Fair Pay Agreements Act Repeal Bill

Point of order, Mr Speaker. There’s no question before the House. My suggestion to you is that you refer this bill back to the beginning of the Order Paper and that we move to the next bill forthwith.

The Hon Brooke van Velden.

Mr Speaker, thank you—

💬 Tangi Utikere: Sorry, point of order. My colleague Ms Williams has raised a point of order, but there was no response to that.

ASSISTANT SPEAKER (Greg O’Connor): Well, the response, I would have thought, spoke for itself, since the member was here on her feet and has remained on her feet and is now in a position to actually begin. Had she done anything other than be on her feet and been sitting down, it may have been a different story.

💬 Tangi Utikere: Point of order. Seeking your clarification, Mr Speaker, is it that a member can be on their feet but making their way to a Chamber desk which is in order, or is there a strict requirement that a member has to be on their feet but in place in order—[Interruption]

ASSISTANT SPEAKER (Greg O’Connor): You should finish; go ahead.

💬 Tangi Utikere: Yes, I just thought there were some comments from other members of the House, and last time I checked, points of order were heard in silence.

ASSISTANT SPEAKER (Greg O’Connor): That’s all right. I’ll just take some advice on that, and, yes, you are right about having it heard in silence. As I have said, the Minister was making her way to her seat. I was watching her, and the mere fact that she could actually have turned around where she was and actually answered or begun her speech and continued on the way to the seat—so, Brooke van Velden.

Thank you, Mr Speaker. I move, That the Fair Pay Agreements Act Repeal Bill be now read a third time.

This bill repeals the Fair Pay Agreements Act and the associated amendments to other Acts and revokes associated regulations. Once the Fair Pay Agreements Act is repealed, bargaining for initiated fair pay agreements will cease as there will be no legislative mechanism to bring any agreements into force. My clear intention with this repeal bill is for the fair pay agreement system to stop and that the bargaining stops as the law ceases.

Fair pay agreements were never about fairness. They forced a minority of union workers’ views on all affected workers and businesses, and this Government opposes the views that were put forward by the previous Government and that law. The previous Government introduced legislation in 2022 for the fair pay agreement system. Under that system, unions and employer associations could bargain for employment terms and conditions that covered all employees in an industry or occupation. The Fair Pay Agreements Act and associated regulations came into force on 1 December 2022.

Both the National Party and the ACT Party opposed the development and introduction of the fair pay agreements legislation at that time. This repeal has been well signalled for a very, very long time. We have a clear mandate from the voters from the 2023 general election and this Government is delivering on that promise. This Government has committed to repealing the fair pay agreement legislation by Christmas 2023 as part of our coalition agreement between the National Party and the ACT Party, and I am committed to acting as quickly as possible to remove this legislation before any fair pay agreements are finalised and the transition arrangements become more expensive and complex. To reiterate, my clear intention with this bill is that the fair pay agreement system stops and for all bargaining processes to cease. We are doing this to send a clear signal to businesses that this Government understands the pressures that businesses have faced in an environment of increasing inflation and a Labour-led Government that has piled on regulations. Today, this Government is providing certainty to businesses so they can get back to focusing on what they do.

The fair pay agreements diminished the fundamental right to freedom of association, which includes the freedom to not associate. The fair pay agreements risk harming New Zealand’s already dismal productivity growth. The best and most sustainable way to increase the wages of workers and to lower prices for consumers is to improve productivity and reduce the regulations holding businesses back.

We are a Government that wants to see higher wages for workers and a thriving economy, a thriving, competitive business sector. We want more and better jobs here in New Zealand, and we want to ease the pain of the cost of living crisis. But the fair pay agreement system would not have helped. It would have done so much damage to our economy and to our labour market. Far from being fair, the fair pay agreements risked harming the very workers it was aiming to help. I commend this bill to the House.

Thank you, Madam Speaker. I don’t think I’ve ever been more disappointed in this House than I am right at this moment. It’s almost Christmas, and the one Act that would transform our industrial relations system in New Zealand to allow workers to have good pay and conditions, fair pay and conditions, fair health and safety conditions at work; to allow us to have a competitive economy but not based on people’s terms and conditions—

💬 Hon Scott Simpson: There weren’t any—not a single one.

Well, I think it’s a good point that there isn’t a single one, and wouldn’t it have been better to accept some of the amendments that we had put forward on maintaining some of these fair pay agreements?

As we’ve said a number of times, these are the most vulnerable workers in New Zealand. We have fair pay agreements—the one for bus drivers is actually quite far progressed, and as much as the Minister says it’s her intention that everything stops, I’m sorry, Minister, but that is up to the law. If there is an existing right, as mentioned in the departmental report under the Legislation Act, that allows some people to continue, then that is what will remain. It is not a dictatorship where Ministers get to decide what goes and what doesn’t. It will be decided under the legislative framework that we have.

The people that would have benefited from fair pay agreements, as I was saying, are the most vulnerable in our country: our bus drivers, our hospitality workers, our security guards, our commercial cleaners—some of the people that clean this very building that we’re in—early childhood education teachers, and our supermarket workers. Some of these—not all of them—were essential workers during the pandemic we just experienced. They do not have, as I’m sure most people in this House would accept, terms and conditions that are favourable or fair. Something has to be done.

What those of us on this side of the House did is look to the evidence around the world. What do the countries that do have fair pay and conditions for these types of workforces have in common? And the answer is quite simple. They have industry awards very similar to the system that would have been initiated under the fair pay agreements. These are countries we like to compare ourselves to, like Australia, like Italy, like France, like Germany—sophisticated economies that have fair pay and conditions for working people.

Interestingly, even since that work was initiated in New Zealand, more and more evidence is coming to light about how a flexible labour market, which has so long been something that those various commentators on the economy have called for, is actually not the way to have a highly productive, fair workforce. I want to note some of the evidence I haven’t been able to touch on in the debate so far. It’s actually work done by the OECD and institutions like the Economic Policy Institute. I just want to read an important quote which I think signals the way that most economists see the way to a productive economy occurring in 2023. So I want to just quote from the Economic Policy Institute. One of the most recent versions of the OECD Jobs Strategy reports came to a different conclusion on the flexibility of the labour market. It said, “countries with policies and institutions that promote job quality, job quantity and greater inclusiveness perform better than countries where the focus of policy is predominantly on enhancing (or preserving) market flexibility.”

So fair pay agreements work, and they don’t just work for the workers who are covered by them; they actually work for the entire economy. That is one of the most disappointing things about what is occurring today: the fact that not only do we lose the ability for these vulnerable workers to participate in fair pay agreements but we did not have a select committee process where we could have gone through some of the evidence that is emerging around how beneficial industry awards and these type of arrangements are. It is incredibly disappointing.

I just want to note for the record that we started debating this bill only this afternoon and we are still in the House here at 11.35 at night.

💬 Hon Simeon Brown: It’s so good.

It’s not good. It’s disappointing and it’s not, in my view, a correct use of the urgency procedure or fair—

💬 Hon Member: From your experience.

Well, some of us have been here a little longer than others. It’s frankly unconscionable that these fair pay agreements are being taken away from these workers just before Christmas.

I want to address some of the comments that the Minister has made, or many comments that have been made in this House, that this is a blunt tool. It is the exact opposite of a blunt tool. The way fair pay agreements are negotiated allows employers and employees to get together—

💬 Carl Bates: Even if they don’t want to.

—and design a nuanced arrangement—

💬 Carl Bates: Even if they don’t want to.

—that applies to their specific industries.

💬 Carl Bates: Even if they don’t want to.

I’ve heard the member Carl Bates interject repeatedly that people will have to join fair pay agreements even if they don’t want to. I ask the member to reflect on his time in the past, being an employee, if in fact that has been his experience. When you are presented with an employment contract, are you given an option of not accepting that employment contract? Most of the time you are not. You are told, in most industries, when you get an employment agreement, that this is the agreement. Take it or leave it. You know, negotiate around a few tiny things. The same thing can happen with fair pay agreements, as long as those negotiations are in addition, are better, than the fair pay agreement minimum. It is a flaw—

💬 Hon Scott Simpson: This is union gobbledygook.

—as I’ve said before, and not a—I think it’s expressed very clearly that it’s a minimum standards agreement, and I’m sorry if the member doesn’t understand it, but we have been covering it for a period of time.

I also want to talk about something that I mentioned in the first reading of this fair pay agreements bill, and that is the incredible amount of work that so many people have put into getting us here—well, to the getting the Act in place, and unfortunately now to being here. I also, before I do that, want to reflect on the legislative process and how sometimes these things do happen and they are incredibly disappointing for people. It’s personally very disappointing for me and it’s also disappointing for our party to have these repealed.

It makes me reflect on an area that I used to work in a lot before I became an MP, and that was in the area of equal pay. There was an Act to allow equal pay to occur, and it was passed I think in the 1990s and repealed very shortly thereafter by the National Government. The Labour Party was incredibly disappointed by that, but, as you would have seen, we have brought back equal pay. There is now a mechanism accepted by both sides of the House, and I acknowledge the work done by those in the National Party in relation to equal pay. It’s an idea whose time has come, and it’s accepted on both sides of the House that people should be paid equal pay for work of equal value.

I know that the time will come when fair pay agreements also are in force again under the next Labour Government. And I know that at that time it’s very likely that those who are protesting and interjecting and opposing this will see that the type of labour market that we want to have in New Zealand, one of high wages, one of fair conditions, one of industry awards that allow our productivity to increase—and that’s actually one of the major findings of the OECD: that it increases productivity. I think we all need to have policies in place in New Zealand that increase our productivity. So that’s one of the main things that I’m really disappointed about—that we won’t get the opportunity to see what I’m sure would have been proven: that industry awards do lead to greater productivity and will address one of the key problems that we’ve had in New Zealand over a very, very long period of time.

I also want to thank the public sector for all of the work that they did in putting this bill into place. Many of the people that worked on this bill are now working to repeal it, but it just shows you their professionalism and their integrity—that they can work with any Government, no matter what side of the House, to do the work that needs to be done.

In conclusion, I just want to look back to our Labour values. Looking at high wages and fair conditions was something that Michael Joseph Savage talked about. He said that “reduced wages will not help trade or bring about prosperity. When workers have money and sufficient qualities, trade, industry, and production are buoyant. But the moment wages are reduced, the very reverse is the case.” I do not commend this bill to the House, and I suggest that the House rejects this backwards bill.

The question is that the motion be agreed to.

Thank you, Madam Speaker. In my speech, I want to acknowledge all the bus drivers; the cafe workers; the people who service our restaurants where many of our families may be going out for a Christmas dinner; our security guards who may be keeping an eye as we do our Christmas shopping; the commercial cleaners who will be keeping our gyms, for example, clean as we stay well; our early childhood education (ECE) teachers, who will be looking after tamariki, and no doubt many politicians will be visiting those centres for photo ops; and our grocery supermarket workers, who we lauded as essential during the pandemic. Many of those workers could have had better working conditions, better pay, safer working environments should fair pay agreements have actually proceeded and continued.

I also want to pay tribute to the union movement. Because through their organising, through actually being in touch with the community, through using evidence, they have put forward really sensible recommendations to ensure that actually we centre the wellbeing of the hundreds of thousands of workers who we often talk about in this House but who the Government has chosen to turn their backs on.

Throughout the debate, there was no—absolutely no—mention of evidence to back up this repeal. There’s plenty of evidence to support why having a minimum standard across a sector is good. There’s evidence overseas from the OECD. Our counterparts in Australia are a great example of why this kind of legislation does work and has endured over time—in fact, over several conservative Governments, while this conservative Government has repealed one of the biggest opportunities to improve working conditions many, many times in less than three weeks, and in a country like this one, where we actually experience a really big number of work-related injuries and deaths.

So the message that this Government is sending is that, “It’s OK. People can continue experiencing poverty wages and unsafe working conditions, because so long as we enable the market to do its bidding then they’ll be able to live good lives.” , because that has worked really well over the past few decades, because this country apparently is at the top when it comes to people’s living standards when it comes to wages versus rents and versus the cost of living.

This Government thinks that the trickle-down economics will deliver change for the workers, and it’s vibes-based politics. The Minister should be ashamed that she has been unable to substantiate the arguments. She has been unable to present evidence, and instead of being able to back up her belief as to why the legislation has to be repealed, she has continuously stated that she believes that this is the right thing to do. Why? Because they campaigned on it. Did they campaign on this based on evidence? No they did not. They were not even able, during the election, to call fair pay agreements what they were. They call it every other name to be able to justify their position based on a house of cards, based on absolutely zero evidence. [Interruption]

If the members there are getting heated up and angry about this, then I suggest that next time they visit an ECE centre for a photo opportunity, the next time they do their shopping or take public transport, that they look those workers in their faces and they tell those workers that they deserve the poverty wages that they have and that they don’t have a plan; they don’t actually have a plan to improve the working conditions of those workers.

💬 Carl Bates: Lower cost of living is what they deserve. Lower inflation.

RICARDO MENÉNDEZ MARCH: Yeah. Mate, you can’t lower inflation by keeping workers in poverty wages. Get a grip on reality. For some of you who may have entered into this place, you’re so eager—they’re very eager; sorry, Madam Speaker. They’re very eager to turn their backs on the communities that they campaigned on, and those members should be ashamed. For a Government that likes to claim that the left doesn’t own the workers, they surely like to think that they do, and they’re obsessed with this individual ownership. What they believe is that the employers own the workers; that, actually, the workers should not be able to have power.

💬 Hon Andrew Bayly: What garbage.

RICARDO MENÉNDEZ MARCH: Garbage? The moment that we hear from this Government, after this repeal, that they have a plan, that they have a plan to lift wages, that they have a plan to guarantee safe working conditions, I will believe those words. Because right now, the only thing that we have heard is vibes. It’s unsubstantiated arguments where they have just told us that they think they have a mandate. But you know what? We’re seeing a rising tide of workers organising to oppose the vibes-based policy that this Government is proposing.

This Government should be concerned that by undermining working conditions, by continuing to keep the workers who serve them—who literally serve them at restaurants, who serve them at the public transport—they’ll be rising up against them. And this Government should not take their support for granted. Because in a few years’ time, what they’ll realise is that their continuous vibes-based policy based on zero arguments will result in poverty wages continuing while the cost of living continues to go up and people are unable to pay their rent and are continuing to work multiple jobs just to survive. If they continue to turn their face away from the streets, away from people living in poverty, what they will see is the continuous people being failed by successive Governments.

💬 Carl Bates: I was at a food bank on Friday, food bank on Monday. Serving food on Monday. Don’t tell me we’re not looking at workers. We’re here.

RICARDO MENÉNDEZ MARCH: So I encourage those members—yeah, picture these workers. Because clearly the Minister chose to not engage with any of those workers when it came to the substance of this bill. In fact, what we’re seeing is a Government that wants to diminish scrutiny on the proposals that they’re putting forward, both in process and in practice.

This Government could have centred the voices of those most impacted, by having taken submissions. They chose not to. They didn’t give a reason for it. So the Green Party will be committed to fighting every step of the way to ensure that our workers continue to be valued; to ensure that our workers continue receiving the wages that they deserve; and that, in fact, we improve those conditions so that the workers that we are supposed to serve have livable wages, not the poverty wages that this Government has guaranteed them for years to come.

So, in closing, I want to remind the Government members that they don’t have a plan to actually address the cost of living crisis, and that fair pay agreements were one of the things in place to guarantee improvements to the working conditions of those workers. They claim that they will give flexibility to those small-business owners, but they don’t want to talk to the business model that some of these businesses they claim to talk to have. Because if those businesses can’t actually afford to pay their workers decent wages, they don’t deserve to then claim to be business owners.

We do have small businesses who do their work to guarantee good wages, and, actually, the research shows that those working environments do lead to higher productivity; they lead to higher satisfaction. If they think that the flexibility of poverty wages is going to lead to any of those outcomes, I suggest that they go back to school and read up on basic economics. Because the economic illiteracy that they have presented with this bill is, frankly, a disservice to the 200,000 to 300,000 workers who would have benefited from fair pay agreements.

So as we head into Christmas, I want to remind the Government of the cancel culture that they continue to engage with: cancelling the fair pay agreement, cancelling the clean car discount. This is not a Government with ideas. This is a Government that is here to take us backwards, turn the clock back to the failed neo-liberal ideology that has caused rising inequality in this country, and I look forward, in terms of this Government, to be proved right in three years. Our people actually do not deserve this. Our people do not deserve a Government that does not care about inequality, that does not care about poverty, and that does not care about working people.

Shame on this Government. The Greens will ensure that this is a one-term Government and that the workers take back the power in this Chamber.

Today is a great day. It is the day of the liberation of New Zealand from the Fair Pay Agreements Act (FPA). The FPA is simply a mandated union bargaining tool and we will not stand for it. So, with that, I commend this bill to the House.

New Zealand First supports the Fair Pay Agreements Act Repeal Bill for the reason that the Fair Pay Agreements Act is bad legislation—it’s the reason why we put the handbrake on it when we were last in Government and didn’t let it see the light of day. Despite the protestations of the members opposite, these are highly complex agreements that severely disadvantage regional employers.

It was actually illuminating that Minister van Velden notified the House that very few of these agreements were actually started. That shows that either it is not a priority or they were just too hard to get off the ground. Make no mistake, though, New Zealand First has always been in favour of steady rises to the minimum wage. Every time we have had a chance to be in a coalition agreement, we have always used that leverage to advocate for our lowest-paid workers, and we believe that as a Government, we should put pressure on the lower end of the market. But we have a track record of delivering for those workers, and we are proud of that. Camilla Belich inadvertently let the truth slip out in her second reading speech, when she reflected that unionised workers were actually unlikely to benefit from this, because they could already collectively bargain—so mechanisms are already in place for workers in those industries.

💬 Arena Williams: 80 percent are not unionised. What about them?

Well, that’s the union’s problem; it’s not the Government’s problem to deal that out. These are overly complex agreements and they are superfluous. Those of us that have been out in the real world know that anyone that is a good worker is highly valued at the moment. We have low unemployment and employers are screaming out for those good workers, and if not here, we have the competition from Australia. So market forces are actually fully in action. This was a solution looking for a problem; it would stifle flexibility in our labour market, it would decrease the appetite for employers to take a risk and employ people. This is bad legislation and we are proud to put it to bed. Thank you, Madam Speaker.

The next call is a split call, and Te Pāti Māori has five minutes.

Tēnā koe, tēnā koe te māreikura. I find it infuriating but not surprising that this House and this Government can move a piece of legislation through like this in one day without any accord or regard or consultation with the Tiriti partner. No regard to the Māori economy—no regard to the Māori economy, and without any understanding of the profound impact that this bill will have on the vast majority of Māori who are employed in the low to minimum wage segment of this economy.

Those families have kids, youth, rangatahi—they live in Aotearoa. They’re the principal partner into Te Tiriti o Waitangi. I haven’t heard them talked about or even given regard to have their opinion counted once, and this is all pushed through in one day. And this team over here, they have the capacity to draw this. I know it, it’s in their team, but they have failed to do so.

So it’s not surprising the words I used earlier this morning from one of te ao Māori’s leading economists of this generation, Whatarangi Winiata. Hey, Māori had consistently been the shock absorber of the New Zealand economy—the last to be gainfully employed, first to be dismissed, and this will ensure that that’s their fate for three more years. And when you compound that with a cost of living crisis and an attitude from a Government that seeks to give no voice to their partner, then you can expect them here, outside.

💬 Dan Bidois: Why do you set such low expectations for us?

TĀKUTA FERRIS: The expectations set in the Māori economy and within te ao Māori are anything but low—anything but low. But, hey, we’ll be back tomorrow, and we can talk again. I’ll leave it at that.

The time has come for me to vacate the Chair. The House is adjourned until 9 a.m. tomorrow morning.

Debate interrupted.

Sitting suspended from 11.56 p.m. to 9 a.m. (Thursday)