Disabled Persons Employment Promotion (Repeal and Related Matters) Bill

Dr PAUL HUTCHISON (National—Port Waikato) Link to this

Thank you for the opportunity to speak on this very important Disabled Persons Employment Promotion (Repeal and Related Matters) Bill. There is no doubt that this is a very important bill to the disabled community, and also to Ruth Dyson personally. I acknowledge that both the Disabled Persons Assembly and the disabled community have put considerable thought and effort into the bill—as, for that matter, has the Minister herself.

This bill is important not only to the disabled community but to their relatives, to their friends, and, of course, to the wider community. It is based on the philosophies behind the New Zealand Disability Strategy and Pathways to Inclusion, and National supports those philosophies. Where we are concerned is that this bill is being pushed through when inadequate preparation has been made for its practical application. That is of great, great concern.

The Workforce Auckland submission to the Social Services Committee stated: “Workforce Auckland has consistently supported the repeal of the DPEP Act to the extent that some opponents of the repeal have accused us of trying to rush through the repeal.” It went on to state what is absolutely important about this bill, which is the reason why National is opposing it at this stage: “We are concerned about the failure to work through the practical arrangements to replace the DPEP Act and the lack of consultation.” I understand there has been some considerable consultation since, but there certainly have not been adequate, practical arrangements to ensure the smooth transition of this bill.

In fact, I had a call from the chief executive officer of Workforce Auckland, Joy Ottaway, only tonight. She said the Department of Labour came on site yesterday and said there was a change in the policy guidelines coming up but it did not know when the change was coming up. Clearly, that is of huge concern for New Zealand’s largest sheltered workshop, where 170 disabled people are very gainfully employed. In fact, I might say that, having visited Workforce Auckland, one can be nothing but inspired by the tremendous activity that goes on there and by the satisfaction the disabled people get through having the choice of being employed there.

Workforce Auckland also asked whether it would get any extra support to see in the practical application of this bill. Apparently, the ministry said Gordon Pryde had asked Mrs Dyson for more money but that it would not hear about it until April. How can a large organisation like Workforce Auckland, which has 170 disabled people working there, plan ahead when it does not know about the policy guidelines just a few months before the bill is due to be enacted, let alone whether it will be adequately compensated? Apparently, someone asked about the single core benefit that has been promised for the last few years by this Labour Government. The ministry did not know about that. That is yet another reason, a practical reason, why it will be so difficult to implement the transition clauses to this bill.

Apparently, someone else asked the ministry whether it could guarantee that disabled people would be no worse off, and the ministry said it could not guarantee that. That is of great concern. It is for that reason that I have put in a Supplementary Order Paper. The very sincere amendment will ensure that there will be a much smoother transition when the time is right. Basically, this amendment requires the enactment of the bill to be extended from 30 June 2007 until 2009. But it gives the Government a chance. It states: “… 30 June 2009, or the time by which the Government has defined the taxation/benefit arrangements so that no disabled workers are adversely affected fiscally from their current status, nor are employers fiscally disadvantaged, whichever is the sooner.” I put it to members that only yesterday we had first-hand information from the largest sheltered workshop that clearly the ministry has not put in place a practical transition for this bill. That is why this amendment is so important.

I had very much hoped that the Māori Party and United Future would support this amendment. I understand that New Zealand First is supporting it, and I am delighted that it is. It was New Zealand First, United Future, and ACT members who expressed reservations around compliance costs and the practical implementation of this bill. Hopefully, we will get from the Minister in the chair, Ruth Dyson, some explanation as to why the ministry and the Minister are so inadequately prepared. The Government has not sorted out or defined the taxation and benefit arrangements or employer support measures; it just has not done that at this stage.

As I say, the implications for disabled people are extremely serious. Many of the sheltered workshops are saying that their viability will be seriously threatened once the exemption from minimum wages is removed. Some disabled employees may lose their jobs and some may be worse off due to the attrition of their benefits through high effective marginal tax rates. In my view, it is negligent that the Labour Government and the Minister have not sorted this out. National remains opposed to this bill in its present form and regards the amendment that I have put out as essential to the interests of both disabled people and employers. Obviously, it would be ideal for all people with disabilities to be able to gain work in open employment, where practical, but sheltered workshops provide an atmosphere that many people with disabilities and their families value enormously. That choice is very, very important, and it is very, very important that when this bill is eventually implemented there is a smooth transition that does not adversely affect disabled employees who so much enjoy their jobs.

There is no doubt that the choice available to disabled people through sheltered workshops is one of huge import. As Peter Fraher from the Abilities Group on the North Shore said, disabled people go there by choice. They go early for work. They often stay late for work. Some of them even go in the weekends. After the holiday period, some were actually lining up very early in the morning because they were so looking forward to going back. This Government is prematurely making it extremely difficult for workshops such as Abilities Group on the North Shore to be able to operate. In fact, the workshop is saying it may have to close unless sensible, practical provisions are made by this Labour Government.

So I ask the Minister to take a call and hopefully detail some of the things she is putting in place. I understand that $4 million was allotted in 2002 to help the transition, but that almost entirely went on the community participation scheme. One of the disabled people from the North Shore said about the community participation scheme replacing work: “It’s a waste of money.” I would not agree with that entirely because it has been a mixed experience.

Hon RUTH DYSON (Minister for Disability Issues) Link to this

I thank the member who has just resumed his seat, Dr Paul Hutchison, for his contribution. It has been an interesting debate over the last 5½ years. I am very interested to address, first of all, the member’s Supplementary Order Paper. He is requesting that members support a move to delay the implementation of the repeal of the Disabled Persons Employment Promotion Act.

I want to contrast him with his “cheer man”—that is what he has been doing this evening—Simon Power. He spoke in this very same debate on 26 May 2004; we could hardly be accused of ramming this legislation through without adequate consideration. Simon Power said on 26 May 2004: “It lacks conviction because … [it has] a long-drawn-out period before coming into full force, so indeed does this bill create a transition period until 2007.” The member went on to accuse me of lacking conviction in implementing a move towards an inclusive society, despite his supporting the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill. He said: “she should crack on and get this legislation with a commencement date that reflects the courage of that conviction.” Well, good on Simon Power. That was a very commendable speech, and it is a shame that Dr Hutchison did not read his colleague’s comments before he moved his Supplementary Order Paper.

I do not think that any legislation before this Committee for which I have been responsible as Minister has been subject to more misinformation and scaremongering. I exclude the member who has just resumed his seat from that because I do not believe he has been part of it, in the main, but some of his colleagues and members who, fortunately, have left Parliament since then were. Some of the scaremongering has been genuine and political—an attempt at point-scoring at the expense of people who I consider worthy of better treatment—and some of it has been based on a lack of information. I hope that, through the Committee stage, we can place some of those facts on the record and give the reassurance that people in sheltered workshops, their families, and providers are seeking.

First, I will talk about the number of people who are currently in sheltered workshops and the current legislative regime under which the workshops operate. About 3,000 people are currently in the many, many sheltered workshops around our country. About two-thirds of those people will not be affected by this legislation because they are not classified as being in work—they are not working in any sense of employment or in an employment relationship. They are doing either what is now called, as the member who resumed his seat referred to, community participation—what we used to call day activities—or some sort of training. So about 1,000 people are categorised as being in what we would call employment. Currently, those 1,000 people, because they are in a sheltered workshop, have no right to any minimum wage, sick leave, holiday pay, or basic employment rights at all, regardless of the quality and quantity of work they do. That is—and no other word is appropriate—wrong.

It is just wrong to have a blanket exemption without any regard for the work a person does. It is not acceptable. It was not acceptable in 2001, when I announced this policy—on the day the World Trade Center in New York was hit —it was not appropriate in 2004, and it is no more appropriate now. Instead of saying that, therefore, the blanket exemption would be removed entirely and that we hoped the market would just work it out, I said that that was not an appropriate response to what was clearly a changing labour market and to what was, for many people who have been in sheltered workshops for a long time, a significant change. I said we would not remove the blanket exemption and have no exemptions, although that has been actively proposed by many, including some in this Chamber. I said that people would now have an individual assessment of their capacity to work, and that on that basis they would be entitled to apply for an exemption to the minimum wage. In my view, that is a fair and pragmatic way of moving the sector forward—and it certainly has moved forward.

Ten years ago, when I started working with the vocational services sector on this policy, the sector was, frankly, very fragile. It was very poorly funded, quite poorly managed, and, in many instances, quite poorly governed. People worked in substandard environments and there were no resources for training or for advancing their capability. We have put very good money into the sector, and we can see the results. We can see the results of support for infrastructure. Some workshops are in new buildings, some have had their buildings altered to make them more appropriate, and some have moved into new facilities. I have been recently to two workshops in Canterbury that have moved premises, and they are now very impressive. Nearly all workshops have had staff training, including management training, and a large number have had governance support and assistance.

So ensuring that the sector itself is robust and strong has been an important part of this. The sector has received additional funding for its direct contracts and for its workshops, as well. Many have seen the face of the future, looked at the aspirations and ambitions of their clients, and said that they need to change, not just to take account of the changing aspirations but to take account of the changing labour market. Many people have moved from what were quite repetitious, not very stimulating day activities into either community participation or supported employment. We now have three times the number of disabled people in supported employment than we had 5 years ago, and that is a very significant move forward.

So in my view this is not just a fair approach but a pragmatic one to dealing with the changing aspirations, and therefore with the changing responsibility of central government to support disabled people in our workplace. If people are doing a job, the very minimum this Parliament should offer them is minimum wages and conditions protections. We have taken the pragmatic approach to individual exemptions in this case, and many people will still be entitled to continue.

The final point I make in this part of the debate is to correct the factual inaccuracies that I am sure were unintentionally demonstrated by Dr Hutchison in his contribution. He said that people in sheltered workshops who received minimum wages would be worse off financially than they would have been. That is not correct. At the conclusion of the debate on this part, I will seek leave to table a graph that shows hours of work, rate of pay, net wage, net benefit, and the comparable income for people earning wages. People would be better off financially under any regime than they currently are by being on a benefit. Thank you, Mr Chairman.

SANDRA GOUDIE (National—Coromandel) Link to this

I really think that the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill could probably at this stage be called the “Disabled Persons Unemployment Promotion (Repeal and Related Matters) Bill”. I say that because that is likely to be one of the outcomes when this bill is passed. The Minister, Ruth Dyson, constantly refuses to recognise that there was no adequate consultation over this bill and that nothing was done to really ascertain how this bill will affect the people it applies to and to protect them so that they have a job to go to.

A number of work providers have said quite clearly that they will not be able to employ all of the people they are currently looking after within their working environments. Those working environments are not just businesses—they are much, much more than that. They care for those people. They help them with their budgets, with their medications, and with anything they need in terms of their health, personal care, accommodation, and contact with family and friends. They provide a friendly, caring environment. They provide social interaction with people, and provide social activities, as well. Some of those people will be denied that because those work providers will not be able to afford to employ them. So this will be the “Disabled Persons (Unemployment Promotion) Bill”. Let us make no mistake about it; that will happen.

The reason the Green Party supports this bill is that it believes that people with disabilities should have the same employment and work conditions as other employees. The problem is that those people have to have a job in the first place. Right now they are on a benefit, yes, but that benefit is supplemented because they go to a work environment where they feel valued. They feel that they are working and contributing. Now there is every likelihood that a number of those people will have that opportunity taken away from them. All of the other services, which are not paid for by this Government—the services that people in our voluntary sector and in the workplaces that assist people with disabilities provided free of charge—are provided because the work providers care about those people and they want to do that.

What will happen? “Stan the man” will go along to somewhere like Workforce Industries or the Abilities Group in Auckland, and he will be told the organisation is sorry, but the bill has gone through, so it has to pay all of the people minimum wages, but it cannot afford to do that. So those providers will have to say to people like Stan: “I am sorry, Stan, you can’t come on Monday. Sorry mate.” They will have difficulty even explaining that to him. He will ask: “Why can’t I come on Monday? What is it that’s stopping me coming on Monday?”, and the provider will have to say: “Well, I’m sorry, but we just can’t afford to pay the minimum wage.” He will say: “But why can’t you? I’ve been coming all these years; why can’t I keep coming?”. How will people like Stan understand what this is all about? Where will they get the care they have been experiencing? What about the relationships they have built up and the support they have been getting with their budgets, with their health, and with everything else—even personal care? Those providers will not be able to afford to provide those extra services along with trying to maintain a business while having to pay the minimum wage to employees in their workforce.

That issue is at the heart of our opposition to this bill. If we thought that everybody would be looked after and would continue to have a quality of life and feel valued, then that would be fine. But that will not happen, because the consultation has not been undertaken that should have been. Workforce Industries supports the repeal of the legislation. It is a great employer, as my most excellent colleague Dr Paul Hutchison said. It looks after 170 people in its workforce environment. It supports this bill, but it has also clearly said that the issues have not been worked through and the people and their families who will be directly affected have not been adequately consulted. They have not been given the assurances or the outcomes they have sought from the Minister in the chair, the Hon Ruth Dyson. The Minister has failed to provide those assurances to a huge number of the 3,000 people who she purports to be in this sector.

STEVE CHADWICK (Labour—Rotorua) Link to this

What a strange perspective we have heard from the Opposition. I believe that we are both coming to this bill trying to make things better for people with a disability, but I suppose Labour’s policy was worked up during the 1990s when we saw such an oppressive and paternalistic approach to people with a disability. We went out with a document called Pathways to Inclusion in which people with a disability themselves stated they wanted services that helped them to get into real work. That is why we are proudly in this Chamber with a Minister for Disability Issues presenting this bill in the Committee stage today. It has hardly been rushed through; it has hardly been imposed on the sector, as the member opposite said.

One has to wonder at the Supplementary Order Paper from Dr Hutchison. He does have a genuine heart in relation to this sector, but his Supplementary Order Paper is patronising. National members say that they do not want any people with a disability to be adversely affected fiscally from their current status. But I believe that National members are really concerned about employers being fiscally disadvantaged by having to comply with the minimum wage and annual leave requirements, and all the other requirements and protections that the Employment Relations Act will give these people, too. These people are not helpless and unable to see and have a heart and a hope for their own future. They spoke up loudly in Pathways to Inclusion, which was about consultation, and they said: “We have the right to”—

PETER BROWN (Deputy Leader—NZ First) Link to this

Let me make it quite clear from the onset that when this bill had it first reading in May 2004 New Zealand First supported it to select committee. I have here the actual Hansard of that debate, and I represented New Zealand First at that time. Let me read a little bit of it, because I want to explain our position as fully as I may. “Let me say from the onset that New Zealand First will be supporting this bill. I like the way the Hon Ruth Dyson outlined it: we believe that it is better to pay people according to the work they do rather than their place of employment.”—I think those members over there are in agreement with that, thus far, from listening to them.—“I like that phrase, and I thought it summarised the situation exceedingly well.”

Now we are debating Part 1 of this bill, and let me just remind the Committee and anyone who might be listening tonight, about the purpose clause, which states: “The purpose of this Act is to—(a) repeal the Disabled Persons Employment Promotion Act 1960; and (b) provide for matters arising from the repeal of the Act until the expiry of the transitional period on 30 June 2007; and (c) make related amendments to the Minimum Wage Act 1983.” We had a member on the Social Services Committee last term who is no longer a member of Parliament. Unfortunately we cannot get hold of him to get some clarification, but we notice from the select committee report back the following: “Concerns were raised that the financial implications of the repeal of the Disabled Persons Employment Promotion Act will force sheltered workshops to close or move to providing other vocational services.”

All the correspondence we had—certainly all I had—on this bill told New Zealand First not to support it. However, we have a conscience, and we are trying our best to work through this as honestly as we can. We read in the explanatory note of the bill the following: “Most people in sheltered workshops receive an average of $17 pay per week.” That is not good enough by anybody’s standard. The question we are asking ourselves in New Zealand First—

CHESTER BORROWS (National—Whanganui) Link to this

I rise to speak against the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill as it is at the moment. It is no surprise to me to find that this bill is promoted by the Labour Party. Labour members pat everyone on the head and they tell us that we are the patronising ones—the paternalistic ones. Yet they are the ones who are deciding what is best for people who are currently working within the sheltered workshops system. They will decide what is best for us and they will make that decision, no matter what we say. They will not bother consulting with anybody. They will not bother talking to parents or to the people who are involved in working away day to day with their loved ones, their children, who attend these workshops. They will not bother to listen even to them, but they will make a decision in any event.

The people who administer the schemes are worried sick about how this legislation will affect them. One of the things they have to do is to assess what part of a full unit the particular person they are assessing is, from a productivity point of view. For instance, if a person is assessed as being one-tenth of a full unit, then he or she will get one-tenth of the minimum wage. Some of these people will get somewhere between $1.25 and $2.50 an hour.

It is interesting to read an extract from the New Zealand Herald on 10 February, where Mr Jones, the Chief Executive Officer of IHC New Zealand, as I understand it, obviously believes he is selling his soul on this one. When he was held to account by a Mrs Armstrong from Nelson, who was worried about the situation in respect of her family, his response was: “Has the IHC become too PC in some areas? Yes, by being a service provider we have bought into the government expectation, standards and policies. The $140 million”—those are the 2005 figures that the Government was funding to IHC—“comes with a cost.” And the cost is that one has to swallow a rat.

Well, the people around this place have been swallowing a few rats lately, and will continue to do so, especially as we look forward to the consideration of the anti-smacking bill. But they have looked for some sort of help from the Minister as to how things would go—some sort of assurance that things were going to go really well. The Minister is quoted as saying: “If I wanted the sheltered workshops closed I would’ve closed them. But I don’t. We’ve put substantially more money into them.” That is what she is saying, but let us see the proof of it.

She goes on to say that workshops must absorb the cost of at least the first round of payments, and that the workshops cannot be funded for salary increases. And then she is quoted as saying: “I can see their problem … But I don’t think it is going to be a problem. I can offer no more assurance than that.” Well, whoop-de-doo! The people working in the sector are saying: “You’re not here day by day.”