Employment Relations (Protection for Kiwisaver Members) Amendment Bill

Thank you, Madam Speaker. I’m happy to speak on the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. This bill is quite significant because it addresses one of the loopholes that has been created. In the words of the Retirement Commissioner, Jane Wrightson, she mentioned that the current state of the Act, when it comes to KiwiSaver and superannuation, goes against the essence of what KiwiSaver is supposed to be. I would like to thank Dr Tracey McLellan for actually bringing this bill to the House.

In the broader context of this bill, the reason that it was introduced is that in the review done by Te Ara Ahunga Ora - Retirement Commission, 45 percent of employers used a total remuneration approach to KiwiSaver for at least some, if not all, of their employees. Also, 21 percent of them admitted that it was because it is cheaper for the business. So, in many ways, that is not done in good faith and in line with what we wanted to see when it comes to KiwiSaver.

This has a lot of implications, both in terms of superannuation but also in terms of KiwiSaver, because the essence of it is that we wanted to see our elderly, when they are at retirement age, being able to benefit from such a scheme not at the cost of their own salary and their own income. In a 2023 review, 20 percent—we’re seeing that now, 20 percent—of our elderly over the age of 65 no longer own their own home. It is projected that in 24 years, 40 percent of them will no longer own their own home. And those are people of my age and generation. This is significant because if we have a system where we allow employers this ability to actually create a system where the KiwiSaver is built into a person’s natural salary, it actually means that not only will they have less to spend later on in life when they’re getting ready to retire, but they also have less to go on now.

When it comes to this particular scheme and when we have employers using a total remuneration approach, if we are looking at the current status of the minimum wage and roughly an annual income of about $48,000, having 3 percent of your income being built into your KiwiSaver amounts to roughly $27 a week. If this bill is introduced and passed in the House and employers are no longer able to exploit this particular element, we will see New Zealanders who are on a low to medium salary actually benefiting more than what this Government has put in in terms of their tax cuts. If the Government is really keen on having people benefiting more and having more income after tax in people’s pockets, they should be able to support this particular bill.

Indeed, in the first reading, the members from the opposite side actually mentioned that they have noticed that there is an issue and that this is a genuine and potential problem, and the National Party in particular did support this bill through the first reading. However, we have seen in the second reading that there is this kind of flippity-flop thing where they then suddenly came back and said, “Oh, this is an ideological bill and it’s a bill that is seeking a problem.” This completely goes against what they said in the first reading. A question there would be: what happened between these two readings? Why, then, did the Government support the first reading but not the second?

This particular bill would be significant, and this particular bill is going to be significant, for those people who are struggling with the cost of living already. I would like to encourage, as we progress this bill, the Government, who claims that their tax cuts benefit low and middle income New Zealanders and that they are doing everything right for low and middle income New Zealanders, to seriously consider supporting this bill through the committee stage and through the third reading, because this would genuinely help those people. Thank you.

Thank you, Madam Speaker. I’m taking this call on behalf of our member Todd Stephenson who sat on the Finance and Expenditure Committee through this. ACT does not recommend that this bill be passed, for various reasons. One is because we believe this bill would negatively impact the relationship between the employee and employer. The majority of employers act responsibly when it comes to the employee’s KiwiSaver membership. Flexibility should also be maintained in relation to the total remuneration approach. This is a benefit for both the employer and the employee.

This bill creates uncertainty for employers by creating a new circumstance in which new personal grievances could be made, including when they might alter existing employment relationships. This is something we clearly do not agree with. We do not believe that creating more hoops for businesses to jump through under the Employment Relations Act is productive for employees and employers, and we believe this bill needlessly adds more unnecessary State involvement into the private sector.

We take on board the recommendation of the Finance and Expenditure Committee. The majority of the committee ultimately do not agree that the bill should be passed. That is the rest of my speech for tonight. Thank you.

Thank you, Madam Speaker. I rise on behalf of New Zealand First to speak on the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. Like the previous speaker, Laura Trask, New Zealand First does not support the passage of this bill any further. But it was interesting as a new member of the Finance and Expenditure Committee—it was one of the first bills I got to hear submissions on. It was a bill that came from the 53rd Parliament, so New Zealand First didn’t have a vote, obviously, on the first reading of this.

It was interesting that, when submissions were called for this bill, we received only 14 submissions. Of those 14 submissions, we only heard two oral submissions in hearings. One of those submissions that we did hear was from BusinessNZ, and I will come back to the BusinessNZ submission because it actually is quite enlightening, some of the points that they brought up during the oral hearing.

So, firstly, when we actually did hear and read the submissions, it was actually really hard to work out what the problem was. Obviously, the member in charge, Tracey McLellan, had taken the time to put the member’s bill up, but, like many things when these things are explored more, the research that was done in the background actually showed that there isn’t a problem that is really raising its head. It was actually asked of the officials on probably about three occasions, “Please come back and give us some real-life examples of where this is actually happening”, and that wasn’t happening through the select committee process. As I alluded to, we received 14 submissions and, actually, only had two of those submissions turn up and actually speak to the select committee and kind of raise that concern of what is actually the problem here.

There’s no doubt that New Zealand First supports KiwiSaver and the benefits that has given to New Zealanders. Actually, the KiwiSaver is something I think we can all be proud of as New Zealanders. It has got a history, and I think it was around 2007 when the KiwiSaver scheme was introduced—or finally introduced. That took a number of years. I even remember in my teenage years—it was probably the late 1990s or early 2000s—the Rt Hon Winston Peters at the time discussing long-term savings. If I remember right, in my earlier days—before paying too much attention to politics—there was actually a referendum on that. I think that people of the day were not as happy about a compulsory scheme, and that’s where that fell over. But, later on, obviously, where ideas grow and people think a bit more about it, this KiwiSaver scheme was born. Credit to the Hon Michael Cullen, who was the finance Minister of the time who actually introduced this.

Over time, the KiwiSaver scheme, as we know, has grown, and there’s over 3.25 million people in that scheme. As I say, going forward as a country, it is going to be of benefit to all of us because the main intention behind KiwiSaver is to save more for our retirement. That’s a goal for all of us as we grow older—actually having KiwiSaver in our back pocket, as you would like to say. But KiwiSaver’s also given other benefits, obviously, over time, with younger people being able to access their scheme and actually put money towards their first home. Those kinds of incentives, I think, have been really, really good.

As I say, KiwiSaver is an opt-in and an opt-out scheme. Obviously, through the submissions, and through the BusinessNZ submission, that voluntary system that is there at the moment also allows the opportunity for employers and employees to have a discussion when someone is first taken on into a role. There’s an approach, under section 101B, called the total remuneration approach. That total remuneration approach is a discussion that happens at the beginning of your employment. In some cases, employees and employers take that amount—whether it’s $30 an hour or $27 an hour—and, under a total remuneration approach, your full salary, including KiwiSaver, could be included in that amount.

The argument that was put forward in this bill was that someone in the KiwiSaver scheme shouldn’t be discriminated against for being in the KiwiSaver scheme. Basically, they were saying, if you were getting $27 an hour, it should be on top. But the logic here is there’s already that initial discussion around that total remuneration approach, and that actually solves a lot of the issues. As I say, we just did not hear the concerns through the submissions.

The thing I did learn through the BusinessNZ submission, which I did want to allude to, was there is protection already for people on the minimum wage. And, to note, if someone is on the minimum wage, you can’t pay them less than the minimum wage. You can’t take KiwiSaver back and then add it on to get to the minimum wage—it has to be minimum wage plus. For a lot of the things that this was trying to fix, there is already initial protection there. That is also a benefit that is already in the scheme.

So, overall, New Zealand First will not support the passage of this bill. It believes that the mechanisms already in place are enough. This is also a time, at the moment, with obstacles around business, and one has to look at putting more work on to businesses when they’re struggling, and also those relationships. As I say, with the relationship at the moment and the way that total remuneration package is put together, it makes sense to keep that as it is.

The main reason New Zealand First will not support the passage is that there was just a lack of evidence on the ground. We just did not hear, through those submissions, the need to actually support this bill any further. On that, New Zealand First will not support the passage of the bill any further through the House. I do not commend the bill to the House.

The Green Party’s really happy to be supporting this bill because, ultimately, this is about protecting our workers, making sure that people have good wages and that there’s just no discrimination in the workplace in relationship to those people that may be on a KiwiSaver scheme or otherwise. This is common sense. Those protections should be in place and should never have been removed. As we have a growing ageing population, it’s critical that we actually bolster the support mechanisms that exist for people to retire with enough savings and the safety net to allow them to lead good lives, because the number of older people who are renting and who are living in poverty is increasing. The last thing we want is people being discriminated against based on whether they are on a KiwiSaver scheme or otherwise.

It’s really interesting how, for the passage of this bill, the rhetoric from the National Party members in particular has changed, because if I look back at the contributions from the first reading—and I’m just going to quote Simon Watts here from the first reading—he basically talked about how this is a good bill. He specifically talked about—he didn’t want to speak long—how they were going to be supporting this bill. Then we also got the first reading speech from Hon Paul Goldsmith, who said that this bill had identified a problem.

But then how quickly we move to, say, other types of rhetoric in the contribution from Louise Upston in the second reading, saying that this was an ideological bill. So what changed? Was it the baubles of office that made them change their position, or was it easier to take a position of supporting this bill when in Opposition? Ultimately, this is at the expense of workers. I guess it should come as no surprise that at the second reading, the National Party MPs are showing their true colours and turning their backs on workers, as they have done, actually, throughout the passage of legislation while they’ve been in Government.

The Green Party will continue supporting our workers to ensure that they can retire with a safety net that allows them to live with dignity. No one in the workplace should face discrimination for the type of retirement scheme that they’re in. To hear the New Zealand First MP Jamie Arbuckle talk about how minimum wage workers will be protected anyway, I guess, just reeks of the kind of low-wage economy that Government members are quite comfortable having, because, ultimately, we want people to earn good wages, not just to be on the minimum wage. Having those protections in place actually guarantees that workers can continue to grow their wages without that discrimination happening. At the end of the day, members can’t have it both ways. They can’t continue the discrimination that workers face when it comes to having a good retirement plan and keep, say, the superannuation below the poverty line for many of our older people who will continue to be renting as they retire.

The Government side of this Parliament is accepting that we’re going to have more people living in poverty as they retire. This bill would have protected some workers by boosting their incomes throughout their lifetime as they work towards retirement. At the end of the day, we should not accept that any older person has to live in poverty, so we commend the member who brought this bill forward, and we do hope that the Government takes the wellbeing of our ageing population seriously. Let’s not mistake the breadcrumbs that they’ve given our communities as genuine safety nets for those people that are doing it tough.

Finally, I just want to say it’s good to have these receipts from the National Party MPs, where they were quite happy to pretend they were supporting this bill at first reading and, then, somehow turned their backs without actually explaining why. I think that part of the problem I have is they haven’t really explained and articulated what exactly changed from their kind of uncritical voices of support at first reading to now calling it an ideological bill, because every bill is ideological, actually. There’s no such thing as lack of ideology in this House when it comes to legislation. You literally can’t take politics away from Parliament—this is a political space. So let’s just make it clear: all the National Party is doing is showing their true colours by, once again, voting against a bill that would have protected workers.

Thank you, Madam Speaker. It is a pleasure to speak on the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. I want to congratulate the member who has got the bill to this stage. It was a pleasure to actually have it in front of the Finance and Expenditure Committee.

I want to address a couple of the issues raised by the Green member Ricardo Menéndez March. He asked what had happened between the first reading and the second reading. Well, I don’t know if he’s aware, but it went through a select committee process. Madam Speaker, as I’m sure you are aware, the select committee process is the major part of our legislative process. All of our members in the House are members on select committees, and they put a lot of work into select committees. One major part of that, of course, is scrutinising legislation, calling for submissions, reading submissions very carefully, hearing oral evidence from those submitters, and then going through a process with very hard-working officials and select committee staff to try and improve the bill and to take note of submitters’ issues that they had raised or ways the bill could be improved, and, indeed, in some cases, coming to a different view. That is what has happened for the National Party. I think that shows pragmatism. I think that shows the select committee process actually working as it was supposed to do.

I want to thank all of those people who did submit. There weren’t that many submissions, I have to admit, and we only had two that appeared before the select committee, as my colleague Jamie Arbuckle mentioned in his good speech on this bill. That, as Jamie so eloquently put it, really brought it home for the New Zealand First member on the select committee that this was, essentially, a solution looking for a problem, well-meaning as it is, and that it has a good outcome on the face of it. That’s why, at first reading, we supported the bill. It looked like it was going to really provide something and bring something to the table.

Unfortunately, once we got into it, it actually became quite obvious that there were some issues with it. It was going to add complexity. Really, that solution wasn’t going to be that great. If, as was indicated by the Green member just previously, there was such an issue, if it was such an issue for workers, where were they at the select committee process? Where were they? Why didn’t they submit?

Dr Lawrence Xu-Nan: They were working.

STUART SMITH: Oh, they were working! They were working. OK. Well, people came out in large numbers for a whole lot of things. If it really means anything—nowadays, we do take submissions, particularly on the Finance and Expenditure Committee, and I think all the committees do, by Zoom. People could come during their lunch hour—usually it’s five minutes for an individual, but maybe it depends on the select committee; it could be more like 10 minutes—for a submission. It’s not asking them to take a day out of their work life and a significant impost on their pay. I really do recognise those people who the previous member was talking about, those people on the lower incomes. Absolutely. There’s no way that we would expect them to sacrifice a day’s work for something like that. If they really did think there was an issue, they would have found a way to appear before the committee. But they didn’t submit, and they didn’t turn up, because there were very few submissions. BusinessNZ’s submission was a good one. I remember that one quite well and their appearance before the committee.

Before I took it back to the caucus and before we deliberated, I did quite a lot of work. I called around a number of other people, doing my own research outside of those submissions to the select committee, trying to find a way to make this work. Unfortunately, it just wasn’t possible. That said, superannuation is a big issue for New Zealand. We do have an ageing population. We have an economy that’s actually only just starting to see some green shoots now that we’ve got in behind the driver’s wheel, if you like, of the economy and are getting things back on track.

Some of the things in this bill we did do to change it. Actually, we changed the name of it. We capitalised the “S” in KiwiSaver. We did very important work in that—small but important. There were so many things that we went through in looking at how this would work in practice. One of the bigger issues that we have was that this was going to be another avenue for personal grievances. Now, that’s fine if the personal grievances are worthy, but sometimes they’re not, and we couldn’t really find a way to make that work. That also was a major red flag for me.

Clause 5 in the bill would insert new section 110C into the Employment Relations Act, and that sets out an adverse effect test that would be used to determine whether a worker is eligible to raise a personal grievance. I’d have to say, at the end of that, I didn’t think that really brought any clarity to the bill, and I was a bit concerned—well, in fact, very concerned—about that. I thought that was going to be quite difficult for us to deal with.

The bill did seek to—in the end, it’s about discrimination between people who have taken a full remuneration approach or have their wage and salary paid to them, and then the employer’s contribution is paid to their KiwiSaver account, versus those who just have that KiwiSaver remuneration, 3 percent, that goes on top of their salary, and they keep the money and choose to do what they want with it. We did find out, actually, that KiwiSaver is not the only way that people save for superannuation; there are many other schemes. This was too narrow, so we sought to expand that because, ultimately, employees should have rights to choose their own path if they wish to. There are plenty of other mechanisms in the law to protect people from not being treated fairly. While this bill was worthy in that sense—in its aim—it really didn’t help make the boat go any faster.

My colleague Jamie Arbuckle—I think it was—mentioned the minimum wage protections, and that’s absolutely the case. I think that is another safety net that we can feel confident that this bill wouldn’t help. I believe, at some point, there will be some piece of legislation that will come through, which will include something on this in the future. But I don’t think the work was able to be done in the back or in the early stages of this bill’s life to get all of those little things ironed out with all the policy work that needed to be done. It’s unfortunate that we’ve got to this stage.

I do, once again, want to thank all of the submitters. Although there were few in number, at least they did submit. I can assure them that their submissions were considered very carefully. I guess, given the small number of them, Madam Speaker, as a select committee member, you do soon find out if people have read their papers or not. On this bill, they had. I can assure you that everyone around the table had read those papers, even whether they liked the bill or not. That’s an important part of our democracy, as I said at the beginning of my speech.

I do want to congratulate the member for getting this far. It’s not easy, as we all know. I also want to thank the other members on the Finance and Expenditure Committee for the work that they did on it. The National Party won’t be supporting the bill past this point, but we do think that the member did put her best foot forward, and we just, unfortunately, can’t support it. Thank you, Madam Speaker.

Thank you, Madam Speaker. Mālō e lelei. I want to begin with just a little bit of history, given something that one of the speakers on the other side has talked about, and that is of the 1997 referendum on the compulsory superannuation scheme proposed by then the Hon Winston Peters, who, at that stage, was Treasurer. So that was a referendum on whether or not we should have a compulsory superannuation scheme.

It was an interesting model. The idea was that each worker—wage and salaried worker—would pay 8 percent of their income to Inland Revenue every year. In return, at age 65, a person would be guaranteed a lifetime annuity equivalent to 33 percent of the average wage. I’m just going to venture to suggest that that doesn’t seem like a particularly good model now. The speaker from New Zealand First, Jamie Arbuckle, was sort of interested as to why people had voted against it. I’m going to suggest that the particular scheme had some rather large complications, but also, because we do politics, I’m going to suggest there might have been political reasons for voting against it based on who it was being sponsored by. That’s just one of those things; it’s the way that politics works.

The history of this particular bill is quite interesting too. I just want to recall why KiwiSaver came into being. It’s a problem that we have acknowledged already in this debate, a problem that, in fact, the superannuation scheme that Mr Peters was sponsoring back in the late 1990s was trying to address, and that is the low retirement savings of New Zealanders.

We knew that New Zealanders needed to be encouraged to save more for their retirement. Of course, we also looked across the Tasman and saw the success of the superannuation scheme there. Thanks to the far-sighted and excellent work of Sir Michael Cullen, we had two major steps taken in terms of New Zealanders’ retirement savings. Now, one was the establishment of the New Zealand Superannuation Fund—known as the Cullen fund—and the other one was KiwiSaver, encouraging New Zealanders to save for their retirement and ensuring that employers contributed as well. Both of these were targeted at ensuring that we could afford to support our senior citizens in their old age and that we could continue to ensure that older New Zealanders had some dignity in their old age.

We were the first country in the world to introduce old retirement incomes, retirement superannuation schemes, a pension for our senior citizens, and we should be very proud of that. One way and another, we’ve kind of more or less solved some of the problems of old-age poverty in New Zealand. It’s not pretty for people who get to retirement age and have only their New Zealand Super, and it works better for people if they have substantial savings in KiwiSaver as they get to retirement age.

Of course, being the generation that we are, KiwiSaver didn’t come along until we were perhaps some way through our working careers. But even if people didn’t join KiwiSaver when they first got a job, the next best time to join it and start saving with KiwiSaver is right now. The best thing that we can do as legislators, as people who are responsible one way or another for the stewardship of KiwiSaver, is to keep on improving it; to keep on making sure that it becomes a better and better scheme. I think one of the steps we need to be taking is making KiwiSaver compulsory for everyone. We should be eliminating some of the things we do at the moment with KiwiSaver like the contributions breaks and so on. We should just be making it compulsory, and we should be supporting people to have decent wages so that they can afford to save for their retirement.

This particular bill, which was brought into the House by Dr Tracey McLellan, had one of those enhancements for KiwiSaver. Now, when KiwiSaver was first introduced way back—when it first became operational—in 2007, this very protection for workers was in the KiwiSaver Act. It was sitting there right from the start. In fact, there was a series of protections for workers in the original KiwiSaver legislation. Then it was taken out by the Employment Relations Amendment Act in 2008. This particular protection was taken away, and it’s an important one.

Now, this particular bill is phrased in terms of discrimination, but what it really prevents is an employer exerting pressure over an employee to ensure that instead of the employer’s KiwiSaver contributions coming out of the employer’s funds, it actually comes out of the employee’s remuneration. Perhaps when there is a shortage of labour in the economy and when workers are able to command better salaries and so on, then it’s not such an issue.

In a time of rising unemployment, in a time when people are kind of getting a bit desperate to get a job, in a time when unemployment is predicted to rise, and in a time where employers—businesses—are not creating extra jobs, then the employer has the advantage, and the employer can discriminate against workers. This is what this piece of legislation seeks to change to ensure that at least in the matter of KiwiSaver, an employer cannot discriminate against a worker.

Now, the reasons given by the members of the Government parties as to why they are not going to support this legislation are listed in the select committee’s report. They say, more or less, that they don’t think that we should have additional hurdles for businesses or additional costs for businesses which would not benefit either employees or employers. But what of the long-term cost of ensuring that all of us support each other and of the long-term cost of supporting New Zealanders when they retire? It is a very short-sighted view that the Government parties are taking here.

It’s a real shame that they are not supporting this bill—this bill that simply puts back in a protection that was there right from the start when the Hon Dr Michael Cullen first devised KiwiSaver. What a shame—what a shame.

Congratulations to Tracey McLellan for all her work on this bill. It’s the sort of thing that when we are back in Government in 2026, we will be promoting—

Camilla Belich: Two years.

Hon Dr DEBORAH RUSSELL: Exactly—this kind of protection for workers, as part of our proud history of being the workers’ party in New Zealand. This is a sad day.

Members, the time has come for me to leave the Chair for the dinner break. The House will resume at 7.30.

Sitting suspended from 5.57 p.m. to 7.30 p.m.

Members, the House is resumed. We’re on the second reading of the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. I call the next speaker, which is call No. 9, which is I believe is the National Party.

I rise to oppose this bill, the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. Having sat on the Finance and Expenditure Committee listening to the submissions and the officials—

Hon Member: Hard-working committee.

CATHERINE WEDD: —provide advice on this bill—yes, a very, very hard-working committee—I wondered all along, as I was listening to just a few submissions, actually, what is the point? What is the point of this bill? It is an absolute ideological bill, because there is already sufficient legislation in place which provides protection. On this side of the House, we do believe in KiwiSaver, and we believe in supporting hard-working New Zealanders and enabling them to keep more of what they earn and save for their retirement. That is not the issue. The issue is that this is an ideological bill with not a lot of substance, because there is already legislation in place.

We’re focused on delivery and focused on things that really matter, and what I struggled to understand with this bill, the entire process, is what is the point? We don’t need to create regulations and rules for the sake of it when they already exist. When members’ bills are put forward, they are meant to make a real, real difference, and I certainly do commend all members for putting forward members’ bills, because, you know, they do make a big difference. Actually, I’ve got a member’s bill that has been drawn from the biscuit tin, which I’m really looking forward to navigating through and which will provide more mums and families with more protection after having babies, a post-natal care bill which provides a three-day stay.

Today, we’re focusing on the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. This bill is really trying to find a solution for a problem that doesn’t exist, and this was the common theme through the select committee process, when we just actually heard a couple of submissions. Many times—many times—to the officials, I said, “Can you please give an exact example of where an employee has been discriminated against on the grounds of having KiwiSaver?” and they could not give one tangible example. There were no examples, because there is already sufficient legislation in place that would deal with this if this situation was to arise.

This bill is, basically, about creating legislation for an example and a situation which hasn’t actually existed and happened yet.

Helen White: Do you understand the bill?

CATHERINE WEDD: In fact, officials advised us that the law in this area is already really robust, and I will point out to that member on the other side of the House that this was asked to officials many times through the submission process, and they said that this situation hasn’t actually arisen. So it’s a typical ideological idea, dreamt up from a member on the other side of the House, that creates more work, more bureaucracy, more time-wasting, and more costs when businesses are already under the pump in a cost of living crisis and in times when it is really tough. They’re already struggling to survive at the moment, and they don’t need another regulatory burden hanging over their heads and creating more stress for everyone when there is actually no problem that currently exists at the moment.

Let me give some examples of the very few submitters that we heard from. From the CEO of Business Canterbury: “I’m not supportive of this bill,” she said. “My first thought is: what is the problem we are trying to solve with this bill? I am not aware of any problem, and I have not heard any concerns in this area.” This is from Business Canterbury. You would think that she would have heard some concerns in this area. She said, “There are many employers that operate on a total remuneration policy which is outlined in their IEAs and explained at the time of appointments being made.”—makes sense—and said that “The changes being suggested would potentially create unintended consequences and potentially increase costs for businesses without providing any certainty.” This is at a time when we do not want to increase costs for businesses, and we want to give more certainty and security to our businesses so that we can power up this economy again and get it back on track.

Business New Zealand submitted that the KiwiSaver Act recognises the reality of the KiwiSaver contribution management, which avoids any pitfalls. They recommended that the bill not proceed. So from the very, very few submissions that we heard, they recommended that the bill not proceed, because there is already legislation in place if—if—this particular situation was to arise.

If we look across New Zealand at the moment, businesses are really struggling. Times are tough because of the wasteful spending that we saw by the previous Government driving us into more and more debt, driving up inflation and interest rates. The last thing businesses need at the moment is another bill with more regulation and more cost for businesses.

Just in the 10 months that we’ve been in Government on this side of the House, we’ve been working incredibly, incredibly hard, and finally there is confidence and optimism across business again. We are starting to hear that we have got green shoots. There is optimism again. Inflation is coming down for the first time in years. Interest rates are coming down, and New Zealanders are starting to see the light. Last week, we saw the Reserve Bank lower the official cash rate. Spring is nearly here, and things are looking brighter, because on this side of the House, we are respecting hard-working New Zealanders, providing tax relief after 14 years, enabling hard-working New Zealanders to keep more of what they earn and save and put those earnings, perhaps, into a retirement fund. In fact, an average household will get up to $102 a fortnight. That is going to make a huge difference for the grocery bills, the fuel bills, the electricity bills—everything that has been going up. This is really, really important when we are trying to get this economy back on track.

Another action that we have also taken as a Government to support businesses is our banking inquiry. Our New Zealand banking sector is one of the most non-competitive in the world.

Hon Dr Duncan Webb: It’s our banking inquiry. I signed off that inquiry—my banking inquiry.

CATHERINE WEDD: Our banks are making the biggest profits in the world, and there is so much evidence which shows they are not competing for the good of our New Zealanders. We are not content for New Zealanders to get a raw deal. We want New Zealanders to get a good deal, and there needs to be more competition. Our Australian neighbours are getting all the benefits of innovation and technology. That member that is talking about that is involved in the banking inquiry, actually, which we are all supportive of because we want New Zealanders to get a good deal.

That is why we are actioning the recommendations this week of the Commerce Commission’s banking report and we have launched the banking inquiry also. All of this is going to help get our economy back on track and help businesses. Just in the past week, we have had a recess week, and—

Hon Dr Deborah Russell: Back to the bill—the bill. Talk about the bill.

CATHERINE WEDD: Yeah, no, I am getting back to the bill, because I’m talking about the hard-working businesses that this bill would impact. Just last week, I was out visiting many, many businesses across the Tukituki electorate, and I must say—I’ll just give a shout-out to Hawk Packaging. Hawk Packaging is this incredible business that is taking 13,000 tonnes of roadside recycling waste, and they are making apple trays—apple trays—to send our apples all around the world. It’s quite incredible, actually, because this is a sustainable, innovative business that is employing dozens and dozens of people. They are hard-working people—

ASSISTANT SPEAKER (Teanau Tuiono): And if you could come back to the bill, that would be helpful.

CATHERINE WEDD: —of New Zealand who are getting our economy back on track. They’re driving more productivity, but they also have a very, very large team of employees, and they do not want to be inflicted with more red tape, regulation, and unnecessary bills that would inflict more compliance and cost and bureaucracy. That is not what we need right now. The adoption of this proposed bill would limit the ability for employers to opt for a remuneration approach that is most suited to their business. On this side of the House, we’re all about choice. We believe in personal choice and in making your own decisions, not having this centralised bureaucracy thrust upon you—all these regulations and rules. This bill limits employees’ ability to choose the saving approach that best suits them. On this side of the House, we are all about practical solutions and creating legislation where it’s needed, and this is not needed.

The member’s time has expired. The next call is a split call between Labour and National.

I guess I’ll take the call. I’m not sure what’s going on in the electorate of Tukituki, but I think someone had one too many Berocca this morning. There was some enthusiasm going on over there. I’m a little bit shocked and dismayed, and where the member addressed the bill, I’m unsure, but it was a wonderful party-political advertorial for the last 10 minutes. It was magic, and I’m hopeful that the little gold stars that they get in the caucus room for every time they get the talking point right—I hope that she’s top of the leader board for that.

As people have reflected on during the first reading and now the second reading, there’s been real reflection on the history and on, I guess, the bigger question of retirement and of having money tucked away to ensure that people actually do well. The Hon Dr Deborah Russell spoke earlier and gave a bit of a history lesson about the 1990s. I was looking back to the 1970s and Norm Kirk’s superannuation bill—

Rachel Boyack: Didn’t National trash that too?

GLEN BENNETT: —which got trashed, but that’s another point. The reality is that this is around the protection for KiwiSaver members. When KiwiSaver was first brought about and when the Hon Sir Michael Cullen established it back in 2007, I was in a position where I wasn’t actually able to sign up. I was in a different position in our household. We didn’t have a lot.

At that time, our choice was not to sign up for it, but I’ve been a part of it for a long time now, and so, as I look at this, it’s very much—as other members have said and as our member Tracey McLellan, who has presented this bill, has said—about protections for people. It’s actually about protecting people from discrimination, and the previous member had talked about a member’s bill that they have in the ballot around young mums, and I’m sure it sounds wonderful, but this very often is about women who are discriminated against, because they leave the workforce to go and look after their children. The officials said there wasn’t a problem to solve—that there’s nothing there—but the fact is we don’t actually have the data or the information on this to know exactly what is going on there.

This is fixing something, as well, that had been taken out in 2008. This is ensuring that we protect people and ensuring that we don’t discriminate. I commend this bill to the House.

Thank you, Mr Speaker. It’s a great privilege to speak on this, and I commend the member for getting a member’s bill drawn out of the biscuit tin. I look forward to that day as well, but, unfortunately, as has been said, we can’t support this tonight. As the great chair of the Finance and Expenditure Committee said earlier in the evening, does this make the boat go faster? What is the problem that we’re actually trying to solve?

I read through the bill notes and the purpose of the bill, but I still struggle to actually see how this is moving the needle and how is this going to help employers or employees. In fact, it says here, “the difference is that there is a perception that the employer is not when a total remuneration package is utilised.” It is a perception. There are no actual facts here.

What is the percentage of employers that are abusing or discriminating? Do we have that information? No, there are no examples. It’s yet another compliance burden. While, on one end of the House, we’ve got one of the leaders of the ACT Party Brooke van Velden working on streamlining things for employers around payroll, around software, around the Holidays Act, and all that complexity, here we are trying to add another level of complexity for employers.

Who are the employers? Well, 95 percent of New Zealand is made up of small businesses that employ, that take risk, and that pay and look after their staff well. Why are we trying to penalise employers again and again and again? This is one of the great challenges between left and right politics. The left think they’re doing the right thing by looking after the employees and lifting the minimum wage and lifting all these things, but what they fail to understand is all that means is more cost and more compliance for business, and they’ve got to lift their prices up and provide goods and services at a higher price. And who’s going to pay for those higher prices? The very employees and all of the people that they’re trying to help. It’s a complete false economy.

Both sides of the House actually talk about the benefits of a more productive economy, more productivity, and how we do less with more. Whether it’s a tech company, whether it’s agriscience or the agricultural industry or the horticultural industry or improving the apple supply out of Tukituki or the farmers around the great Waikato or the beautiful restaurants in Hamilton East, how do we increase productivity? Well, I’ll tell you how we don’t increase productivity: by putting more complexity and compliance costs on employers.

In fact, one of the things that the bill proposes to do is make it easier to take out a personal grievance. Well, that’s the way to build the economy—more personal grievances! Let’s penalise employers with more personal grievances, because that’s a win-win! The personal grievance industry has only grown under the last Government. Let’s give an example: if an employee complains and they have to go to mediation, there’s no win for the employer. They’re generally going to have to write a cheque for $5,000, for what? Just to make the problem go away. More cost to employers. What does that do? It makes them less likely to want to employ new employees. It makes their business stay small and makes them risk averse. Thank goodness we got rid of 90-day trials for big business as well, because it opens up the ability for people to take risk and take on new employees, and it’s such a key thing.

The previous Government was really keen to reduce productivity, to stymie it, to make it more stodgy, to slow it down, to dampen it. Let’s look at the relativity element, which hasn’t really been discussed in this bill. What if someone has got existing employees and they take on a new employee and they say, “OK, we won’t discriminate. We won’t use your added advantage of the employee compensation scheme, so we’ll build it into your package.”, and they talk to the colleague beside them that says, “Well, how come you’ve got that? You’re $3,000 better off than me. Mr employer, he’s $3,000 better off. I want a pay raise—I want a lift.”? So what does the employer have to do? He’s got to adjust all the pay rates across all his organisation so everyone feels better. And what’s that done? It’s just lifted the costs for all the employers, and those costs get put on to the end user—and round and round we go. It’s a really important thing, but it’s a red herring.

On this side of the House, we’ve actually got these things called values. And one of them is less government, personal choice and responsibility, competitive enterprise, and reward for achievement. Here’s a thing that works really well if you want to better your employee wages and things: turn up early, stay late, work hard, and get paid more. Thank you, Mr Speaker.

Mr Speaker, thank you. I’m a little bit disturbed at the lack of understanding that I am seeing on the other side of the House about what this bill is about, but I’m also quite concerned at the confidence that people rely on anecdotes that are actually just inaccurate, and we have a problem in this country because we simply do not gather the data that is really pertinent to understanding what the problems are in issues like employment.

I worked as an employment lawyer for 25 years, and in that time, I saw a lot of problems, but there were a lot of problems I never saw which existed and which never got anywhere near an official at the Ministry of Business, Innovation and Employment who might have been advising on this, because they weren’t a problem at law. They were a blind spot, and that’s because we don’t actually keep any record of individual agreements. So when the members on the other side are talking about these things, they talk through a hole in their head, and when the officials are talking about these things, they do the same, because they simply do not have the information before them about what the problems are in this country. We like to talk about productivity, and we like to make up stories about these things, but we will never get to the heart of the problem until we have really good data.

Now, the reason that I support this bill is because we have a real problem with saving in this country. What this bill was was originally a part of the law around KiwiSaver, and it made sure that people didn’t discriminate against somebody and make terms and conditions better if people weren’t in the scheme. It was there, and it got taken out, and Tracey McLellan has looked at the situation, and she’s putting it back in. Now, I don’t know if she has experienced this problem, but I suspect that she’s seen it happen, and the reason that we will have seen it happen is because we’ve seen one or three or a dozen situations, but what we won’t know is the quantum of the situation. When I hear the Government members talk about how there’s no problem, how could they possibly know? How could they possibly know?

When I hear the lack of understanding of the pressure that is in the beginning of an employment relationship, I worry too, because it may be that those members have been privileged enough that they have never been in a situation where they have wanted a job and signed on the dotted line. But I have seen that thousands of times, where people have signed on the dotted line because they need the work, and those are our hard-working New Zealanders. Those are the people we need to help, and do you know what? Something like this, and leaving this gap, just makes it that little bit harder. It makes it harder for people who haven’t got enough savings, and guess who ends up paying for that?

First of all, it’s the individual. It’s demoralising. I heard the gentleman on the other side talk about how we work hard and we stay longer, and it all comes right—well, it doesn’t. If you’re actually not watching and being careful about terms and conditions, it doesn’t. People actually fall into the hole, and who has to pick them up at 65 or 70, when they stop working in their job as a cleaner? The taxpayer does. The businesses will not pick up these people, because, tonight, the Government members will vote against this bill, but, actually, the taxpayer will end up paying for these people because they will have to top that up, and that’s in the society that I hope we have, one where we have a safety net. If you get rid of the safety net—as some of the parties in this House want to do—then we won’t have that, either. People will fall through the cracks, and they will end up sleeping in their cars.

We already have a whole lot of old people who cannot afford to buy a house. Most people in this House actually do own a house. We’re in a privileged position. We have made it that little bit harder for hard-working New Zealanders tonight if we vote against this bill, and what Dr McLellan was doing was trying to plug a small gap in the system. She was trying to address discrimination that is out there—and, yes, we don’t know how many people. But we don’t know it, because of our own failure—our own failure to gather the information that we sorely need if we are going to make evidential decisions in this House. If I hear one more banal anecdote about how you can just work hard in this country and it will be just fine, I would ask you, please, to question those anecdotes.

We have the privilege of being in a House where we get to make decisions for other people whose experiences we do not share, and, at the very least, we should be keeping our eyes and ears open. At least we should be moving beyond our own prejudice, and the first thing we need to do is actually consider the reality of people in those situations. Instead of imagining that you’re the employer in that situation, try imagining that you are the employee—not the winners and the losers, and you happen to be the winners in this situation. But try thinking about what happens, because it’s going to happen around you. The people in this House will have their children affected, and they will also have their parents affected. We will end up with parents who have got no savings, and we’ve got to help them through, and we will end up with our cousins and our kids in a situation where we have not put in place the right mechanisms for them to be able to save.

Now, you’ve heard the very good history of this bill from the Hon Dr Deborah Russell. The House heard tonight about the actual realities of putting that legislation in place, which is what Dr Cullen did. That is something that this country has never regretted. That is something that, now, we all in this House pretty much agree, I think, was the right thing to do. But it cannot be eroded, and it needs to be improved, because we still aren’t saving enough, and, actually, we should take account when we look at little bills like this.

We should be thinking about things that the Retirement Commissioner says we’re a long way behind in. I mean, I wonder how many people in this country understand that when it comes to superannuation, really, in their KiwiSaver, they need a million dollars. How many people understand that in this country, and how much harder have we made it tonight for people who need that kind of cushioning, when we take away just that little thing which says that, actually, you shouldn’t be treated worse because you’ve joined this scheme—you shouldn’t get less. There shouldn’t be workarounds, but that’s what we’ll be doing tonight when we vote down this bill. We’re making it that little bit harder.

If this House thinks that it is about looking after working people—and I think that we do all probably share that—then we really need to get a grip on what our reality is and what the reality of people is. One thing is a power dynamic. Another thing is that it will come back and haunt us as taxpayers, it will come back and haunt us as relatives, and it may even come back and haunt us because we’re the unlucky ones who haven’t got the savings when it comes to retirement, because things go down.

That’s my plea to this House. I urge members in this House to consider the reality of bills like this and to not talk about things as solutions looking for problems, or whatever it is—some banal comment—to cover up the fact that they haven’t read the bill and they don’t know what it’s about. That is not good enough.

We have got a standard we have to reach here, which is that we need to understand the evidence, and if we don’t understand the evidence, we need to understand where the gaps in our understanding come from. One of the things that I think is a lesson out of bills like this and out of the advice given is that we need much better data than we’ve got. We need to start to gather individual agreements so that we can see what people are putting in contracts. We need to start to audit things like this and see where the problems are, and, actually, we will just not do that by way of anecdotes which always play out to our own preconceptions and prejudices.

That’s what I would urge this House to do tonight—to really consider it. I’m sorry, but it seems that Dr McLellan’s bill will not pass. I congratulate her on putting it in and thinking about people who are on the edge there, who need to be helped and need to be supported when they’re discriminated against in their employment because they’ve joined a KiwiSaver system.

I am standing before you today to voice my opposition and say that I do not support the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. Now, while part of this bill may sound like it has good intentions, as mentioned by several previous members across the House, this legislation in my opinion—when I read through it, when I listened in to the submissions, when I heard actually directly from the member who proposed the bill, Dr Tracey McLellan—is actually trying to solve a problem by looking for a problem to try to solve. Now, that already got me lost. When I was looking at it—what is the problem that we are trying to solve here, and where is the data and the evidence that can be put before us?

For example, sitting in the Finance and Expenditure Committee with my good colleagues, the MP for Tukituki, Catherine Wedd, asked that question: show us some examples—show us some examples. “What do you mean?”—you know, “Remove those personal names and give us some concrete examples so that we can understand; we actually want to understand the problem so that we understand what it is that we are trying to do. Where is the evidence for it? Where’s the data for it, and then what is the possible solution that we can actually align on and eventually vote on?” And the answer was silence. There isn’t really something evident for us to look into.

But, OK, let’s go back to this bill that we have debated for quite some time now. It is seeking to prevent discrimination against workers who are KiwiSaver members by allowing them to raise personal grievance if they believe their employment has been adversely affected due to their KiwiSaver membership. Now, that very, very long, wordy sentence tells me it’s very subjective. Yes, I agree. Employment agreements between employers and employees are subjective, but they are also very confidential. What we are talking about here is actually asking employers who have the expertise with HR departments, HR expertise, or have the money to hire HR experts or human resource lawyers to be able to look into these employment agreements.

What we do have in New Zealand—and, actually, this brings me back to my prior life before coming into this House. I was once a finance manager and an HR manager for a company with about 30 full-time employees, and what we found is that the New Zealand Government and our official websites already provide very comprehensive, helpful, straightforward documents and processes that help many, many of our businesses in New Zealand to draft good, proper, law-abiding employment agreements. What the employers—and that is the 95 percent of businesses in New Zealand, the small, medium enterprises who actually hire less than five full-time employees in New Zealand, don’t have the time to hire, or the chance or the money to hire, an HR manager. They don’t really have the time or the money, their hard-earned money, to hire an HR lawyer to help them to go through the employment contracts. That’s why, actually, on many of our Government websites, there are templates and good processes to help them make those employment contracts.

However, when I looked at this bill, this very bill in front of us, which I was reading through—and I put on my former HR and finance manager hat—I thought this was creating so much uncertainty for me. If I wanted to hire someone or if I had the opportunity to in this very dire and challenging economic environment in New Zealand, when I put on my HR manager hat, I’d actually be hesitant because I wouldn’t know what I was getting myself into. By this, I mean I don’t know what I’d be getting myself into by signing this employment contract for a potential new employee for this company. But, then, what are the finance costs related to it? What are the potential personal grievances? What do you mean “personal grievance”? It’s so subjective.

That is very discouraging for our companies in New Zealand, and again, I have to remind everyone in this House—but also the people who are listening in and watching us on TV—that 95 percent of businesses in New Zealand have less than five full-time employees. So, for these companies and for these employers to have to feel those uncertainties, sometimes it might be actually easier if the employer just does a little bit more. When I was reading through the bill and listening to submissions, I was thinking a lot about the people and families that I know around me, and that includes a lot of the small and medium businesses that we have in the Chinese community in New Zealand. This includes my parents, who once owned a small business.

Often what happens is that instead of putting all the extra time into managing people and doing all that, they prefer to hire less people and then just pile more work on themselves. For example, I remember my dad would go out. He would leave home at about 5 a.m. in the morning so he could go out and get ready for business. But he would always be the last one to shut the doors, to turn off the lights, to come home. And he would do that, and then I asked him many times, as a younger person in the family, “ Why can’t you get more help?” Well, the problem is for him, he thought, if he can do it and there will be less trouble between the different kinds of employees, the different kinds of training, and then the different discussions and debates.

Also, coming down to, for example, when personal grievance happens, what happens to the employers of these small enterprises? Often when employers feel extremely helpless, they don’t know who to go to. The first piece of advice they probably will get is to go to speak to a lawyer. But how much would a lawyer charge? And so it is very, very discouraging. When I read through the bill and when I listen through to the submissions and when I see there is so little evidence about the actual problem that we are trying to solve, I come back to my very first question when I began my speech: what is the bill trying to address?

The other thing that I noticed when I read through this bill was that the bill also failed to consider and account for—there is more than just KiwiSaver in New Zealand. People actually have a choice about what they do for their savings, but this bill fails to account for the diverse retirement saving preferences for workers, and workers deserve to choose how they want to save and how they want to invest—such as, for example, property or personal investment portfolios or other retirement schemes. By legislating to mandate equal treatment of KiwiSaver members, we are actually inadvertently disadvantaging those who have made different financial choices, and this is something that I don’t believe some of our Kiwi workers out there would agree to.

Another unintended consequence that I noticed when I was reading through the bill was this potential of racing to the bottom in our employment terms in the negotiations. Rather than risk offering better conditions to some employees because I really see the potential in you or because I really see the capabilities and experiences that you bring in, instead of having a mindset with the employers of “I will risk offering you better conditions for this employee because I really want you to join me and help me to grow my business and help me to expand my business,” some employers, because they have been mandated to go through more red tape and because there is so much more that they need to do, might have to opt out and just make it easy, because it’s easier to follow the law, to standardise all the packages, and therefore everybody’s the same, and therefore there is no competitiveness between what we want to do.

This, overall, could result in a worse outcome and worse mindset, not only for the employees, but also for employers. In New Zealand, many, many of our businesses—and, again, coming back to what I said a bit earlier, how 95 percent of the small and medium enterprises hire less than five people in New Zealand—don’t need the extra layers of red tape, and this is why when people have the choice, they would vote for choice and vote for a Government that will cut all the red tape. We’ve also said many times now to cut all the green tape so we can unleash some potential and actually allow people to be a little bit more flexible and to allow people to take on some more risks and be OK to take on risk, to take on opportunities to grow their businesses, to grow the local economy, for example, in the beautiful areas like Tukituki and Hamilton, and to actually grow our economy overall as a whole for New Zealand.

So I really don’t commend this bill to the House, because I don’t see the problem it is trying to address and we’re just going around and around trying to identify a problem. So with that, I don’t commend this bill to the House.

There is a spare five-minute call. I call Dr Vanessa Weenink.

Thank you, Mr Speaker. I rise in opposition to the Employment Relations (Protection for Kiwisaver Members) Amendment Bill. This bill is in the name of Dr Tracey McLellan, who was the previous member for Banks Peninsula, so it gives me a little bit of pleasure to oppose this bill.

This bill provides yet another ground for personal grievance claims. Personal grievance claims have become a little bit of an industry. For some businesses, it’s actually been a form of—businesses are being conned. There was an example in Dunedin a couple of years ago where a chef would sign up at one restaurant, turn up for one shift, then claim to be not particularly well—sick, couldn’t be bothered turning up, whatever. The company would then tell him, “Well, basically, we haven’t really got an arrangement here.” Then he would say to them immediately, “Well, I’m going to take you for a personal grievance.” Then he would write a formal letter. His whole tactic was to get them to pay up $10,000, because they had to weigh up if it would be more expensive to fight the personal grievance or—

Hon Member: Pay the “Go away” money.

Dr VANESSA WEENINK: —to just pay the guy to go away. All this bill will be doing is creating yet another grounds for personal grievance cases. It’s an absolute disgrace.

This is a bill that had previously—there’d been previous changes to legislation back in 2006, which got reversed in 2008, under the last National Government. We made it possible so that there’s a lot more transparency so that employers and employees can actually have the conversation themselves to decide how they want to have that. This bill would then reverse that and make it compulsory. It is yet another example of typical Labour woolly thinking, of not understanding the consequences to businesses, and of creating yet another cost to businesses when we’re in a cost of living crisis. As one of my colleagues explained, adding costs to businesses is, ultimately, adding costs on the employees themselves, so this is just not a very sensible amendment to the Act. Some of the ideas behind it—of protecting people and wanting to make it more enticing for people to be on KiwiSaver—sound like a good idea. We don’t disagree with that, but we don’t think that this is the mechanism to do that.

Part of one of the consequences that this bill might have is disincentivising the use of total remuneration packages, which actually can be quite a useful way of discussing an employment arrangement. There is an element of perception that some people have that if there’s a total remuneration package that’s offered, somehow KiwiSaver employment contributions from the employer don’t really count, and that it’s not actually part of that. But, actually, it is still part of the total remuneration, and it is saving towards people’s retirement. It’s encouraging people to contribute towards the total amount that they have saved by the time they retire. Total remuneration packages, potentially, are a very useful mechanism.

This is just another example of impractical ideas that have been brought before this House, backed by an ideology that there is central control, that, really—

Hon Member: Command and control.

Dr VANESSA WEENINK: Command and control from above. You know, there’s no real examples of any problems that actually exist for it. It is a piece of legislation looking for a problem to solve. There isn’t one to solve. There were no examples that were able to be brought. The Finance and Expenditure Committee heard excellent submissions, but very few submissions, and the only one really in support that I could see from the papers was from the unions.

This is a bill that is really counter to everything that National believes in. We believe in free choice, and this bill will not do anything to improve that. I do not commend the bill to the House.