Minimum Wage (New Entrants) Amendment Bill

The CHAIRPERSON (Hon Clem Simich) Link to this

The bill is to be debated clause by clause. Members must stick to the subject matter of those clauses.

KATE WILKINSON (National) Link to this

Thank you, Mr Chairperson, for allowing me to take the first call in the Committee stage of the Minimum Wage (New Entrants) Amendment Bill. I appreciate that we are debating the bill on a clause by clause basis, and the first clause, of course, reflects that the name of the Act will be the Minimum Wage (New Entrants) Amendment Act. The term “new entrants” was certainly debated during the select committee hearing, as it was thought that it might not necessarily reflect that we are dealing with young workers in the workplace. However, that is the terminology that has been accepted.

I say from the outset that we do think this bill is well intentioned. We think it is an attempt to avoid the exploitation and discrimination—

DARIEN FENTON (Labour) Link to this

It is a pleasure to take a call in the Committee stage of the Minimum Wage (New Entrants) Amendment Bill. The majority of the Transport and Industrial Relations Committee recommended that clause 1, the title clause of the original bill, be changed to Minimum Wage (New Entrants) Amendment Bill.

It is worth thinking about who new entrants are. Members of the select committee, of whom I am one, met many of them and it was a great privilege to hear from those young workers. I was certainly very, very impressed with them. They are workers who work in hospitality, retail, and so on, and they are the workers who will be affected by this new entrants provision.

Dr PITA SHARPLES (Co-Leader—Māori Party) Link to this

Tēnā koe, Madam Chairperson. I would like to speak to the title. The original title was the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, and I think it should have stayed like that because that describes what the bill does and does not do. In fact, a good title would be the “Minimum Wage (Age Discrimination) Amendment Bill”, because that is exactly what it does. One wants the title to say what the bill actually does. This is no different from Dr Wayne Mapp’s 90-day probationary period legislation, which we did not support. This is the same thing.

The title is wrong. New entrants could be 20-year-olds or they could be 50-year-olds entering into the workforce or into a particular job, so having the words “New Entrants” in the title does not really encapsulate the idea of someone of that age, but rather the idea of someone entering the workforce. If one goes shearing, then one can be a new entrant into shearing at any age. Certainly as a rousie or a presser, one can learn in 2 days what one is required to do, and go straight into that sort of mahi. Furthermore, with the age structure the way it is, many Māori fall into that category of youth. So as we multiply, as we are doing, we will come under this legislation.

I was really excited when Sue Bradford brought this bill forward, because it was Māori Party policy right from the very beginning to remove that discrimination. But the bill does not remove the discrimination at all; it just changes the name. Therefore, the title Minimum Wage (New Entrants) Amendment Bill is the wrong name, and it should be left as “Minimum Wage (Age Discrimination) Amendment Bill”, because that is what it does. Kia ora.

Dr WAYNE MAPP (National—North Shore) Link to this

I will be taking a couple of calls on the bill. I appreciate that this debate is about the title, and the substance of the bill is really contained in clause 4. My next speech will be focused around that.

It is extraordinary, is it not? We had the bill starting off as the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, and it was a complete abolition of age discrimination for 16 and 17-year-olds. The promoter of the bill, Sue Bradford, was very proud of that fact; that she was standing up for the rights of the oppressed youth throughout the nation. National opposed that abolition. We saw the age period, 16 and 17, as quite a short period and, in fact, we think the bill provides some perverse incentives basically to encourage youngsters to leave school earlier than they might otherwise do.

We now have a change to “New Entrants”, which is actually misleading. I would have to agree with the previous speaker, Dr Pita Sharples, that it is misleading. The whole point of the bill still, if one reads clause 4, is about 16 and 17-year-olds, whereas in fact it is a pretence that it is only new entrants. I also note the point that Dr Sharples was making about the 90-day legislation, which he supported, and in which I had made amendments to make it easier for the Māori Party to support in the long run. They know that. They were given plenty of notice on that.

SUE MORONEY (Labour) Link to this

I take the opportunity to speak in the Committee stage on clause 1, the title clause, of the Minimum Wage (New Entrants) Amendment Bill. The title was the subject of some change at the Transport and Industrial Relations Committee, and I was pleased to be a member of that select committee. The title of the bill is one of the things that the committee made an amendment to, and a fact that many other speakers have alluded to.

I want to talk about some of the reasons behind that change to the title. I differ from the previous speaker in that I believe that the New Zealand public understands exactly what the phrase “new entrants” means. It is the perfect description of what this bill does. The term describes people who are newly entered into the workplace in New Zealand. It is a very common term that we use for children entering the school system. We do not for example say, when someone is in year 7 and changes schools, that that child is a new entrant. No, we do not say that. We say that new entrants are those who are new to the education system. They are newly learning the processes and structures involved in the education system. So the concept of a new entrant is one that is well understood in the New Zealand environment, and is very appropriate to use for what this bill does.

At the select committee we did not talk just about people who are new to a particular work environment, because that would be discriminatory. People change jobs all the time and become new to the work environment, but that is not what we are talking about in this bill. In this bill we are referring to those people who are having the experience of paid employment for the first time in their working lives.

I am sure that many members in this Chamber can still reflect for themselves on what it felt like to be a new entrant into the workforce. Certainly, for myself as a new entrant, it was a bit of a shock to the system. My first job on leaving school was working in horse racing stables, and that entailed getting up at 4 o’clock in the morning. It felt very much like a completely different scenario from getting up at 8 o’clock in the morning, preparing my school lunch, getting on the school bus, going to school, and really being the recipient of information coming towards me.

Obviously, when people move into paid employment, they are not the passive recipients of information coming towards them; they are often required to be producing, and to be producing every hour of their working day. That is quite a shift, and quite an adjustment, that new entrants into the work environment need to make.

So I support the title that the select committee came up with: the Minimum Wage (New Entrants) Amendment Bill. We could have called it the “Minimum Wage (Put our Money Where our Mouth is When it Comes to Low Pay) Amendment Bill” also, because I think that that is one of the things that this bill does. Those parties that will be supporting this bill can proudly stand up and say: “Yes, when it comes to low pay we are prepared to do something practical and something real to deal with low pay; it is not just a bumper slogan that we reel out during an election year.” In conclusion, I tell the Committee that I support clause 1, the title: the Minimum Wage (New Entrants) Amendment Bill.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this

The name of this bill is a shame—the “New Entrants Bill”. Sue Moroney has just talked about new entrants going to school. There is a difference, I tell her—we do not pay 5-year-olds to go to school. There is a big difference. We are talking about people going into the workforce here.

The original bill was called the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, but we will not be able to call the bill by that name any longer, because this bill will maintain discrimination against those people who are young. It has this new, fancy kind of title because it continues to discriminate. I am ashamed to listen to these so-called tough unionists talking about workers’ rights, etc., etc., when they are shafting the next generation of workers. They are from the party that talks about the working class—but let me take this back to the title of the bill.

The Māori Party would like to call this bill the “Abolition of Age Discrimination Bill”, because we are a tough, unionised, working class - type party. However, in this bill we are about to reaffirm discrimination against young people, so we cannot call it that.

DAVE HEREORA (Labour) Link to this

I take this opportunity to take a short call in this Committee stage, in relation to the Minimum Wage (New Entrants) Amendment Bill, and the fact that we are talking at this stage about the title of the bill. If we are to consider the title and how it should reflect the substantive matter of the bill, then I think that the title is appropriate.

I disagree with the previous speaker from the Northern Territory that it in fact does represent—

KATE WILKINSON (National) Link to this

This is the purpose clause of the Minimum Wage (New Entrants) Amendment Bill, but it obviously also includes certain criteria, and, whilst not straying from talking about clause 3, that naturally means I will have to also talk about the criteria. The purpose of the legislation is to amend the principal Act, which, as we know, is the Minimum Wage Act, to expressly provide for a minimum rate of wages to be prescribed for new entrants, being workers who are 16 or 17 years of age and who meet certain criteria. This is not a huge bill, but the criteria, I think, are very important.

The criteria include such items as the length of employment, whether that employment has been with one or more employers, and the position held by the worker. That basically says it all. Nothing about how many hours of work is mentioned in the bill’s criteria, although the commentary on the bill suggests a figure of 200 hours of employment on or after an employee’s 16th birthday, unless that 16 or 17-year-old is employed in a supervisory position. The minimum rate, as I think has been mentioned, is set at 80 percent of the adult minimum wage.

I state from the outset in relation to this purpose—and I restate—that we believe that all workers, whatever their age, should be valued for the work they perform. No worker should be exploited because of age or for any other reason. But we are concerned about the criteria—and we share the concern of some of the submitters—that this bill will only raise the cost of hiring young workers. It will not actually increase their productivity, and, as I tried to mention in my address in relation to the title, it may have an adverse effect on the employment and training of young workers. It may be a barrier to them entering the workforce and it may, indeed, tempt or encourage them to leave school and forgo their education or trade skill training for a job that is paid at, or above, the adult minimum wage.

I say in relation to the criteria that I see no reason at all why a 16-year-old would not be paid at the same, or similar, rate to a 19-year-old, a 25-year-old, or, for that matter, a 40-year-old if he or she does the same work and makes the same contribution. But, as one submitter said: “Younger people tend to be paid at a lower rate than older workers because age is a proxy for experience and performance on the job, just as the age of 15 is a proxy for the minimum capacity and maturity required to drive a car on our roads.” Legislation like this, whatever its purpose, cannot change overnight the amount of experience and performance capabilities of any worker, whatever his or her age.

To paraphrase a useful quote—and again, it is in relation to the purpose—”What good does it do a young person to know that an employer must pay him or her the adult minimum wage if the fact that he or she must be paid that amount is what keeps him or her from getting a job.” I think that sums up a lot of our worries and concerns about this bill and its purpose, that it will indeed be a barrier and not help the employment of young people.

PAULA BENNETT (National) Link to this

The National Party was quite struck that the purpose of the bill is to amend the Minimum Wage Act 1983 to end age discrimination in employment by removing the ability of the Governor-General to set, by Order in Council, minimum wage rates defined by reference to the age of workers, amongst other things. I would be quite keen to hear the matter discussed in more detail, if the honourable member Sue Bradford would like to take a call.

The National Party has huge concerns about the ending of age discrimination in respect of young people in smaller towns. I heard some of the submissions and arguments made about places like fast-food restaurants in small towns where people are working next to each other, doing the same job, but are paid differently because they are different ages. To be honest, some of what they said made sense, and when we heard from the young people themselves we were moved by their stories and agreed they were doing exactly the same job.

The concern I have has also been expressed by other members on this side of the Chamber when we have discussed this bill at length. We have not made our decision lightly, because it affects young people. Obviously, in the National Party we agree that people should be paid what they are worth. There is no question about that.

We could give the example of Levin, a small place that has mechanics, hairdressers, small businesses, and small retailers. They often take on someone from school to give that person a go. Those businesses do not have much money, or much fat. They do not take on that young person to make the business some money, or even really for that person to have a huge input into the business at that time, but they see the benefit for the longer term of taking on that person. The businesses may be strapped for cash and not making a lot, but by paying the minimum wage rate, they can take on a young person.

For example, I have a dear friend in Taupō who owns a hair salon. She takes on someone from school, on late nights on Thursdays and Saturday mornings. She said that, to be honest, the young person sweeps a few floors and does not really do much, but it gives that young person a taste for the industry. It takes a huge commitment to train as a hairdresser. Trainee hairdressers work for a long time for only a little money, in the hope that the qualification will lead to something worthwhile. My friend said that it is a huge commitment to undertake.

The purpose of the bill is to remove age discrimination. The National Party has huge concerns that the bill actually discriminates against young people, because small businesses in smaller towns cannot afford to give young people a go if they have to pay them adult rates. Those young people will end up in jobs in bigger places, in supermarkets and so on, and although there is nothing wrong with that, it does not give them a taste of what they are hoping their future career might be.

We heard another good example of a veterinarian who takes on young people—and I raise this in terms of the purpose of the bill, to cut out age discrimination. That veterinarian takes on young people, after school, but can afford to pay only the minimum wage. The veterinarian cannot afford to pay them more than the minimum wage and does not want to pay them nothing, so takes them on at the minimum wage. A young person in that situation is rapt, quite frankly. The person is getting a go, and having an opportunity that would not arise otherwise.

These small businesses said that they knew the worth of what they are doing for young people. I wonder whether the bill has been as well-thought-out as it could have been in that respect.

I say to the member in the chair, Sue Bradford, that we understand some of the bigger problems, and perhaps why she has brought in the bill. We do not always agree with other members, but that is the nature of this place, and that is OK. We can argue about it. But I do have huge concerns about whether those smaller areas have been thought about—areas where there are not as many employment opportunities for those young people. Those small businesses are almost doing a community service by taking on these people. They are quite open about the fact they cannot afford to pay anything more than the minimum wage, but they know it may help those young people with career opportunities later on. That is really important.

I have personally had people write to me, and National has had many people meet with us. They range from veterinarians, to hairdressers, mechanics, panel beaters, and many others. Kids working for these businesses are looking for a bit of a break and a taste of the work, so they can see whether that area suits them.

SUE BRADFORD (Green) Link to this

The member from National Paula Bennett has inspired me to speak because, first of all, I would like to respond to her comments. Young people in smaller towns, if not older people, are actually worth the same for the job they do, wherever they happen to live in the country, unless one is proposing a policy that says we should discriminate in wages on the basis of where one lives, which I would find an extremely odd policy. I would also point out that a number of programmes for young people to gain work experience are available, I believe, in smaller towns as well as in cities, such as Modern Apprenticeships and work placement programmes from schools. This bill does not tamper with the training wage, either, which is still available. So I really do not think that the problem the member speaks about is a real one.

I would also call the member’s attention to an agreement that was signed yesterday between Progressive Enterprises and the Northern Distribution Union—it was very happily supported by that employer last night and today; a progressive employer indeed—where that employer has agreed to take everything a step further than this bill goes. All its young workers will be paid from when the agreement kicks in, after the first 200 hours, or the first 3 months on the job, whichever comes first. Workers for Progressive Enterprises supermarkets will hit the full adult wage after 200 hours, or 3 months, and that will happen not only for 16 and 17-year-old workers but also for 15-year-old workers. I am hoping that other supermarket chains and retailers will follow that company’s example.

Further to the purpose of the bill overall, my original purpose was to remove fully discrimination on the basis of age for 16 and 17-year-old workers. That has not been completely achieved by the bill as amended, and I will talk about that a bit more when we come to the debate on the next clause. But in terms of the main purpose of the bill, it is simply unfair that the wages should be different for people doing exactly the same job.

The previous speaker said that the Transport and Industrial Relations Committee received plenty of submissions and could see that these young workers are doing the same job as older workers. In fact, in a number of cases they are supervising and training older workers, which is almost the grossest injustice of all. Particularly in places like the fast-food industry and in some retail outlets, the young workers have sometimes been on the job for 3 years. They are still 16 or 17; they are put in the position of training and supervising older workers. There could not be anything less just than expecting those workers to continue to receive the minimum wage at over $2 an hour less than what the people they are training are receiving. The work is the same, the employer’s expectation is the same, and the job description is the same.

The other thing that is the same is the cost of food, clothing, and transport. That does not change because one is 16 or 17, either. It does not matter what part of the country one is in; it is a myth that the wages young people earn are not for “real things”. Often these young people are helping to support their families. As we know, wages are too low in this country anyway, and some families are on benefits. Often these young people are contributing to their family. In other cases they will be contributing to their own clothing, transport, and food—the necessities of life. These things do not cost young people any less just because of their age.

All workers also need a short period in which to learn the job. It does not matter what age one is when one starts work. It does not matter whether one starts work at 16 or 60, there is an orientation into any workplace. The Green Party certainly does not believe that workers should have to spend 2 years being paid a lower wage, simply because they are learning how to work or how to do a new job.

Wage discrimination is arbitrary, inequitable, and unjustifiable. I am really pleased that this bill, even in its modified form, is taking a big step in the right direction in terms of finally getting rid of this inequity of discrimination on the basis of age.

SUE MORONEY (Labour) Link to this

I am pleased to rise and speak about clause 3, “Purpose”, of the Minimum Wage (New Entrants) Amendment Bill. It is no surprise that the National Party is opposed to the purpose of this bill. From time to time National members say that they want to do something about low wages in this country, and they have the opportunity this very evening to support the purpose of a bill that has a practical impact on improving low pay in this country. Given that opportunity, National members stand up and say they oppose clause 3, being the purpose clause.

Clause 3 states: “The purpose of this Act is to amend the principal Act to provide expressly for a minimum rate of wages to be prescribed for new entrants, …”, and we have talked about the title of the legislation and who new entrants are. This clause describes new entrants as being those who are 16 or 17 years of age and who meet certain criteria. I know that we will have an opportunity later on in the debate in Committee to talk in more detail about what those certain criteria are, but Sue Bradford certainly made reference to the fact that they will be around such workers not being in situations where they are supervising other staff.

Of course, that situation exists at the moment. Many 16 and 17-year-olds came before the Transport and Industrial Relations Committee and were able to tell committee members about situations where they were supervising other staff who were on higher pay rates than they were receiving, simply because the Minimum Wage Act in its present form allows that to occur. Also, one has to say, it was because their employers chose not to pay them what they were worth.

The member Paula Bennett raised the issue about young people in small towns. I spend a lot of time in many of the small towns in New Zealand.

KATE WILKINSON (National) Link to this

I rise to speak on clause 4 of the Minimum Wage (New Entrants) Amendment Bill. I understand there is a Supplementary Order Paper in relation to this clause. Can I say from the outset, and repeat, that the National Party thinks this is a well-intentioned bill and an attempt to avoid the exploitation and discrimination of young workers, but it is not the right instrument in which to do that.

I will pick up on one of the scenarios that the honourable member Sue Moroney mentioned in respect of the young women in the supermarket on $5 an hour. That seems somewhat incredible to me, because if those women were aged between 16 and 17, then under the current law they should have been in receipt of 80 percent of the adult minimum wage. If they are earning less than the adult minimum wage, then that is contrary to the law. That may indeed be—[Interruption]

DARIEN FENTON (Labour) Link to this

I rise to talk to clause 4 of the Minimum Wage (New Entrants) Amendment Bill. The previous speaker, Kate Wilkinson, referred to the Supplementary Order Paper, and I will not attempt to unravel the lawyer-speak that the member presented to us in that last speech. I think that is unnecessary, actually, because I think it is far simpler than she is saying.

The fundamental thing about this bill that perhaps some people have not understood is that we are talking about the minimum wage here. We are talking about a minimum wage. Maybe members opposite do not understand what the minimum wage is for. A minimum wage sets a floor below which no employer can pay. It is about having a socially acceptable minimum wage.

I heard the member Paula Bennett calling out to ask what unions are doing. Well, I think we have seen what unions can do, with the Progressive Enterprises settlement—and the Spotless settlement has, in fact, set a whole new benchmark of $14.25 an hour. That is what unions are able to do. This legislation is for workers who are vulnerable and who rely on this, but it was never intended to be the primary wage-fixing instrument. So let us just remember that, too.

I think the other thing we should remember is that we have come a long way, but, boy, did we have a long way to come! When Labour became the Government in 1999, 16 and 17-year-olds—and, indeed, 18, 19, and 20-year-olds—were being paid $4.20 an hour. That is shameful, absolutely shameful! The first thing Labour did was to lift the minimum wage for 18 to 20-year-olds. What is wrong with that? Now their pay is nearly three times what it was in 1999. The minimum wage for 16 and 17-year-olds has increased by more than 100 percent during the same period. What is wrong with that? That is fantastic.

We have provided legislation for other workers to have a minimum wage—for example, workers with disabilities. In a few weeks the House will be debating my member’s bill about dependent contractors being entitled to a minimum wage. What is wrong with that? What we are talking about is people getting paid socially acceptable minimum wages.

What is wonderful about this bill and about clause 4 is that thousands and thousands of 16 and 17-year-olds will get a pay increase after they have done 200 hours of work or have worked for 3 months, whichever is the lesser period. Again, I acknowledge Sue Bradford. She has done a wonderful job in bringing this issue to the House, and the parties who vote in support of this clause tonight will be making history. As I have said in a previous debate, it is world leading.

I say to the members of the Māori Party that I am a bit puzzled about why they would choose to make no progress at all, and to leave the current injustice in place so that 16 and 17-year-olds continue to get the youth minimum wage for 2 years, rather than to make progress. One of the things that I have understood for many years as a union negotiator is that if one asks for 10 percent and gets 8 percent, one does not say to the boss: “Sorry, that is not good enough. We will have nothing.” It is better to make progress, and that is what I think this bill does. A whole lot of workers out there are saying that this is a whole lot better than nothing, and that they are looking forward to getting a pay increase.

Supplementary Order Paper 137, which was moved by the Minister Ruth Dyson, locks in the adult wage for 16 and 17-year-olds. This means that a future Government, under the Minimum Wage Act, cannot go back to having a youth minimum wage, apart from the new entrant period. This is fantastic—unless, of course, a future Government changes the law; let us not let that happen.

Supplementary Order Paper 137 also locks in the provision that if a worker is supervising other workers, then the new entrant provision does not apply and the worker goes straight on to the adult minimum wage. That is fantastic. What is wrong with that?

The Supplementary Order Paper makes sure that where the new entrant provision applies, the worker gets 80 percent. At the moment there is no guarantee of that happening; the worker gets whatever the boss chooses to pay. So that locks it in, too.

As I have already mentioned, the new entrant provision applies for only 200 hours, which is 5 weeks for a full-time worker, or 3 months. It might be only an hour a week, but, hey, we have made a judgment on that, and we think that is fair, given the nature of the industries that are covered by the minimum wage or the youth minimum wage—the retail industry, the hospitality industry, and so on.

Once again, for the benefit of the Māori Party, this bill has nothing to do with probationary periods. This bill is amending a totally different Act of Parliament. It has nothing to do with Wayne Mapp’s bill, even though he keeps trying to bring it up—he has not really got over it. Thank you.

SUE BRADFORD (Green) Link to this

I would like to take just a brief call in order to make a few comments about Supplementary Order Paper 137 that has been proposed by the Minister the Hon Ruth Dyson. I do not think it is any secret to the Committee that the Green Party and I were not particularly happy with the bill as it was reported back from the Transport and Industrial Relations Committee—as I said in the House and as we stated in the minority report. However, we do support the latest Supplementary Order Paper from the Minister, and I would like to give some of the reasons for that.

First of all, the Supplementary Order Paper enshrines the decisions that were made by the select committee and that appear in the commentary on the bill. Secondly, the Supplementary Order Paper strengthens those decisions by adding a time-bound maximum of 3 months’ service as an alternative trigger to 200 hours for the period that new entrants are required to work before they move to a full minimum wage. This is really important, and that is what I am really pleased about, as a number of young people work only a few hours a week and it would have taken some of them up to 6 months, or even 9 months, before they could have moved to the full adult wage—it would have taken them as long as that to reach the 200 hours. That provision would have applied in a lot of workplaces, and any pretence that somehow it takes 6 months or 9 months to learn how to do a job, to be a new entrant in a job, is just ridiculous, and I am really glad that this progress has been made. Thirdly, and most important for me, the Supplementary Order Paper is strengthened by removing the power of any future Minister of Labour to again regulate across the board for discriminatory youth rates. I would like to congratulate the Government on taking that step.

These changes make a much better bill. They make a bill that is much closer to its original intent than that which came back from the select committee. That is why the Green Party is really happy to support this amendment and feels confident of making big progress with the bill today, and when it next comes back to the House for the third reading.

This Supplementary Order Paper and the bill as amended are an indication to employers and workers alike that across-the-board age-based discrimination has been removed from our Minimum Wage Act. It allows unions and employers to negotiate wages with certainty and not have to worry about a rogue firm gaining a competitive advantage through the hiring of low-cost young workers. I would like to thank the Minister Ruth Dyson again for drafting this Supplementary Order Paper, which now enables, at last, the Green Party to happily support the bill. I would also like to mention and thank Peter Brown and New Zealand First for agreeing to the changes in the Supplementary Order Paper. I know the member has been very involved in the select committee and the process of this bill going through the House. I thank him and his party for their support, and for making it the better bill that it has become today.

ERIC ROY (National—Invercargill) Link to this

I have just been listening to the debate, and I felt somewhat—

KEITH LOCKE (Green) Link to this

As we have heard from Sue Bradford, who has been the driving force behind the Minimum Wage (New Entrants) Amendment Bill—and it is good that she has had all the commendations from around the House; even from National members, who say it is a well-intentioned bill even if they do not support the content—the Green Party will be supporting this bill, this clause, and Supplementary Order Paper 137.

I would like to put to rest Kate Wilkinson’s idea that somehow this bill will stop employers from employing people who are not getting youth rates. In fact, I think a lot of the evidence she has provided argues the other way. As she pointed out, 85 percent of people at that age are not paid youth rates at present, and most of the people on youth rates are in either the retail or the fast-food industry. We have had Progressive Enterprises, a big chain, coming out and saying that it can quite easily do away with youth rates even for 15-year-olds, so I think the idea that any of these firms will go bust if they do not give the odd extra dollar to make up the full minimum rate for workers is not particularly apt. Doing away with youth rates is no great sacrifice for the employers, but they are a huge sacrifice for young people entering the workforce.

I think it is great the way Progressive Enterprises has come out and responded to the concerns of the general population, and of young people in particular, in the same way that their competitor Foodstuffs has come out recently and supported the labelling of fresh fruit, vegetables, and meat in supermarkets as a response to popular concern about that issue. The way that these companies are getting ahead of the play is fantastic.

There was a bit of an argument about people being paid $4 an hour and whether that is below what they should be paid on youth rates. I will not get into the particular argument or the figures, but I will say that young workers are often duped to some extent about what rate they are owed. The existence of youth rates makes it more difficult, because they know they will get a lesser rate as a result of these youth rates, and, anyhow, they are all a bit scared in their first time in employment. Often they do not want to talk back to the employer, and a lot of them are not unionised. Unite! and the National Distribution Union are gaining members in the industries that employ young people, but a lot of those young people are still not unionised. Unknowingly, they sometimes take a lower rate than they should have to legally. The very fact that we have clear legislation will give those young workers more confidence.

The move to complement the requirement of 200 hours’ work with a minimum 3-month period will help a lot of workers to work out where they stand too, because it might be a little hard for them to shuffle around bits of paper about how many hours they have done for this employer and for that employer, and add it up to 200. It will be a bit complicated, but hopefully they will be able to do it if they are getting their 200 hours up in less than 3 months. At least they can work back to the date that they started work and figure out when they qualify for the full rates, so it will be easier in that respect.

I think there was a misunderstanding over whether the requirement is 200 hours with one or more employers. I looked at the explanatory note on the back of Supplementary Order Paper 137, and it states that “employment” includes more than one employer. If we were to apply that explanatory note to the definition, then clearly it is employment with one or more employers.

Of course, the Greens would like this bill to go a little further. We are not really in favour of youth rates in any form for 16 and 17-year-olds, but this bill is a great step forward, and we will definitely be supporting it. Thank you.

Hon RUTH DYSON (Minister of Labour) Link to this

I will start by acknowledging the sponsor of the bill, Sue Bradford. I thank her for her determination and her stubbornness on many occasions as she watched the bill go through its many iterations at select committee, in and out, and I thank her for her support for the Supplementary Order Paper that I am moving to amend clause 4, which we are debating at the moment. This is really the heart of the legislation: the prescription of the minimum wage.

I listened with great amusement—and that is the kindest adjective I can apply—to the contribution from the member from Southland, Eric Roy, who described the process of reviewing and setting the minimum wage in Sue Bradford’s bill and Supplementary Order Paper 137 as if it were new. Frankly, for the National Party, perhaps it is new, but it has been that way as a process in the Minimum Wage Act since 1983. What happened in the 9 years from 1990 to 1999 when there was a National Government in New Zealand was that National complied with the law, because all the law stated was that one had to review the minimum wage. It did not say one had to increase it, and that is why the previous National Government did not do so. For 9 years the adult minimum wage stayed at exactly the same rate, except for a pathetic increase of $1 an hour over the entire 9 years, and at that time young people were included right up to the age of 20.

The youth minimum wage, which is the point of this debate, applied to 16, 17, 18, and 19-year-olds. Under National, one did not become an adult until the age of 20 and, what is more, the youth rate was set at 60 percent of the adult rate, not the current 80 percent. So for that member to come in here and say that this is new is just nonsense. It is new to increase the youth minimum wage; that has been happening only in the last 8 years under a Labour-led Government. That is why the graph of the minimum wage looks like it does, with the blue numbers flat-lining and the red numbers going up. Sue Bradford’s bill will improve that situation even further.

I also commend the Transport and Industrial Relations Committee, because this legislation is not as easy as the original proposal. The idea that jobs should be paid according to their value is pretty straightforward, and I think that it is an excellent principle on which this bill was developed. But the submissions to the select committee raised a number of issues, including the main driver behind our consideration of the amendment, which was the socialisation skills that young people do not have. It is not skills for the job and it is not skills generally that training itself will fix, because we still have a training rate linked to skills—and the list member from Christchurch did not seem to indicate her understanding that we have a training rate that is skill-specific related. This is about socialisation, and that is all. Frankly, some of the contributions at the select committee would indicate that even the adults who made the submissions had not quite got to that stage in their presentations, either. So after hearing from the select committee and listening to what are quite complex submissions and debates, I proposed this amendment.

As I said earlier, I am really delighted that the proponent and sponsor of the bill, Sue Bradford, has urged her caucus colleagues in the Green Party to support it. I also acknowledge New Zealand First, the Māori Party, and United Future, which are also supporting it. [Interruption] Well, I thought United Future was going to support it.

Dr PITA SHARPLES (Co-Leader—Māori Party) Link to this

Tēnā koe, Mr Chairman. Tēnā tātou katoa e hui nei ki te kōrero i te pire nei. I want to make the stance of the Māori Party very clear. All members somewhere in their speeches on this legislation have said they believe in the principle of equal pay for the job done, yet here we are with a bill that does not supply that. Why have we not got the guts to go the whole hog? That is the point.

The Māori Party went up and down the county in support of repealing section 59 of the Crimes Act. The principle of repealing section 59 was to give children the same status as adults—in other words, to end discrimination against children. Why should there be a defence for an assault on a child that cannot be used for an assault on an adult? The same thing applies here. Why can we not go the whole hog and say that we do not agree with differential wages for 16 and 17-year-olds without having to invent something like new entrants kōrero?

Although the Supplementary Order Paper is an improvement on the bill, in that workers now qualify for the adult minimum wage if they work for 200 hours or 3 months, whichever is the sooner, it still does not satisfy the Māori Party position of opposing discrimination. Our kaupapa and our tikanga, the resourcing of whānau, and the promotion of rangatahi [Interruption]—if members listen carefully—are values that are very important to Māori. We Māori are also the ones who have a lot of our population in the youth area, and what sort of message are we giving young people by saying they are worth less? What sort of work ethic are we supporting? What are the inside messages that we are sending to young people by saying to them that they should start at this lower rate?

The concept of a new entrant into the workforce does not sit with that entrant being of age 16 or 17, either. It could be that someone who is 20, 41, or 51 is entering into a new work area. Many Māori are employed in areas such as shearing sheds, the road, and a lot of manual jobs. They do not need a new entrants supervisor or skills to swing a shovel or to use a handpiece—well, they need a bit of practice for the handpiece, but to throw a fleece—

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

My honourable colleague from the Māori Party has raised a very interesting question. Let me make it quite clear that New Zealand First supports this bill, and all the amendments under the Supplementary Order Paper that the Minister has brought to the Committee. We think that this legislation is a way forward. We recognise that many employers in this country are now sympathetic to the cause, and we want to be behind them.

But the co-leader of the Māori Party, Pita Sharples—for whom I have a great deal of respect, I might add—raised an interesting question: why do we not go the whole hog? Let me answer that by saying that there are employers in this country who have some fears. It is not just a case of employing person A and person B to do the same job when one is lifestyle-experienced and the other is new. There are other qualities that employers have to take into consideration. It is not just about a measure of competence; it is about a measure of attitude and commitment. Older people tend to have a greater commitment to the employer and to the company. It is about a measure of lifestyle. Younger people tend to live for their pleasures, dare I say it—and actually some older people do, too. I have to clarify that. But younger people tend to give priority to after-hours activity as against working-hours activity, and they get the balance wrong. And—I have to say this with some concern—younger people are not necessarily as reliable as older people.

CHRIS TREMAIN (National—Napier) Link to this

I would like to add a contribution to this debate tonight. I start by responding to Minister Dyson’s comments about the changes in unemployment rates across the country since the Labour Government’s rise to power in this country, particularly her claim that amongst 18 and 19-year-olds there has been a drop of 17,500 in unemployment, and also that altogether there has been a reduction of 140,000 people in unemployment. It was an interesting point that was made because Labour members always say they are responsible for that drop in unemployment. How they make that out, I am not too sure. Did the Labour Government employ those people?

SUE MORONEY (Labour) Link to this

At this point of the debate, in the Committee stage, we are really getting to the crux of the Minimum Wage (New Entrants) Amendment Bill. I think that the member who has just resumed his seat should perhaps cross the floor, because, in fact, he argued against his own party’s position. His colleagues were maintaining that increasing the minimum rate for 16 and 17-year-olds would affect employment figures. That member did a good job of convincing—I hope—his colleagues, and certainly the rest of the Committee, that the evidence is there: increasing the minimum rate does not affect the employment rate or the unemployment rate. That is not what this bill is about.

This bill is not about affecting employment or unemployment rates; this bill is about getting a level playing field for 16 and 17-year-olds. When 16 and 17-year-olds are contributing in a workplace to the same level as any other person, irrespective of what their age may be, they will not be discriminated against by virtue of the Minimum Wage Act. That is what this bill is about.

I think that the member who just resumed his seat completely missed that point. He thought he was coming down here to debate who had done better in terms of unemployment rates—National or Labour. I do not think we need to debate that. I think everyone in the country is absolutely aware that under Labour—under its policy settings, under its support for business, under its support for workers, and under all the policies that it has brought in—there is no doubt that unemployment has fallen dramatically and drastically.

This bill is really putting the cat among the pigeons, and not just for the National Party. The National Party is really exposing its hand here. Its members have campaigned in the past on the issue of being worried about low pay in this country, and worried about New Zealanders who take their skills and fortunes over to places like Australia. They talk about that regularly and routinely. But when they get an opportunity to do something in this House to improve low pay in this country, what do they do? We can check their voting record. Every single time they get an opportunity to improve low pay in a structural way they vote against it. That is what the record of National is. So next time those members roll that little bumper sticker slogan out at election time, check the voting record.

I will move on and respond to the Māori Party position. Hone Harawira earlier in this debate talked about the very experienced union people on this side of the Chamber and made some observations. Thank goodness that the Māori Party is not a union responsible for taking wage claims forward. At this point in the debate the Māori Party members are saying—and my colleague Darien Fenton used this example before, as well—that if a union goes to an employer for a claim for a 10 percent wage increase and the employer says: “Well, good argument folks, but we can’t quite do that. We’ll give you 8 percent instead.”, the Māori Party, if it were the union, would say: “No thanks very much. We’ll take nothing; we’ll take zero.” That is the position that the Māori Party is taking at present.

I think that the Māori Party is probably standing on principle, but it is not thinking about the practicalities of this. The impact of voting against this Supplementary Order Paper is the maintenance of the status quo. The status quo means that 17 and 18-year-olds will not get this increase in the minimum wage until their 18th birthday. This Supplementary Order Paper makes significantly more progress than that.

I know that Paula Bennett sneers at people who work as stable hands, and people who live in small towns, but I want to use the example of many young people in an industry that I am familiar with who work as stable hands in the horse racing industry. Supplementary Order Paper 137 states that after 200 hours of employment 16 and 17-year-olds will receive the adult rate. That will take about 4 weeks of working in a horse racing stable for a 16-year-old—they generally work about 50 hours a week—to be on the adult rate. That is the sort of improvement that has been proposed here. The Māori Party would have that 16-year-old wait 2 years and not get the adult minimum rate until 18. I really encourage that party to think about the practicalities of the position it is putting forward on that basis. This is good progress, it is world leading.

PAULA BENNETT (National) Link to this

The previous speaker can stand up and make allegations about what I have and have not said, and she can say that I wish to see people in some regions being paid lower wages and that I do not care about people who work in stables and places like that. If that rings a bell at that particular time, then that is fine.

But let us take something that the Minister Ruth Dyson said on 25 July. She said that we need to balance the positive impact that abolishing the lower rate of pay for 16 and 17-year-olds will have for thousands of workers against the possible negative impact of giving those 16 and 17-year-olds an incentive to leave school early with fewer qualifications. The Minister has introduced this Supplementary Order Paper 137 because the Government has concerns that there may be a possible negative impact because of that incentive.

The member who spoke before me stood up and said, correctly, that within 4 weeks those young people will be on the adult minimum wage. How will 4 weeks counter that negative impact, and stop them leaving school early? The Minister herself has identified it as an issue. She said that the Government has concerns about young people having an incentive to leave school early without full qualifications, yet it admits that 200 hours can be done in 4 weeks. As such, a slightly lower wage for 1 month will not be the disincentive that Labour hopes it is.

Let us also take a comment made by the member who spoke before me, who has since disappeared.

Hon MAURICE WILLIAMSON (National—Pakuranga) Link to this

I raise a point of order, Mr Chairperson. I wonder whether you can give me some guidance on this. My understanding of the way that the Standing Orders work is that when a member’s bill is going through this House, then anybody else can put amendments to it, but that person must be putting them forward as a member of the House. So it should be that Ruth Dyson is putting amendments forward as a member. You have been calling these amendments in the name of the honourable Minister, Mr Chairperson, and I do not believe that a Minister can, in the form of a Minister, be putting amendments to a member’s bill. It must be in the form of the Hon Ruth Dyson as a member of this House. I would like some clarification.