington. The company with those fair conditions and good wages had to crush the wages and conditions of the workers just to stay in business. They could not win the tender and they could not stay in business unless they crushed and participated in what is called the race to the bottom—and that is the race to the bottom.

So that is what fair pay agreements will do. They will stop this unfair competition on labour cost that will bring a line in the sand; an industry floor, like many other countries have—and we heard that from Minister Michael Wood in his opening speech. If you look at productive economies, successful economies, they actually have sector-wide agreements. It’s not a novel system; it’s nothing new. It happens in those countries.

For example, think about the Scandinavian countries but also Australia. Now, we know that the Opposition quite frequently would like to say that Australia’s wages continue to outstrip New Zealand’s and Kiwis’ wages. Well, they have sector-wide agreements. Fair-pay agreements have been in Australia for as long as I can remember. So now is the time to do something about it rather than spouting about other countries’ wages being higher than here. Let’s do something about it. It is very clear that any party that votes against these fair-pay agreements is essentially voting against our workers getting fair and good remuneration.

It was a privilege to chair the select committee. We had a huge number of submissions—1,796, to be precise—and they spanned across numerous sectors. The majority were individual employers, but also we had many employees. We heard evidence of almost 30 hours from 120 submitters, and we went all over the country to hear those. Three-quarters of all submitters were in support of the bill—this is very significant; 1,340 submitters were in support of the bill—and 20 percent of submitters did not support the bill, but many of those stated they did believe there needed to be some kind of concept of fair pay; they just didn’t like this system. Really important: only 5 percent—5 percent—said that they didn’t believe there needed to be a change, and they said there was no problem. That’s only 5 percent, so my argument is that the Opposition MPs are part of that 5 percent that don’t believe there needs to be a change.

I’d like to end my contribution now the way I started in the words of the Rt Hon Jim Bolger, chair of the Fair Pay Working Agreement Group, who said, “What we wanted to do in the report is in fact to stop us having some employers totally undercut others who are trying to be fair and decent.”

One quote from a submitter has stuck with me. They said, “Growth isn’t dependent on squeezing more and more out of the New Zealand worker.” It’s a privilege to commend this bill to the House.

It’s very much a pleasure to stand, and rise, on the bill referred to as the Fair Pay Agreements Bill on its second reading. As the member of Parliament for North Shore and a member of the National Party, we are obviously strongly opposed to this bill. It should really be called the “so-called fair pay agreement”, because in reality the only thing fair about this is the spelling of the word on the first part of this legislation.

I want to use my time this afternoon to provide a little bit of an overview in terms of why we think this is a piece of legislation that is absolutely ripping the heart out of the business community, a hard-working community across this country. I think sometimes some members of this House—particularly those opposite me—forget who pays the bills, those that are actually funding this Government’s addiction to spending, and that is our business community. Obviously, about 98 percent, if not higher, of our businesses are small businesses—those that are employing less than 20 individuals.

But this type of legislation—which is coming at a time where Kiwis across this country are suffering from not only a cost-of-living crisis, but, I think, as I refer to as a “social crisis” that’s developing—is going to only make it harder for businesses, workers, and employers to do what they should be doing and what they want to be doing, I’m sure, which is contributing to make this country better.

But, at the heart of this bill, this is a bill that is unfair for workers and employers. It is completely unfair, because it is going to increase the amount of bureaucracy and regulation on our business community in regards to imposition of what are these mandatory conditions on New Zealanders. That is actually going to reduce the flexibility of the workforce when, actually, we are at a time when we need significantly more flexibility and we need legislation by this Government which is completely out of touch with what our business communities across this country are faring at the moment—completely out of touch. We need legislation that doesn’t undermine what they’re doing but actually supports our businesses and employers in regards to the way in which they are supporting their workers.

So, at its heart, these so-called fair pay agreements (FPAs) is just another action by this Labour Government to pour more fuel on the fire of the challenges that we have in the midst of this cost of living crisis through adding additional regulation and compliance which is going to lead to an increase in costs.

We know from the feedback across the sector that this legislation has gone down like a cup of cold sick. The only ones that seem to be strongly supporting this are those on the other side of the House. But, in effect, this bill should be called “mandatory union deals”—or “MUD” is what it could be referred to in terms of the acronym, because this is a piece of legislation that is mud, and that is being probably a little bit generous in terms of that.

I want to just talk about some of the components of this bill, because we are at the second reading and it’s important to go through some of that element which, really, at its heart, is reducing the amount of choice that our businesses and our business communities and employers have as a result of this legislation being rammed down their throat, which is going to bring, in effect, agreements which are compulsory for workers and businesses regardless of whether they choose to join a union or not. That is, obviously, at its heart. You know, I don’t know—we are a party of limited Government. This legislation in its heart is going to mean that there is no choice involved in terms of opting in either for workers or for business operators. These mandatory employment conditions are just going to be passed on to those, and that’s why, at the heart, as I said, this legislation is actually unfair, that is because they’re going to be passed on to people without any choice. As we know, when you don’t have a choice, that’s generally not considered fair in life, and that is very much what is going to be the case here.

The other aspect here is that Kiwi workers are obviously going to be subject to these mandatory deals, which, in our view and other commentators in the market have said, will actually harm the employment and reduce productivity and I think, as a result of that reducing productivity, actually make it harder in order to actually increase and lift wages, which, as we know, the inflation numbers came out today at 7.2, wage inflation at 3.4, every single Kiwi is going backwards every single day, and this type of legislation is just going to add to that dynamo of Kiwis going backwards at the moment.

The other aspect I wanted to refer to was the officials’ comments in regards to this legislation. We’ve grown to become quite accustomed to this Government who seem to ram through legislation irrespective of all stakeholders saying it’s a bit of a dumb idea. Their ability to listen to hard-working Kiwis across this country is very much tokenistic. They undertake consultation which is not consultation, and I quote here, Ministry of Business, Innovation and Employment (MBIE) have said “There is a risk that the FPAs may weaken the wage-productivity link and/or lock in inefficient business models or increase barriers to entry into the market. This would ultimately lead to poorer dynamic efficiency of the economy and reduced ability to adapt, shift resources to more productive uses over time.”

Well, I tell you what, you would have thought that was quote from a member of the National Party. But, no, that is a quote from MBIE, the Government’s own Government department who is providing advice to these guys in terms of how to try and put in place legislation, and even they are saying in words that I have simply quoted. They’re saying that this is an absolutely ridiculous and dumb idea, but what would you expect a good Government to do around a bit of feedback like that? I’m looking at my colleague and you’d think, well, maybe they might take that on board and say that maybe we should listen to them because they might know a little bit more than what we do—but, “No, no. What we’ll do is we’ll ram it through and we won’t make any changes.” So another reinforcement of a Government who are not listening to Kiwis out there on the ground.

I’ll tell you what, I’ve got a few more quotes like that coming up so—geez, if only we had another 10 or 15 more minutes, but, anyway, we’ve got two minutes, so we’ll try and cut it to the chase.

But I wanted to get back, as well, before I cover off a few more of these quotes, around the impact of this legislation on the small-business community: 630,000 people is how many people small businesses employ in this country—630,000 people are employed by small businesses across this country. These are the people and the employers who are going to pay and feel the brunt of this legislation. It is getting harder and harder and harder for not only our business community but also those workers with all that cost-pressure that’s driven by this Government to try and navigate in all this thing, and these FPAs are going to come in and they’re going to introduce another layer of bureaucracy. I tell you what, have we heard that before? Have we heard that word before? I’ll tell you what, we seem to hear that word every single day, because these guys are absolutely pro! I’ll tell you want, I don’t often compliment them, but I’m going to compliment them today! If you want to find a Government who are absolutely A-class experts at implementing bureaucracy, there they are. They are the guns at that, but this legislation is going to cost Kiwis and cost Kiwi employers and that is because it is completely unnecessary.

The other aspect around this is that, actually, these FPAs are going to create a scenario where, in effect, New Zealanders will have these terms and conditions imposed on them which is actually going to suit someone else’s circumstances, needs, or preferences—i.e., this Government’s ideological position around what they believe is right and what they believe is fair.

So I come back to my point right at the start: this legislation is unfair for workers and employers. It is completely unfair, and it goes right to the heart of a Government that is not willing to listen to the real challenges that Kiwis across this country are facing right now, dealing with a cost of living crisis, dealing with a social crisis, and from that basis, we oppose this legislation.

Thank you, Mr Speaker. It’s a pleasure to take a call on this the second reading of the Fair Pay Agreements Bill. I said in the first reading debate on this bill that this is a significant change and that I considered it would bring in decent working conditions and fair pay for workers in industries throughout New Zealand. I still believe that this is the case. This is also the most significant change that we have seen in industrial relations since the repeal of the Employment Contracts Act, and it addresses some of the devastation that was brought in as a result of that Act. Even though I was a child, I remember living through that, and let me tell you it was very, very difficult for people who were affected by those significant changes, in terms of conditions.

But from listening to the other side, you would think that we were under some misapprehension and that we’re ushering in some kind of revolution. We hear statements that we’re “ripping out the heart” and “we’re taking away choice”. We are categorically not. All we are doing with fair pay agreements is implementing the ability for businesses and employers, workers and unions, in an occupation or industry to negotiate basic industry standards—basic industry or occupation standards. That’s all it is—that’s what this entire bill is about. It’s about minimum standards, the floor, conditions which no one would want to work under. Let’s say what they are. Hang on—let’s get the employers and the workers within that industry to tell us what they are and agree them. That sounds like a good idea to me. Let me tell you—it might even make it easier for people.

I’m a small-business owner and I have spoken to small-business owners. Specifically I’m thinking about the owner of a cleaning company in Auckland I spoke to. He told me, “I’m sick of being undercut by people who want to lower the wages of their employees and get contracts ahead of me.” He said, “I want to be a good employer. I want to have standards for my employees. I want them to want to come to work and want to do this work and be happy in their job, but I can’t do it at the moment because I’m constantly being undercut.” I said, “Well, we’re introducing fair pay agreements—good news for you. Hopefully, one day in the cleaning industry there will be an agreement that will set minimum standards that mean you don’t have to worry about losing your workforce.” That’s what this is about—basic dignity, security, and rights for New Zealand workers.

We hear from the other side that we don’t know who pays the bills. Well, I’ll tell you. In households across New Zealand it is working people who pay their bills, and they need security to know where that money is coming from, not just tomorrow, not just next week when they get their roster, but throughout their career when they choose to work in the industry, and this is how we get a productive economy—it’s through implementing changes that allow people to make these kinds of decisions that allow them to choose a career and have confidence that that career will provide for them and their families for the rest of their working life. That is what this Fair Pay Agreements Bill is about.

Now, we had a very interesting select committee process. It was very long. We did listen to a number of submitters for, I think, around about 30 hours. I think I was there for almost all of those. Three quarters of submitters supported this bill, so when we hear the other side say that we’re not listening and that we don’t know what New Zealanders want, I say that the evidence points to the opposite. We are listening to New Zealanders, we’ve heard what they’ve said, and they have said in the majority that they support the direction we’re going in with the Fair Pay Agreements Bill.

I also want to specifically thank the Ministry of Business, Innovation and Employment (MBIE) officials and Parliamentary Counsel Office (PCO) for their work on this bill. This is a very complex piece of legislation. It must be this way because of the nature of how it works and all the different scenarios it has to cover. It’s designed in a way that is user-friendly and it’s well-thought-out. It’s had a significant amount of work from those public servants, and we are really lucky to have the high calibre of public servants who work in MBIE and PCO and have worked on this bill, and I thank them for their work.

I don’t have much longer to go over this, but I could probably speak on this bill for an incredibly long time. I think the main thing I want to end on is just looking at the point that has been raised about competition. Competition in business, as we know, is important, but what are we competing on? Today I heard Richard Wagstaff, who is the president of the New Zealand Council of Trade Unions, speak about the Fair Pay Agreements Bill at a rally. He said that he thinks that competition in New Zealand should be on the basis of innovation and quality and not on the basis of low wages, and that if we bring in the Fair Pay Agreements Bill, we will be able to complete on this level. We will have the kind of country that allows competition that respects New Zealand workers and allows our businesses to thrive, and that is why I commend this bill to the House.

Thank you, Mr Speaker. It’s a real pleasure to rise and speak at the second reading of the Fair Pay Agreements Bill. I share the view of Labour colleagues around the significance of this for us as a country. It really is the most significant piece of legislation that I remember in my time in this place and before that goes towards undoing structural inequality in our country. We know that the level of inequality and struggle experienced by so many working people in this country is unjust and unfair and caused by the way we have set up our labour market to provide flexibility for the employer not the employee, and that values employers at the expense of employees.

I remember Helen Kelly talking about this, about the way that so much of the narrative that we hear from the right is that working people should be grateful to their employers for their job, as if their work is not and cannot speak for itself, as if their contribution is nothing. This bill is about changing that.

It’s not this Parliament deciding what should be done. There are other jurisdictions that do that—right?—where the Parliaments set those baseline conditions. But this approach is actually one that brings communities together. That is a result in its essence of a tripartite working group that involved business and unions and Government, who sat down together and looked at the degree of how our labour market was working and the inequality in it. And Jim Bolger recognised, and has clearly articulated, that the flexibility promoted by the National Party that he was part of introducing had gone too far, that our communities and our families have suffered and are still suffering because of those laws introduced at that time and that are being defended staunchly by that side of the House—I’m going to pretend that I’m not on that side of the House right at this moment.

I do just need to bring in, too, the recent report from the Human Rights Commission around the Pacific Pay Gap Inquiry that’s shown Pacific people are experiencing just appalling unconscionable levels of structural discrimination every single day, that Pacific men are being paid almost 20 percent less than Pākehā men in their workplaces and Pacific women are being paid about 25 percent less. And when the analysis is done about why—is it because they’re less educated, that actually their age distribution is different; any of those factors that might be explainable—the majority of the reason is not that. It is discrimination and unconscious bias in the way our labour market is set up.

So fair pay agreements weren’t one of the recommendations of that report. They were more specific, but it is, in my view, part of the solution, because we know that the numbers of Pacific people on minimum wage is the majority. And what we hear again and again from particularly marginalised communities is that they’re spending their life on the minimum wage despite years of experience in the job. We’ve heard these submissions to the committee. It was a really compelling submission I think from E tū members talking about working for, like, 20-plus years for one employer. The loyalty: turning up to work every day, back-breaking physical work, and to still be on the minimum wage. That’s just disrespectful. But it is a result of the existing current system that we need to change. That’s why this legislation is part of that change, because—I will speak for myself—I am not willing to accept that status quo anymore. I believe everybody in this House should be angry about what that status quo is doing to our people and our families and our communities, and should be looking for solutions to that. This is a solution. I am yet to hear one from the National Party at all. I’ve heard from them that this bill had no one support it; yet, the analysis of the submissions on the bill showed that almost 80 percent—75 percent—of people supported this bill. It came out of that tripartite working group that had the support of business, unions, and Government. There is a small group—and, so often, we see this with inequality, right? That it’s upheld by that small group who benefits from it. That’s who we’re hearing represented in this House from the National Party this afternoon. I am pleased not to be sharing that role. I am pleased to be in the Green Party, supporting a commitment to eliminating inequality.

I also do just want to bring up that point made by the previous speaker, Camilla Belich, around the benefit to employers who are wanting to do the right thing, or are doing the right thing at the moment—that this evens up the playing field and prevents them from being undercut by dodgy employers. I would also say that it’s quite well researched and evidenced that we have a management crisis in this country, in many of our businesses, and that is a key part of the productivity challenge we’ve got. A dynamic of that management deficit is an undervaluing of people—an under-investment in people and their ability to grow and help develop a business. So this is a solution to help those businesses change their culture. It’s to provide some leadership for those businesses to get up to speed. The evidence that we see in other countries—where this is the norm, can I just say. This is not some radical initiative. It just embarrasses me to hear it suggested, as if it is, when it really is just us catching up with most other countries that we like to compare ourselves to. It helps business as well as helping workers and communities and families. You know, it is possible to have win, win, win, but possibly not if you’re the 1 percent that we’re hearing represented by the National Party yet again.

In the time I’ve got left, I did just want to touch on a couple of changes in the bill and a couple of things that we might like to see progress further in the committee stage. I was really pleased to see that the “mandatory to decide” aspects of the bill have been extended from wages and hours, to include training and development and leave. If I think of the Kristine Bartlett settlement as our first exemplar of a fair pay agreement, the training was absolutely essential to achieving equity for those workers. I’m not sure we’ve fully implemented it as intended on the ground, and that will require, I think, a strengthening of our industrial relations system beyond this, to ensure that these are enforced as well as agreed on. The Greens would like to see default union membership as well as more labour inspectors to help us realise the potential of these agreements. We know; we heard examples from submitters around the struggle in terms of hours of work and leave, particularly in non-unionised workplaces, where more and more was expected for just the same amount. So that was really good to see that extended. We would also love to see the right to strike—I keep on saying that. The Greens would like to see that back in there, but we are happy to support this bill today.

Thank you, Mr Speaker. I rise on behalf of ACT for the second reading of the Fair Pay Agreements Bill. ACT opposed this bill at the first reading, and after listening to the many submitters, we oppose it stronger now than we did before.

I must congratulate or say thank you to the great work done by the Parliamentary Counsel Office and officials to put together a really complicated—but unnecessary—piece of legislation. Ministry of Business, Innovation and Employment officials even said at the Education and Workforce Committee that it was “difficult trying to make this very complex system understandable”.

I spent quite a bit of time studying the Crimes Act 1961 in a past life and I’m really in awe of the way it was written, so it showed that we have some really talented people working in this place. But be assured—for the sake of employers and especially employees—this will gone after the next election.

The naming of this bill is an extremely cynical use of words, because like other Labour Party phrases—misnomers like “money tree” and “gravy train”—it doesn’t mean what it says. “Fair”: it’s not fair, especially in this case it’s subjective and quite meaningless. “Pay”: it’s not only about pay; it covers all aspects of an industry’s employment. And “Agreement”: it’s certainly not an agreement; if there’s no agreement they will be set by the Employment Relations Authority, but they are industrial awards.

To oppose this bill doesn’t mean opposing fair pay—quite the opposite. Thankfully, most people aren’t fooled by this wording. The bill seeks to take New Zealand back to the national awards systems of the 1970s and 1980s, risks a return to the industrial chaos of that era, as individual businesses find themselves dragged into disputes that they have nothing to do with. The current employment agreement contracts legislation has provided the necessary safeguards and flexibility for employees that have proven to be successful over the last 30 years.

The fact is that after declining through the 1980s, employees’ pay and conditions have improved substantially since the introduction of the Employment Contract Act in 1991. There are issues in some industries that obviously needed addressing, and they came out quite obviously during the select committee process. Drivers have an issue; cleaners, and a number of other professions obviously have inherent issues that need to be sorted. But most workplaces are going well—even Minister Wood acknowledged this—and this silly piece of legislation is quite unnecessary.

Once again, the most divisive Government in New Zealand’s history—proud history—has excelled in pitting one section of society against another: employers against employees. Labour fails to understand that all business owners—those New Zealanders who strive to get ahead through their own effort, and who are prepared to take risks to provide work for those who want it—those employers were once hard-working employees who had a great work ethic and a vision.

I realised how out of touch Labour were a couple of weeks ago when, during question time, Minister Sepuloni proudly quoted Costco’s managing director, who said, “We pay over the award rate and the living wage. We want to give people really, really good jobs; good training.” In response to the notion that other businesses were struggling with a national skills shortage, he said, “If you pay the right wages and have the right working conditions, you [can] get the right people.” He also added that he had little problem “finding staff himself”.

💬 Costco: a multinational corporation, third largest retailer in the world, making billions of dollars in net profit each year, being compared with struggling New Zealand businesses that are fighting for survival because of this Government’s policies. Insinuating that there wouldn’t be a worker shortage if New Zealand businesses just paid their employees more is just so offensive.

I’d like to thank many of the submitters as well for contributing to this really important debate. They were divided into two camps: not just for and against the bill, but emotive and factual. Some employees are doing it tough, and their stories were often heartbreaking to hear and I thank them for sharing them. But fair pay agreements are not going to help; they will make it worse. A number of submitters stated that they would like to have more say in the running of their business to feel like they belong more, and I’m sure a lot of businesses would actually like that, if the employee was also prepared to mortgage their house or get a loan to pay, just in case the business got stuck—like the business owner has to. One submitter represented the hospitality industry, a union with a membership of 3 percent of the 100,000 workers in the industry, quite adamant that if extra conditions placed by a fair pay agreement (FPA) caused a business to go bankrupt or fail, well, that’s just tough luck. Totally out of touch with their own workforce. The popular Labour rhetoric that if you can’t pay their bills, they shouldn’t own a business is straight out of the trade union manual.

The other group of submitters were against the bill proceeding: business owners who are experiencing the current Government policies and some highly experienced and qualified people who came to the committee with the facts. The fact that FPAs will affect employment relations negatively. The fact that most employees were happy with their current pay and conditions. The fact that most businesses are already providing training and pathways for employees to get ahead. The fact that health and safety and welfare of employees was hugely important to business owners. They haven’t needed a Big Brother Government to tell them. The development of workplace relations has improved hugely since the introduction of the employment contracts in 1991.

Retail New Zealand did the survey that you heard about before: 71 percent of New Zealanders didn’t want FPAs. They also said that 0.5 percent—half a percent—of their workforce could initiate an FPA. That’s just not fair.

This bill does amount to unionism by stealth and will simply make it tougher for businesses who have struggled to keep trading during the last two years and who continue to struggle with the never-ending costs imposed on them by this Government.

I had my first experience with unions when I was 17. I left school to work as a cleaner in a psychopaedic hospital in Nelson. I met the union rep on my second day there when she pulled me aside, told me it was an expectation to join the union if I wanted that morning tea with everyone else and if I wanted to get free cheese on toast. So I did join. I met her again about two weeks later, when she again pulled me aside and told me I had to slow down. They had a way of doing things and I had to follow it. She was telling me not to work too hard, and there is little evidence to show that that attitude has changed within the union movement.

New Zealanders are free to join a union if they want to. They shouldn’t be forced upon them because of Labour’s ideology. The constant comparison with Australia by Minister Wood and these guys sitting here now about how fantastic these agreements are has become tiresome. It’s just not factually correct. Their agreements are very different. Union membership in Australia—and throughout the world—is declining as workers prefer to be treated like adults more than capable of working out their own conditions for employment. Maybe if we started mining like they do in Australia, we could reach some of their rewards.

Timing of this bill is another kick in the teeth for business owners, and the Government knows FPAs won’t help. Over the last two-and-a-half years, we’ve had an environment where employers and employees worked things out for themselves to cater for the current unprecedented situation. Businesses help workers, workers help businesses—struggling employers. It has worked and COVID showed us—and continues to show us—that we need a flexible workforce.

But from the start of this pandemic, we’ve been kept on having a tax on businesses. Two weeks into it, the minimum wage went up and I won’t bother with listing all the rest.

The Government must realise that businesses have survived in spite of them, not because of them. And when Business New Zealand refuses any part in this bill, you’d think there was cause for some concern. The Ministry of Business, Innovation and Employment has warned against FPAs, saying they will reduce productivity and make it harder for employers to grow. This is a solution looking for a problem; it’s not good governance.

New Zealand’s workforce has improved from the 1991 introduction of the employment contracts agreement. FPAs are a backwards step and they will affect good, hard-working employees. ACT believes that New Zealanders are more than capable of talking to employers and working out pay and conditions that suit both parties and, most importantly, are affordable—something that’s lacking in everything Labour says. It’s called an employment contract, and they work great.

Unions can play a part if the employee wants them to. But this bill overrides basic freedom of association by allowing the union to represent a worker, even when the worker does not want that to happen, and to set conditions that may be against the wishes of the employee. That’s not democratic, and we oppose this bill. Thank you.

Thank you, Madam Speaker. It’s a pleasure to take a call on the Fair Pay Agreements Bill. Before I begin, I wish to acknowledge the passing of Gloria Ruru, wife of my friend, and Nelson Whakatū Archdeacon Emeritus Harvey Ruru, who passed away last week after a long health battle. My love and thoughts are with you, Harvey and whānau. Moe mai rā, Gloria.

Today, we take another step forward in ensuring we have decent employment law that will lift the wages of the lowest-paid workers in New Zealand. Fair pay agreements will improve wages and conditions for employees, as well as level the playing field so that good employers don’t get undercut and disadvantaged.

In my maiden speech to this House, I said that during my time in Parliament I wish to see a fair pay agreement for all retailer workers in New Zealand. It is 10 years since I began working for New Zealand’s retail union, FIRST Union, that oversees bargaining for retail workers. FIRST Union has collective employment agreements in place with most of New Zealand’s large retailers, including Countdown supermarkets, The Warehouse, Bunnings, Farmers, and Kmart. These are large, profitable companies that can afford to pay their workers fairly. The collective agreements in place at these retailers have led to higher wages and better conditions for workers, like extra annual leave and sick leave, and the transferring of public holidays so that workers who work a Tuesday to Saturday roster don’t miss out on precious public holidays. These are the kinds of terms and conditions that would make sense to be part of a retail fair pay agreement.

Over the past 10 years, I’ve worked alongside my friend, Pak’nSave Richmond delegate, Jenny Wells, and other workers at Pak’nSave, to bargain for a collective agreement for the workers at the supermarket, which is the largest supermarket in my electorate of Nelson. That fight has not been successful because our employment law is not designed to support sector-wide bargaining.

In New Zealand, we have a supermarket duopoly. Countdown supermarkets have a nationwide collective agreement that provides decent wages and conditions to thousands of workers. Pak’nSave and New World supermarkets, who are part of the Foodstuffs chain, do not have a nationwide collective agreement. Their checkout operators, night-fill workers, and deli and bakery workers are generally paid around $2 per hour less than Countdown workers. It’s not fair and it needs to change.

The Commerce Commission’s inquiry into supermarkets found that supermarkets make $430 million a year in excess profits. As well as having fairer prices at the checkout for consumers, that profit needs to go to the workers who do the hard work every day, making profit for the owners of the supermarkets.

During the COVID lockdowns, New Zealand retail workers, especially our supermarket workers, were finally recognised for the skilled and essential workers that they are. They showed incredible tenacity during one of the most difficult times in our nation’s history. They turned up every day, risking their health and wellbeing to deliver essential services to our community. They deserve fair wages and conditions at work, and fair pay agreements will help deliver that.

My thanks to the Education and Workforce committee officials, submitters, and the Minister for their work in bringing together this significant piece of legislation that will change the working lives of many of New Zealand’s lowest-paid workers.

Today, our Parliament, under the leadership of the Labour Government, takes another step forward in putting in place the most progressive and fair piece of employment law that New Zealand has seen since the early 1990s. My generation—a generation that grew up under the Employment Contracts Act, a devastating piece of employment law that led to reductions in real wages—and the generations to come will finally have a sector-based bargaining framework that is modern, fair, and ensures that a fair day’s work does equal a fair day’s pay.

The introduction of the Employment Contracts Act in 1991 has been one of the key drivers behind inequality in Aotearoa. This legislation helps to correct that wrong from over 30 years ago. As we face the cost of living and inflation pressures that we see in New Zealand and globally, this Labour Government is making a transformational change to our employment law so that our lowest-paid workers can be paid the income they deserve. Every day, I’m proud to be part of a Labour Government that is making a difference in the lives of working people. Today, on this side of the House, we’re standing up for hard working people who deserve the dignity that fair pay agreements will bring to their working lives. I commend this bill to the House.

The next call is a split call. I call on Erica Stanford—five minutes.

Thank you, Madam Speaker. I rise to speak on the Fair Pay Agreements Bill, a bill that National opposes and, eventually, an Act that we will repeal.

Can I start by also giving my thanks to the submitters, and also the officials, on this bill. It was a long and complex and difficult bill, with many changes because of all of the different scenarios and the unexpected and unintended problems with the bill. As my colleague across the way, Chris Baillie, pointed out, there were many changes because of these unexpected problems.

At a time of skyrocketing and stubbornly high inflation—and I don’t think anyone expected today the number 7.2 to come out—despite the predictions that this would drop, we still see it stubbornly high, and yet we get this bill. At a time when we should be focused on driving down inflation, on making our workforce more flexible, on making our employers have more agility, and on improving compliance, all that this bill does is the opposite of all of this. The bill allows a very small minority of workers to force a whole sector into negotiations.

Now, I think it’s worth pointing out, at this stage, the numbers that will force negotiations—and eventually a fair pay agreement, because there is no turning back: 10 percent of the workforce, 1,000 employees, or a public interest test, which, technically, would require no employees. Now, I want to put this to the other side of the House, because all we’ve heard today is how much people want this, how important it is for workers, how desperately they need this, and how it’s going to be so important for them and they were overwhelmingly supportive of it: if that was the case, what is wrong with making it 50 percent of the workforce—if they so desperately want it and they’re so desperately supporting this? Why make it 10 percent or only 1,000 workers or even have a public interest test? Why do we have a need for a public interest test if the workers are so desperately calling for this? Well, they can’t answer that, and they won’t, and they haven’t.

💬 Helen White: I just did.

Well, get up and take a call.

💬 Helen White: I will.

Excellent. Can’t wait for it. The member for Auckland Central, Helen White, is going to get up and take a call. We can’t wait for those bits of information.

As I mentioned, this will force the sector into bargaining, and there is no coming back from it—10 percent of the workforce or, in fact, none of the workforce if indeed it meets the public interest test. So this will set a base pay rate for a company in Auckland, a company in Gore, and a company in Invercargill regardless of the costs that that business faces in that particular town.

As always, in this bill, the Government confuses wage rates and increasing wage rates with an increase in productivity. They’ve done exactly the same with immigration settings, pushing up wages, believing that it will push up productivity, and yet how has that worked out so far for immigration? All we’ve seen is businesses closing their doors because they don’t have workers. Interestingly, despite their constant claims of productivity improvement, nowhere, as my colleague Paul Goldsmith pointed out, is productivity mentioned as something that must be discussed when putting together an agreement—and yet we have this productivity disease. Nowhere is it mentioned. And, as my colleague Paul Goldsmith mentioned, this favours those large employers. It was interesting with Rachel Boyack before making those claims about the supermarkets and how this was going to make it fair for everyone, but as we’ve already pointed out, in this bill this will favour large employers, who can set wages and conditions to suit them, and not their smaller competitors. We made that point at the Education and Workforce Committee, and we’ve made it again today.

One of the problems that have not been ironed out that I mentioned at the select committee—and the Minister couldn’t answer—is how will the wage floor for migrant workers affect this bargaining? Because, effectively, the floor for a migrant is the median wage, which, next year, in February, will be almost $30 an hour. Now, no one at the select committee—not the Minister or the officials or anyone—was able to say, well, how will that affect the bargaining when setting a price floor, because, effectively, you’ve got two price floors and surely that will raise the floor to whatever the floor is for the migrant worker. No one in the select committee was able to explain how that potentially would work.

As I’ve mentioned, when we need flexibility, we’re getting the opposite. We will repeal the bill as soon as we have the opportunity to do so.

If there’s one reason for workers in New Zealand not to vote for the National Party or ACT next year, it is around this bill. They don’t like workers and they have said they will scrap the bill. Not only will they scrap this bill, they will give tax breaks to the richest people in New Zealand, which will involve an $18,000 rebate to their leader should he become the Prime Minister. Workers need to remember that, and the Opposition needs to remember that workers are not widgets.

Employers have nothing to fear from this bill if they are doing business well; if they are looking after their workers. Workers are not widgets. I went to a memorial earlier this year—workers’ memorial—that commemorated the lives of 63 workers in New Zealand who died in 2022. Up to 900 died from work-related illness.

Now, what these agreements will do is enable workers more input into the safety at their workplace. That is a conversation that needs to happen, because, quite frankly, what happens in workplaces currently is not acceptable. Employers and workers need to work together to understand what works best, and that is workplace safety, it is dignity, and it is also productivity.

Not only is tomorrow the cleaners day, but this Thursday is actually 50 years since the Equal Pay Act 1972. The reason I raise this is because, at the time, it was considered outrageous. That piece of legislation came through largely thanks to the actions of a Dunedin woman and the Public Service Association, who took union action against Inland Revenue in 1956. That woman, Jean Parker, dared to question why a male worker was being paid more than her. Not only did she not receive that amount of pay, her pay went down as a result. She challenged that in a court. Go forward 12 years, the Equal Pay Act was put through, and in 2017 the Service and Food Workers Union took a court case to balance a pay gap for workers in sectors predominately known as “women’s work”. All of those cases and all of those scenarios involved outrage and controversy at the time. How dare people suggest that women get equal pay!

Well, it’s the same thing that’s happening now. We have a small minority of people on the opposite benches. About 5 percent of submitters are saying that, in the name of flexibility, they don’t want to see fair pay happening. It is the usual suspects: it is women, it is Māori, it is Pasifika, and it is ethnic people who stand to gain the most from this change in the law. They are the ones who experience the most inequality in this country, and the yawning inequality gap that has got bigger and bigger over the last 30 years is a direct result of what the Opposition did to bring in the employment relations work.

Let’s avoid the race to the bottom. That is exactly what is going on. We need to change things up. We need to reward those employers who are treating those workers well, they are already getting the benefit of productivity, but they cannot compete where there is a race to the bottom.

It is best practice; it is international best practice. It’s been mentioned by Jan Logie—Germany, France, Italy, Australia are all doing this; we know that it makes workers more productive. It is not something that can be transacted, as mentioned by the previous speaker, which against goes to the attitude of the Opposition about people in supply chain as widgets, just like every other thing, like material and so on. People are not inside the supply chain as widgets. They need to have minimum standards.

It’s not just about productivity. The overriding reason to do this is because it is the right thing to do. Workers need to remember that. Workers need to remember that this will be the biggest change in 30 years, and if they vote the other lot back in, not only will those tax cuts go to the rich but they will scrap this legislation and we will be back to square one. We cannot afford to let that happen. I am so proud of this bill. I am so proud that our Minister has got this piece of legislation to where it is. I am very proud to recommend it to the House.

For too long, cleaners, bus drivers, supermarket workers, and other people who are on the front line working day to day have lacked that bargaining power to seek better wages and better working conditions. We want to turn that around with this bill. We want to undo the damage that was done by the Employment Contracts Act 31 years ago.

I sit here with sadness, listening to the National Party scrounge around for ideas and reasons to pay Kiwis less. It makes me sad to think that you run lines and try and convince us that you mean it when you talk about concern for the cost of living when you can’t even pay people a decent living wage. I have struggled to listen to the arguments of why New Zealand’s wages struggle to keep with those in Australia when you can’t agree to the same fair pay agreements that our brothers and sisters in Australia have implemented for years and years. So those cries I find are hollow cries. The cost of living as well as those, to pay all they want to do, in that sense, is what I see is to pay working Kiwis less to fund tax cuts to the wealthy. I find that disgusting.

Thirty-one years since the Employment Contracts Act was passed and I was one of those supermarket workers who sat with the 37 percent of part-time workers who took a pay cut in the first three years of that employment legislation coming into action. It removed sector-wide bargaining, it drove down wages, and it paved the way for a race to the bottom to who could pay workers the least and be more competitive with people’s livelihoods and wages.

I would like to say that I look forward to this legislation coming into force. I look forward to it improving the conditions for bus drivers in the Wellington region so that we can pay people a fair wage, and we have a floor, a bottom standard, for conditions alongside wages that give good, hard-working Kiwis enough money in their pockets each day that they can go home and feed their families.

This is a critical piece of work that I know has had huge organisation from all of those that submitted, from unions, to organisations, to workers. The large amount of submissions that came forward and said that New Zealand needs to move forward and be part of the future and pay people a fair wage is only the right thing to do for New Zealand.

I look forward, also, for us having a good working relationship between workers and employers. It is only when we have that good working relationship that it works both ways and people want to stick around and do the extra work because it’s fair and they want to do that. I’m proud of Michael Wood to be bringing forward such a great piece of legislation that I know will make a real difference in the lives of working families, and I commend it to the House.

The time has come for me to leave the Chair for the dinner break. The sitting will resume at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.

Fakaalofa lahi atu, members of Parliament. When we broke for the dinner break, we were debating the second reading of the Fair Pay Agreements Bill. The next call is a National Party call.

Madam Speaker, thank you. It’s great to be able to rise and speak on this bill. We’ve heard quite a lot of passion, I think, from both sides on this. I mean, it’s something that the Labour Party is very keen to put through, and it’s something that on this side of the House, National and ACT are a lot less keen to put through, and something we have already noted that we will get rid of when we come into Government.

💬 Hon Kieran McAnulty: Got it in one.

Very good. Now, the attempt here is to impose industry- or occupation-wide collective bargaining agreements. What we believe this will do is reduce flexibility in the workplace.

💬 Angela Roberts: What’s the next line?

OK, the next line on this is that we think this will make it a lot less competitive for people. This is a bit of a throwback to the days of the 1970s when you had these big industries and the way they liked to do it was roll out industry agreements across the way, but we’ve moved on a fair bit from that now. You know, we’re 50 years down the track, and we’re in quite a dynamic, nimble economy, and people now like to be able to make their own decisions about how they’re going to engage in employment agreements.

We’ve noticed that it doesn’t take a lot for people to be forced into this, and it does make it mandatory across workplaces where there are a huge number of workers. You don’t need a big test to pass—1,000 employees or 10 percent of the workforce. If you’ve got a significant workforce, like you do in some—you know, take hospo or retail, for instance; 1,000 workers isn’t actually that much. You’re, effectively, then forcing everyone else, whether they like it or not, to come into this arrangement.

This isn’t about fair pay; this is about the imposition of mandatory conditions on New Zealanders that reduce work flexibility. Flexible labour markets are the foundation of what we want to see here in the 21st century. This undermines that flexibility. Small businesses in New Zealand and in other—I would like to say advanced, but I’m not sure we are meeting that test under this current Government—economies around the world, they thrive because they can be agile. We live in an agile workplace. We live in a place where people can move between businesses and across borders. Now, we know these fair pay agreements (FPAs) are going to be particularly costly and complex for small businesses. Here in New Zealand, small businesses are the lifeblood of our economy—they really are. They employ over 600,000 people. I can see how in a big, big company, it might make a bit more sense to have everyone on the same level, but to apply it across the board is a massive overreach, especially when you bring small businesses into it.

My colleague the Hon Paul Goldsmith gave the example of supermarkets earlier. You’ve got your big ones there: you’ve got Countdown; you’ve got New World. If they’re made to come into these negotiations and you’ve got someone else, you’re just a small company in rural New Zealand that employs a couple of people, how are those negotiations going to run? Do you think your small business owner is really going to get a say at that table? Because they won’t. They won’t get it. Small businesses will be left behind, and small businesses can’t always absorb those additional costs that are going to be placed on them. We know it is going to place additional costs on them. Treasury’s own advice to the Government was that there has been minimal identification of empirical evidence for the problem or policy response, and from our perspective, they are an ideological overreach by Labour.

I’ve got some other good quotes here, so I’d like to move on to those too. Some can get angry; others can grin. You take it either way. The Ministry of Business, Innovation and Employment (MBIE) has warned there may be some cost to some employees if employers reduce hours of work, reduce the size of the workforce, or do not hire as many workers in order to remain competitive. Treasury has also warned the proposed system could make structural changes to the labour market and have negative effects on worker conditions, employment, and productivity. It’s very important that when you get given advice that you listen to it. I know that that side of the House, and, in particular, that Minister, Michael Wood, really wants to drive in an ideological agenda about taking New Zealand back to compulsory workplace unionism, but when you’ve got Treasury and you’ve got MBIE—and I’ve got some other good quotes here from Business New Zealand that I’ll move on to shortly—you need to listen to them. This rigidity to put a one-size-fits-all approach on our workplaces will reduce our ability to adapt and to innovate. It will weaken our economy at a time it’s already incredibly vulnerable.

💬 Maureen Pugh: It’s going backwards.

It is going backwards; you’re right. Thank you. It’s not acceptable that you can keep heaping costs on to businesses. We’ve already seen we’ve got inflation running at 7.2 percent—that is six quarters in a row. We’ve had consistent minimum wage increases. We’ve had a big bunch of sick days put on. We’ve got the job tax around the corner. We’ve now got fair pay agreements around the corner as well, and to think that businesses are just these incredibly profitable beasts, especially small businesses, and it’s the small businesses that hire over 600,000 workers in New Zealand. You think they can keep absorbing all of these costs? It is a total misconception. We need to understand—and Treasury and MBIE have already identified this—that if we keep pushing along these costs, they will get passed on to the customer, or the business, in order to remain competitive, will have to lose staff. That’s a dreadful situation to be in. It’s not this idyllic utopia you all think it is, where businesses are big fat cats and can just keep paying and meeting conditions.

We’ve got some other good pieces here, and I’d like to refer to what Business New Zealand has said. They quote that “The Government has failed to listen to business concerns and has doubled down on the worst aspects of the Fair Pay Agreements Bill, and while under select committee consideration, the bill has been made even worse.” That’s coming from the Business New Zealand chief executive. When you read comments like that and you see the Mood of the Boardroom that came out a couple of weeks ago, one can hardly be surprised that this Government is no longer considered competent by the boardroom. Your time is coming, because you’re not talking to people, and when you are, it is just a box-ticking exercise. You need to listen when people give you feedback like this.

Let me go on. Let’s look at what the Employers and Manufacturers Association (EMA) had to say about it: “The Government’s report back on the misnamed Fair Pay Agreements”—we particularly like that comment—“demonstrates a failure to listen”—as I’ve already commented on—“that was also highlighted in the recent Mood of the Boardroom survey, says the EMA.” This is a direct quote: “What has come back from the select committee process makes things even worse for employers and employees, the vast majority of whom will have no say in FPAs if they are introduced”. It’s more bad news, more bad quotes. Here’s another one: “Employers must hand over employee details to the negotiating union, a potential breach of privacy.”, so they can collect their info, collect their fees. Here’s another quote: “Coincidentally those are all examples of collective agreements locking in lowest common denominator pay increases over longer fixed terms and failing to respond to the market and demand. That’s what FPAs do for three years.” Meanwhile, we’ve seen in the current environment, the private sector has been able to respond, because they are agile, and they are offering increased wage increases.

FPAs are a return to a failed collective, centralised thinking, at a time when we as a small, agile New Zealand economy need to be able to be agile and respond to ever-changing, ever-demanding global economic instability. This doesn’t do that. This is not good for workers. This is not good for businesses. When we come into Government, we will get rid of this bill. Therefore, as I have stated before, the National Party opposes this bill. Thank you.

I worked as an employment lawyer for about 25 years and I watched the deterioration of people’s wages over that time. If you want to google, for those at home, please google the wage that most people in New Zealand get. You’ll find it’s actually incredibly low, and you’ll see a chart that goes from low to an incredibly small group of people at the top. They’re such a small group. Most people are earning under $70,000. Most people—and by far the majority—are earning those lower amounts of money.

When I was working as a lawyer, there were some cases that haunted me. I remember one woman who was a caregiver. She was in her 60s. She was still on just over the minimum wage. She had been working where she had to lift patients, and as a consequence, she’d actually worn herself out. So the response to that was to frustrate her employment, which meant that she lost her job without compensation. That woman fits a group of people who are incredibly vulnerable. They are often not in a union, they have got no protections around them, and they have all the hallmarks that are in this legislation of a group that would be covered by one of these minimum standards. So, for example, they are on low pay, they have little bargaining power, and they lack any kind of pay progression. They have inadequate pay; they are not able to move; and they have very, very flexible work hours. They used to be on zero contracts; they used to be on flexible contracts. They had very little security.

Those people we cannot afford to keep like that in this society. It’s an international phenomenon. People like Joseph Stiglitz have talked about the damage it has done. And do you know what actually happens? Actually what happens is the taxpayer ends up forking out because those people cannot make ends meet. The taxpayer ends up paying out in some other form instead of us building a society that’s based on an affordable, good economy—an economy where people get enough to eat, enough to pay the rent. That’s what we have to build. So it is incredibly important that we have a floor. In an industry, they’re all different, so this will provide a floor. It will say, “OK, so you’re a seamstress. OK, so you’re a bus driver. Well, you have to be able to work as a bus driver, and you’re living in Auckland, and it’s actually a really expensive place to live.” Actually, what we’ve done to those people is absolutely appalling.

I can tell you another case that haunts me. It was the bus drivers in Auckland. I wrote the strike notice for the bus drivers. Do you know what it said? It said, “They would go and take their toilet breaks.” That’s what the strike notice said. They were locked out. They didn’t even object to the split shifts that they were working where they sit in the middle of the day for hours without pay. That’s how downtrodden that system was. As a consequence of it being that downtrodden, we end up with a system where—even when things are improving a bit—we cannot get enough bus drivers in Auckland, and we have had major issues this year with bus drivers and ferry drivers et cetera because those are low-paid industries. It is causing us real grief as a country that we have not built into our system the maintenance of the workers that we have who are on those lower incomes. I’m not just talking low; I’m talking lower-middle.

When I hear people talk about the cost of living and say this will rise because consumers will pay the price, I’d ask the Opposition to consider who those consumers are. Who are the consumers who are having the hardest time actually buying fresh fruit and vegetables at the moment? Because it’s these workers that this will protect. We have to get the wages of people in this country up. It’s why I came here. It’s what I want to focus on. I don’t want it all to be about benefits and handouts and bits and pieces and grace and favour; I want it to be about people earning a decent living in this country, and this legislation will do it.

The question is, That the amendments recommended by the Education and Workforce Committee by majority be agreed to.