Minimum Wage (New Entrants) Amendment Bill

SUE BRADFORD (Green) Link to this

I move, That the Minimum Wage (New Entrants) Amendment Bill be now read a third time. For too long young workers in this country have been underpaid and devalued. When I started work on this bill just after the 2005 election, I was motivated by anger at the unfairness of the way in which 16 and 17-year-old workers were paid less for doing the same job simply because of their age, and also by a broader concern at the way in which so many older people in this country disrespect the young. It is a disrespect that the pay differential simply serves to magnify.

The bill we are passing today goes some way towards remedying both these problems, and I am grateful for the support the Green Party found from enough parties in this House to see the bill through. I know that it has been a tough call for MPs in some parties to see their way clear to supporting the elimination of age-based employment discrimination, but at least we have got there, almost. I am hopeful that in a few years’ time equal pay for equal work on the basis of age will not be seen as the radical notion some people seem to see it as today.

I am, of course, sorry that the clarity of my original purpose—to completely remove youth rates for 16 and 17-year-olds—has been watered down, but the compromise we have ended up with still marks a huge improvement on the status quo. From 1 April 2008, 16 and 17-year-old workers will have to be paid the minimum adult wage once they have completed 3 months or 200 hours of work with any employer, whichever period is the shorter. If they are supervising or training other workers, then they will have to be paid the adult wage, full stop.

The new entrants wage for the first 3 months or 200 hours will still be paid at 80 percent of the adult rate. Personally, I think this is superfluous. By the age of 16 many young people in our country have already been in the paid workforce for some time—for months, if not for years. Even if they have not, every person who is new on the job needs time to learn the ropes and to be oriented to the new workplace, whether they are 16, 25, or 60.

However, although the Greens do not support the new entrants wage concept, we do accept the realities of political compromise, and I am grateful to the Labour Party, New Zealand First, United Future, Jim Anderton, and Taito Phillip Field for helping to get the bill this far. I would also particularly acknowledge Māori Party members, who are opposing the bill in its amended form, but who are in fact its fiercest supporters. I am grateful for the Māori Party’s unflinching and uncompromising support for the bill as originally conceived rather than in its watered-down version, and I hope that one day their party and ours, and others, will join in going the whole way in abolishing youth rates altogether.

This bill, even as it was originally drafted, was a compromise all along. Right from the start I was criticised in some quarters—and rightfully so—for putting up a bill that did not do away with age discrimination altogether but maintained it for workers under 16. There were two main reasons why I did not take the bill down that path. The first was pragmatic. I did not think a bill that did that would have had any chance of succeeding in this Parliament, and I think that events have proved that to be so.

The second reason was that although I do not support wage discrimination on the basis of age for under-16-year-olds, I do think we need some serious thinking and discussion in this country around the issues of children and young people in paid work. At what age should our children enter the paid workforce? Do we think that some jobs are OK at certain ages and some are not? On what basis do we make that decision? Why are some jobs seen to be worth less than others? Where do we draw which line? How do we stop some children being exploited in basically slave labour conditions? That is something that still happens here, to which we as a society remain almost completely blind.

I hope that the debate around this bill will help trigger serious consideration of these issues by the Government, other political parties, trade unions, employers, churches, and non-governmental organisations. In the end, I hope we will have a society that recognises that if someone is doing an adult job on an adult job description, then that person should get adult wages. We must also protect our children from having to go out to work too young, or from working in conditions or for wages that are untenable by anyone’s standards.

I sometimes cringe when I hear human rights groups and people of goodwill rightfully rail against slave child labour in other countries, while not acknowledging the increasing use of child labour, as defined by the International Labour Organization, that is occurring here. Addressing this issue will take more than a member’s bill, and I hope that the Minister of Labour takes up this issue and includes it as part of the Government’s employment relations work programme. I can assure her that she will have the support of the Green Party if she does.

Now I will make a particular acknowledgment of some of the organisations that did so much to help ensure that this bill got through. Above all, I would like to pay my respects to two particular trade unions, the National Distribution Union and my own union, Unite!, which both put a huge effort in people power and resources into mobilising against discriminatory youth rates. Right from the start both the National Distribution Union and Unite! organised on the job, on the streets, in the union movement, and with MPs to demand an end to unequal pay for young workers. Along with other groups like students associations, the Council of Trade Unions youth union movement, and Radical Youth, they organised some of the loudest and most colourful rallies and demonstrations we have seen on the streets of Auckland and Wellington for some years.

Young workers told their own stories of exploitation, naming and shaming youth rates employers, as well as placing this struggle well and truly within the broader struggle for youth and worker rights. They not only took to the streets, they also came to the Transport and Industrial Relations Committee and made far more perceptive and intelligent submissions than did some of those people who opposed the bill.

Young workers and their unions also included the issue in their bargaining claims. With some employers, such as Postie Plus and BP, they have succeeded in abolishing youth rates altogether. With others, such as Progressive Enterprises and Restaurant Brands, they have started the process to eliminate youth rates, which I am sure will soon be a total elimination, further assisted by this bill. Beyond this core of support, the Council of Trade Unions and the rest of the union movement pitched in, alongside groups like youth organisations, community law centres, church agencies, the Office of the Children’s Commissioner, the Human Rights Commission, and many others.

I will also make a brief comment on submissions that opposed the bill. I was surprised at the low level of opposition from the business sector. It was as if, in most cases, these submitters went through the motions of opposing the bill without their heart really being in it. In fact, I had to rely on some of the business submissions to negotiate the final compromises to allow the bill to go through. Perhaps I should not have been so surprised by the lack of opposition from that quarter. I have been interested to read a couple of employer polls over the last 2 years that showed the majority of employers in some places do not, in fact, support the continuation of youth rates. Also some major newspaper editorials have come out in full support of the bill.

These business and editorial comments have left the National Party completely exposed on this issue. Its opposition at the Committee stage was, I believe, purely token. The refrain seemed to be: “We do not believe in age-based wage discrimination, but we do not want Parliament to do anything to reduce or eliminate it.” What a cop-out! It is time the National Party turned its back on the knee-jerk, anti-worker attitudes that have infused that party for so long. Those members should, instead, support this and other progressive pro-worker legislation, rather than pandering to the predilections of some of its more reactionary backers.

Finally, I want to comment on the hand grenade that the Ministry of Justice tossed into the select committee proceedings in the form of its New Zealand Bill of Rights Act compliance report. This report stated that the way current regulations that provided for youth rates in the minimum wage could be considered ultra vires—[Interruption]

KATE WILKINSON (National) Link to this

In speaking to this third reading of the Minimum Wage (New Entrants) Amendment Bill, we appreciate that the purpose is to provide for an adult minimum rate for new entrants, who are defined as being workers who are 16 or 17 and who have completed 3 months or 200 hours of employment, whichever is the shorter. We know that the bill originally started out to abolish youth rates for 16 and 17-year-olds, and then it became amended to provide for this new entrant criteria to “recognise the experience that they have gained” in that “very short time.” That experience is translated simplistically into 3 months or 200 hours of employment, but there is nothing stated about the position, or about the training given and received. In fact, there is no mention at all of the quality of the hours worked.

There is a limitation that the employment be with more than one employer. I still think that it should read “one or more employers”, because it simply does not make sense otherwise. If a young person happens to work for four different employers, doing 100 hours with one, 50 for one, 25 with two, the total is still 200 hours. That assumes that the skills and experience in all four of those jobs are transferable. Furthermore, the 90-days condition is silent, absolutely silent, on how much that work may actually be. Is it 1 day a month for 3 months? Is it full time for 90 days, or part time for 90 days? This is uncertain law, and uncertain law is not good law.

The bill may, indeed, be well-intentioned law, though. In fact, during the second reading debate, Government speakers acknowledged that this legislation is for workers who are vulnerable. Nobody condones the exploitation of vulnerable workers, whatever their age. I do not think there will be much disagreement that all workers, whatever their age, should be valued for the work they perform. But what will this bill actually achieve? Will it prevent and outlaw exploitation of vulnerable workers, or will it be a barrier to young persons getting a job? Will it be a perverse incentive for them to leave school and not complete their education? The Minister herself even acknowledged—and on this I have to agree—that “we do not want to send the message to young people that leaving school early with no qualifications is a good idea.” That is where our agreement ends. The Minister does not think this bill will drive that message. We have concerns that that is exactly what will happen.

I have to say that our view is backed by the research paper recently of Dr Gail Pacheco, and based on her thesis Minimum wages in New Zealand: An empirical inquiry, she says: “Policy-makers must consider the possible long-term harm of a rise in youth minimum wage. Given the option, employers may switch to hiring people with more skills and education or older people with more experience. Older workers, 20 or 25-plus, will be hired because if you’re going to pay workers the same you might as well pay for skill and experience.” 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? This bill, we fear, will be that barrier.

The Gisborne Herald—and I know the honourable member Sue Bradford mentioned some editorials—actually reinforces that view. I quote: “There are some aspects of the proposed move to increase youth wages to the same as adult rates that could be counterproductive. Instead of helping youngsters it could limit their job opportunities. What it boils down to is that the Government would be placing youngsters with little or no work experience in direct competition with people who have many years of work experience, well developed work ethics, and motivation. What employers don’t want is to be forced to pay a young person the same as an older person when they are not providing the same value. A business is only as good as its product. And productivity relies on the input of staff, managers, and owners. They are always on the lookout for people who want to work and bring their own special contribution to the workforce. They don’t need a bill.”

Dr Pacheco also found that where youth rates increase, enrolments at secondary and tertiary education institutions decrease. This bill has the potential to be a perverse incentive, encouraging young people out of the education system and to leave school early. We have already announced our significant trades training policy so that more of our young people can stay engaged in schools. We should be encouraging them to stay in education for as long as possible.

In a further research paper—this one was in the UK, and I know there is a tendency by this Government to try to model, if not replicate, some of the UK laws—in the September issue of the Industrial Relations Journal in the UK, Jason Heyes stated: “The Low Pay Commission … the body charged with making recommendations to the government on the level and extent of minimum wage protection, took the view that ‘16-17-year-olds form a distinct segment of the labour market, preparing for working life, rather than being full participants in the workforce … and ideally all 16-17-year-olds should be receiving education or good quality training.’ The exemption of young workers from the NMW”—national minimum wage—“was presented as a way of ‘supporting the training base’ by safeguarding opportunities for young people to gain qualifications, skills, and experience and ensuring that young workers would not ‘find themselves locked into low-skilled, low-paid jobs—or, even worse, the cycle of low-paid work and unemployment.’ ”

This bill, instead of providing safeguards for our young people, is removing those opportunities. Training is more than just 3 months, with no criteria as to how much work in that 3 months is required. It is more than 200 hours. It relates to experience, training, skills obtained, and qualification. This bill does not address that. The Minister herself admitted that we need to balance the positive impact that abolishing the lower rate of pay for 16 and 17-year-olds will have against the possible negative impact of an incentive for 16 and 17-year-olds to leave school earlier, with fewer qualifications. We do not believe this bill achieves that balance.

I can see no reason why a 16-year-old would not be paid the same or a similar rate to a 20-year-old, a 30-year-old, or even a 40-year-old, provided they do the same work and make the same contribution. I mentioned earlier that 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; whatever its intention—cannot change overnight the amount of experience and performance capabilities of any worker, whatever his or her age.

We welcome a fair wage for fair work. We welcome the fact that many employers voluntarily pay above the adult minimum wage in any event, because they value their staff. Staff are valuable. Businesses rely on them, and productivity relies on them; they should be paid what they are worth. But this bill is not the right instrument. We do not want young people to be priced off the labour market. We do not want young people to leave education prematurely. I have asked before, 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? This bill, we fear, will be that barrier.

Hon RUTH DYSON (Minister of Labour) Link to this

It gives me great satisfaction to support the Minimum Wage (New Entrants) Amendment Bill at its third reading. I want to begin by acknowledging and thanking Sue Bradford from the Green Party for her introduction of this bill. I recognise that the bill we are considering today differs markedly from the approach that Sue initially took to this issue. But I believe that the bill achieves a balanced way forward for the 16 and 17-year-old New Zealand workers.

Balance is, in fact, the best way to describe the bill and the process that the bill has gone through. A balance was needed between those who wanted the abolition of youth rates and those who supported the status quo, or—in the case of the National Party—something even worse. A balance was needed between the rights of young workers, the perspective of the unions, and the perspective of the employers. But, perhaps most important, a balance was needed in this Parliament to gain support for the bill. That is the reality of an MMP environment.

Our Government is very proud of this achievement, which is another step forward in the steady progress towards ensuring all workers—including young workers—have fair minimum wage protection. The bill provides a 3-month maximum time limit for new entrants, in addition to the 200-hour maximum that the Transport and Industrial Relations Committee recommended. Those 16 and 17-year-olds who work full-time will now be able to reach the adult minimum wage in as little as 5 weeks, while those who work part-time while pursuing their education will receive the adult minimum wage after 3 months or 200 hours. Labour recognises that often employees who are aged 16 or 17 do the same work as adults. But we also recognise that time is needed for those workers to gain the socialisation skills necessary for working. We believe that the time frames that the new entrants rate will apply allows that learning of soft skills, while respecting the value of the work that young people do.

Clarification has been included in the bill that the new entrants minimum wage will not apply to young people who work as supervisors. I think that is a great step forward for our youth and I am particularly pleased that the bill specifically provides for this as it fairly reflects the value of supervisory skills. I am also pleased that the bill allows all employment undertaken once the young person turns 16 to be taken into account, even if it was undertaken before the commencement of this bill. That means that many thousands of 16 and 17-year-olds will have already completed their qualifying time when this bill comes into effect and will move immediately to the adult minimum wage, which our Government increased to $11.25 per hour on 1 April this year. That was an increase of a whole dollar an hour—the largest ever increase and something it took the previous National Government almost a decade to achieve. For 9 years the adult minimum wage stayed at nearly exactly the same rate under National, except for a pathetic increase of $1 an hour over the entire years. At that same time, young people were included at the youth minimum rate right up to the age of 20.

The bill comes into effect on 1 April next year and replaces the youth minimum wage rate, which is currently $9 an hour, with a new entrants minimum wage. The actual rate will depend on the outcome of the minimum wage review, which is already under way. Our Government has a commitment, confirmed in our confidence and supply agreement with both New Zealand First and the Green Party, to move the adult minimum wage to $12 an hour before the end of this term of Parliament, if economic conditions allow. So if the minimum wage does rise to $12 an hour on 1 April next year, the new entrants minimum wage would also rise to $9.60 an hour, in line with our intention that the new entrants minimum wage would remain at 80 percent of the adult minimum wage.

We will need to balance the positive impact that abolishing the lower rate of pay for 16 and 17-year-olds will have for thousands of young workers against the possible negative impact of an incentive for them to leave school earlier with fewer qualifications. I do not want to send the message to our young people that leaving school with minimal qualifications is an idea supported by our Parliament. In my view this bill will not give that message. Our increase in the youth minimum wage over the past years has shown negligible impact on the number of young people who are leaving school early. In fact, if anything, it has allowed people to stay at school longer as part-time jobs are better paid and they are more easily able to balance work and school without working long hours.

Under the National-led Government the youth minimum wage, which is at the point of this debate, applied to 16, 17, 18, and 19-year-olds. Under National a person did not become an adult in terms of the wage he or she earned until the age of 20. What is more, the youth rate was set at 60 percent of the adult rate, not the current 80 percent. It is new to increase the youth minimum wage; that has been happening only in the last 8 years under a Labour-led Government.

When National was last in Government there were 17,500 18 and 19-year-olds on the unemployment benefit, despite the fact that the youth rate then was so low that an employer could have employed 20 people in any business and it would have made hardly a little bump in his or her wage bill. The youth rates then under National were a pittance. What is that unemployment figure now? Under the National Government, which was last in office in 1999, 17,500 18 and 19-year-olds were on the unemployment benefit. The rate now is fewer than 1,000 people. There are fewer than 1,000 18 and 19-year-olds on the unemployment benefit now. Those are the statistics that National should think about before it comes into this Chamber and raises spurious arguments in opposition to improving the way that 16 and 17-year-olds are recognised through their wage packet. I am pleased we have been able to reach a position that is supported by the sponsor of the bill, because this bill has been promoted for the betterment of young people so that the contribution they make in the paid workforce is properly valued. The amendment applies to all employment, regardless of whether it is a first, second, third, or fourth job.

I am pleased about this great step forward that the bill represents for New Zealand young people. There is more debate to be had on these, and related, issues, but this bill is certainly a magnificent step forward. I conclude by acknowledging again the voices of young people, unions, and employers who submitted on the bill. I thank my colleagues in the House for the contribution they have made in strengthening and clarifying the intent behind the bill when it was debated during the Committee stage. I particularly acknowledge the hard work the select committee members have done towards the detail. This bill is another example of the Labour-led Government working with other parties in an MMP environment to achieve the best solution for the diverse interests of all those affected by the changes. I commend the speedy passage of this bill.

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

The sponsor of the Minimum Wage (New Entrants) Amendment Bill, Sue Bradford, must feel very flattered. This afternoon’s proceedings started with a message from the Governor-General. We could not work out why the Governor-General had sent a message about the bill. New Zealand First members were mystified. We concluded that the Crown must have been underpaying Prince William and Prince Harry for some time and did not want to get caught by the net. But the mundane reason was given to us in due course. We would still like to compliment Sue Bradford. She stuck to this issue and was determined to deliver. She wanted to go a bit further than this bill goes, but she has accepted it—finally, because I know that at one time she was going to reject it. She has accepted the bill as a reasonable compromise. I think it reflects her efforts very well and is a very reasonable compromise.

I have to say that I am disappointed with the National Party. Those guys could, and should, be doing better. [Interruption] They should be doing better. There is a new member over there, David Bennett; if he sat and listened for a little while, then he would understand that the National Party is putting itself in a terrible predicament when it comes to dealing with young people, or indeed people generally, in the workforce. Wayne Mapp understands that. The National Party has never been supportive of a minimum wage in concept.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Madam Speaker. Kia ora tātou katoa. Kia ora tātou i tēnei pō. Four years ago Radio Waatea carried an interview with a passionate union activist, a veteran broadcaster, an employer, a board director, a Māori rights campaigner, a chief executive, a man of Ngāti Kahungunu and Ngāti Porou—the freedom fighter Syd Jackson. Syd issued a challenge that I believe has some relevance to the challenge of this Minimum Wage (New Entrants) Amendment Bill. He said: “You have to be prepared to put yourself on the line, to take to the streets, to act, to highlight and articulate your grievances. Simply get on and do the mahi …”. There is no better way to honour this leader than to honour today his lifelong campaign for justice through his standing up for our young people—standing up for our young people to get on to do the mahi without being discriminated against on the basis of their age. This bill purely and simply is about eradicating discrimination. It was a cause that Syd Jackson lived for: leaving nobody behind, caring for te pani me te rawa kore, and standing up for the poor and the impoverished.

The Māori Party was proud to stand with Sue Bradford at the first reading on the bill, to stand for the chance for young people to benefit from adequate employment protection. We argued that rangatahi should not be vulnerable to arbitrary dismissal or unilateral changes to their terms and conditions of employment. They had the right to freedom from discrimination—as in the Human Rights Act 1993. They had the right to benefit from the anti-age discrimination provisions set out in theNew Zealand Bill of Rights Act. They had the right to enjoy freedom of discrimination as the most fundamental freedom. They had the right to enjoy freedom from elitism, sexism, religious intolerance, racism, and ageism. They had the right to enjoy freedom from discrimination against beliefs, and against cultural values. And they had the right to enjoy freedom from discrimination as manifest in slavery, in racial profiling, in hate crimes, and in ethnic cleansing.

Discrimination is not, of course, a novelty in Aotearoa. We recall, as most members might remember, a shameful history in the 1950s when it was not unheard of for landlords to erect signs saying “No Dogs or Maoris” outside accommodation. We had thought that there was sufficient progression in legislation to seriously challenge the systematic oppression and mistreatment of particular sectors of our community: Māori, Pasifika, the young, the old, and the vulnerable. The original bill convinced us that the discrimination that was being experienced by young New Zealanders would stop—the discrimination revealed the fact that currently 16 and 17-year-olds can be paid a minimum wage of a mere $8.20 per hour compared with the adult minimum of $10.25 per hour. So we voted to end age discrimination, to end adultism: the bias towards adults that is seen in the ugly combination of prejudice married with power.

The Youth Advisory Council of the Child Welfare League of America concluded that the end result of adults practising adultism is that young people become disempowered and disenfranchised. Surely a Parliament that values an investment in our future, our growing young population, would not want that. Except this is where it all became unstuck, for at the select committee suddenly the Greens’ bill became renamed. The term “discrimination” was deleted, the term “abolition” was abolished, and a new vocabulary was created introducing the “new entrant” to the workforce. Or, as my colleague Hone Harawira said, the name is just another name for the Young Slave Bill.

The select committee recommended that for the first 200 hours worked by a young worker after he or she turns 16 he or she will be paid at the “new entrant” rate. This is a new term, as Darien Fenton explained during the Committee stage: “It is quite a strange term, particularly as it is used to describe schoolchildren who are entering school for the first time.” It is a strange term, and a misleading term, to make discrimination acceptable—the ongoing discrimination that these new entrants will be paid a lesser rate than even the minimum wage of adults. It is a term of pretence, because it does not actually describe “new” entrants to the workforce—not 50-year-old new entrants, not 30-year-old new entrants—only 16 and 17-year-olds will be entitled to this measure of divide and rule. We were repeatedly told during the Committee stage of this bill, as I understand from my colleague, that this strange new version of the original bill was—if I may quote the proverbial—better than a poke in the eye with a sharp stick. We were scolded and were asked how we could object to progress. But the Māori Party is not prepared to settle for the watered-down version of justice. We are not about to meekly comply with a second-rate version of the truth.

Another bizarre piece of persuasive political posturing that came out during the Committee stage was the concept that what was really wonderful about this bill was that thousands and thousands of 16 and 17-year-olds will get a pay increase after they have done 200 hours of work. Union workforce statistics, however, show that 50 percent of the 16 and 17-year-olds who are working currently work 10 hours or fewer each week. So we are looking at the minimum of 5 or 6 months as a base before young people are considered worthy enough to earn the basic minimum wage—before they are entitled to that wonderful pay rise! What does it do to a community to legalise adult privilege in legislation in such a way as to mean that young people will not be paid equally for work of equal value? What does it do to young people to be paid less simply because they are not deemed adults by the country’s lawmakers? What message does it send about the worth of our young people? What further abuse is made more likely as a result?

The Human Rights Commission told the Transport and Industrial Relations Committee that the youth minimum wage has a significant impact on the earnings of young workers; that it perpetuates stereotypes about their capabilities and that they are worth less because they are young; and that paying 16 and 17-year-olds less than other workers breaches fundamental principles of fairness and equity. So you see, it is about fairness, justice, and decent wages for decent work, and it could have been so different. We have a saying that demonstrates how it could have been: “E ngaki ana ā mua, e toto mai ana ā muri”—while people go ahead and weed, others follow behind and plant.” The meaning is that if the first group do their work properly, then those following can accomplish their task, and everybody gets together to get the job done. What we are doing tonight is not about doing our work properly. What message is this bill giving to our children and our grandchildren—to put up with injustice, that second-best is good enough, and that they should be grateful for their lot?

What do the Minister of Māori Affairs, the Minister of Youth Affairs, and the Minister of Pacific Island Affairs have to say? How can they defend this tangled plot of weeds that is left behind to constrain our young? I would remind the House that a massive 35 percent of the Māori population is aged under 15 years, and that the median age of both the Māori and Pasifika populations is a mere 21 years compared with a median age of 36 years for the total New Zealand population. We are a very young population, and we in the Māori Party must stand here tonight with the interests of that population at heart. Those young people deserve to be treated by the system in a way that is tied unreservedly to their skills. We should be united in calling to abolish any differential wage based on age. It is unfair, it is discriminatory, and it is exploitation.

Voting to support a new entrant sub-minimum wage will worsen youth poverty and it will make it harder for young people just to meet basic living expenses. It perpetuates a low-wage climate by allowing wage standards to be lower than the minimum rates of acceptability. New Zealanders need far greater employment protections. Ending youth rates is just one part of the picture. The Syd Jackson we knew, as a union champion, activist, and freedom fighter, would never have compromised his principles. He would never live on his knees, he would die fighting for the things that he believed in, and he would say to us right now that we have to be prepared to put ourselves on the line, to take to the streets, and to act to highlight and articulate our grievances. Our young people deserve nothing less.

JUDY TURNER (Deputy Leader—United Future) Link to this

I stand on behalf of United Future to support the third reading of the Minimum Wage (New Entrants) Amendment Bill. If the bill was a blanket provision covering all young people, then I think the fears that have been expressed in the House this afternoon—that it would disenfranchise those in their early teens and younger who seek after-school work—may have been a point worthy of consideration. However, the bill recognises those young people who are able to be in full employment, yet subject to age discrimination. I think some aspects of this bill could well do with being reviewed in a couple of years’ time, particularly the provisional 200 hours, which may well be excessive. The House may be negligent if it leaves it too long before it examines how that aspect is working.

I want to commend several people. First of all I commend the sponsor of the bill, Sue Bradford. I commend the Transport and Industrial Relations Committee for the work it has done, and the Minister and the Department of Labour officials, who have worked well together to find an achievable outcome. Politics in an MMP environment is very much the art of the achievable. For the sponsor of this bill, incremental change may not satisfy the ideal she holds to, but progress is often a journey, not an event. As members of a party that approached this bill fairly cautiously, we are pleased to be able to support this final reading.

Recent concerns expressed in the media that secondary school students are increasingly trying to balance long hours in paid employment alongside full-time study need to be further considered. At 16 and 17, education is still the preferred path, and it is United Future’s hope that with improved wage rates students will be able to reduce the hours they work after school, so that they can focus on their study. For those 16 and 17-year-olds who have opted out of school, employment remuneration needs to be such that unemployment is unattractive.

I also bring to this debate what is probably a very provincial view of these matters for 16 and 17-year-olds. For those who are 16 or 17 and who live in provincial areas, often work and leaving home are bedfellows. To be able to live independently on the youth rate is nigh impossible for them, because youth rates assume that young employees are still living at home and that this is pocket money to be spent in their spare time, supporting their extracurricular activities. The truth is that for a large number of New Zealand 16 and 17-year-olds, the youth rate is now what they are reliant on to live and to make a future for themselves.

We are very pleased at the way this bill has progressed. It has certainly addressed our early concerns. I think that it is a first, cautious step, and that if these measures prove to bed down well and there are no unforeseen or unintended consequences, then maybe some of the aspirations of the sponsor of this bill may be recognised at a later date. We would certainly be open, having seen how this legislation beds down, to considering where we go from here with youth rates. However, we are very happy that we still have some youth rates and that they apply where they do. I think it has been a very sensible first step, and I commend the sponsor and everybody who has worked on this bill for the work they have done.

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

A bill like this Minimum Wage (New Entrants) Amendment Bill is, I acknowledge, always put forward with the best of intentions. I appreciate that the Green Party has put forward a range of legislation, as indeed has the Government, and those members always preface it with good intentions. They say that it will rectify some aspect of injustice or it will elevate the advantages of someone.

I notice that we always see United Future and New Zealand First sort of moving along in the slipstream, as we heard in the previous speech made by Judy Turner, saying how wonderful it is. I would ask those parties to pause and think, because this country faces a deep-seated crisis. I do not mean it is a crisis that is an instant crisis. It will not break over us tomorrow, but we are seeing a deep-seated decline—a malaise, if you will—as this country just progressively slips back relative to other countries. Yes, we have some growth. That has been well acknowledged, but this Government has squandered that growth. It has squandered some of the best economic opportunities we have seen for years.

I want to go through the legislative programme, and this is the point I am trying to make, because each of these measures acts as an impediment to productivity growth. None of them are huge impediments in their own right, but their cumulative effect is very serious. In the year 2000, when the Government won the Treasury benches, New Zealand had high productivity growth as well as high economic growth, and there is a difference.

Today productivity growth is low—there is no growth, in fact. It is actually flat. The Government is now relying on three things for growth. One is commodity increases, which have gone up. Growth in the total size of the employment has increased; there is no question about that. But there has been no productivity growth. Do members know what that means? It means that the living standards of New Zealanders relative to that of people in other countries is declining. The Government says that it is only a small decline and that it does not matter year to year, but New Zealanders look forward. They understand these things and they make their own choices. [Interruption] That number is accelerating—600 per week are now travelling to Australia. Why do they do that? They do it fundamentally because there are better economic opportunities there. Why are there better economic opportunities there? It is not because Australia, to quote a former Prime Minister, digs itself up. It is actually because Australia has a more competitive economic system. It has higher productivity growth. It has a lower level of taxation. In fact, the current Government in Australia each and every year has had a planned programme of tax reductions—not gigantic one-off reductions, but planned and progressive reductions. All that builds confidence and security in people about their opportunities. So New Zealanders, young New Zealanders especially, see that fact and make their own choice. They see greater opportunities and greater prospects, and they vote with their feet.

I will go through the range of legislation, of which this bill is a part, that has hindered productivity growth. I emphasise that point for Government speakers: productivity growth. Today the particular measure that is being debated is the Minimum Wage (New Entrants) Amendment Bill. I emphasise the term “new entrants”. Yes, that was a change. I know that the Māori Party thinks it is a terrible thing and that even the 200 hours of employment set out in the bill is discrimination, but the truth is that we are talking about 16 and 17-year-olds; we are not talking about 16 to 25-year-olds, and we are not talking about 60 percent. The gap is only 20 percent and for only 2 years. Actually, it is a time when young people should be at school in any event. Countries that are much higher up the income scale than New Zealand—the United States, Australia, and so forth—actually do have youth rates. Are those countries in crisis? The answer is no.

So this legislation will be just one more impediment to productivity growth. What is another one? Well, the Green Party—also with good intentions, no doubt—has put forward the concept of flexible working hours. That is another thing that just adds cost and complexity to the way that business is undertaken. The Labour Government even wants independent contractors to be subject to employment legislation. What an oxymoron that would have to be! I guess it was some sort of crazy token to one of their more—let us be charitable—inexperienced members of Parliament, Darien Fenton. But one can only imagine that someone like the Minister of Finance was wiping his brow and thinking: “Christ Almighty, why on earth is this happening in a party I’m a senior member of?”

Now, of course, we can refer to the Employment Relations Act, and particularly to the amendments of 2004. I acknowledge that many of the changes from the Employment Relations Act of 2000 were relatively smoothly adapted into employment law, but the changes from 2004 have caused significant problems. There has been a lot more litigation in front of the Employment Court, and a higher level of strikes than this country has hitherto had, all of which adds to the costs across the workforce.

Then there is the Resource Management Act. At every public meeting I go to someone is bound to raise their direct experience with the complexities of the Resource Management Act. Did this Government do anything at all meaningful to relieve that burden? The answer is no.

Labour’s very first move in Government was to remove competition in accident compensation. I want to dwell on that point for a moment. When National introduced competition we had an iron-cast rule that there would be 24-hour, 7-day, no-fault coverage. That was never denied by Labour. The full rate of coverage was always there and the treatment was always there. People who suffered injuries were not adversely affected, but employers had dramatic reductions in the size of their premiums—that is, their costs went down and their productivity went up. Then we had the complexity of the Land Transport Management Act. Now it is sought to have the minimum wage set at $12 an hour. There is the local government legislation, and so on and so forth. Each one of these measures has hurt productivity. It is now zero.

The legislation that is being promoted today, well-intentioned though it might be, will be just another little thing that will harm productivity. But if we add it to all those other things, we have quite a serious impact. So whereas 9 years ago this country had productivity growth of about 1.5 percent—still less than Australia or the United States, but it was 1.5 percent of GDP—there was actually a chance that we could go up the OECD ladder in terms of growth. Today it has inexorably declined to zero. I am not talking about economic growth—let us not confuse these points—but about productivity growth. Real wealth ultimately comes from productivity growth.

National is saying as a party that we have to take stock. We have to be careful in the nature of the compliance costs we load on to business. That does not mean to say we cannot deal with real injustices, and it does not mean to say we cannot improve the situation, but there is no point in just adding on each of these little measures and imposts that ultimately harm the growth of this country. I have to say to the Government and the parties that support the Government that the effect of this legislation will be to drive more New Zealanders out of this country, and it will be the very people the Government wants to help, because the people who go will be the young people. They will go to Australia for a better future, and that is an indictment on this Government.

Hon MARK GOSCHE (Labour—Maungakiekie) Link to this

It is a widely held view that dinosaurs are extinct, but we sit every day and look at them across the House. The last speaker was the “Mapposaurus”. I want to comment on a couple of his points. Do members remember the National Party leader—

DAVID BENNETT (National—Hamilton East) Link to this

If we wanted to hear from a dinosaur, we have just heard from one. If we wanted to hear a blast from the past, that is what we have heard from Labour and the Greens in respect of the Minimum Wage (New Entrants) Amendment Bill, because this is communism. This is saying that everybody is equal and everybody is the same. Those parties, if they had half a chance, would have everybody in this room sitting at the same level. They say there is no difference between someone who has just started working and someone who has been working for 30 years. They say there is no difference between the person in the front row and the person in the back row, and there is no difference between someone who is leading a party and someone who is sitting at the back. Well, there is a difference. There are differences when it comes to everything we do in our society. We have a hierarchical society. It is based on success and it is based on positioning, and one has to get a start. This bill is hurting those people who need to get a start. If we want to go back to the past and talk about communism, dinosaurs, and blasts from the past, then we should look at Labour and the Green Party, because that is what is happening in this legislation.

It is not helping the people who need assistance. The young people who will make this country strong are not being helped by this legislation. All we are doing through this legislation is making sure those people will not get that first chance. They will never get a start. They will not get the chance to go out there and prove themselves, to develop those skills, and to make a go of themselves.

We have one of the highest rates of youth unemployment, especially Māori youth unemployment. Will this bill help that? Forget it! If an employer has a choice between somebody who has 20 years of life experience and somebody who is just coming into the workplace, whom the employer has to pay 12 bucks an hour, I ask who that employer would choose. I would like to see Labour pay all its staff, and all the people who have ever worked for it, in any capacity, on the full rate. I bet members that Labour does not do so. I bet Labour has been rich enough to take advantage of this legislation in the past. I bet Labour’s funders have been rich enough to take advantage of this legislation in the past. It is good enough for Labour to vote for it, but its members will not come in here and do the opposite; they will use that legislation to pay people at a minimum rate, then come in here, say they are holier than thou and will pay everyone $12 an hour, and then see how the employers get on.

That is a recognition of a Government that is out of touch with the people, and that is why it is polling at the current rate. The Government has no idea of what the employers want, it has no idea of what the community wants, and, more important, it has no idea of what young people want. Young people want a start; they want a future. That is why they are going to Australia. It is not the old people leaving and going to Australia; it is the young people who want a future who are doing so.

They are going because they can see they will be able to earn more and be taxed less, and they can see there is economic growth. Economic growth is the thing these guys have stymied. Economic growth in Australia today is at 4 percent. What are we at? We are struggling to be at 1 percent. That is the difference between our countries. If the Government wants to do something for our young people, then it should have policies that will get us up to an economic growth of 4 percent. If it keeps us down at 1 percent, then it will not be able to pay the $12 per hour minimum wage rate. There will never be an ability to pay that $12 to young people going into the workforce if our economic growth is kept at those low levels.

This is not an argument about justice for young people, as the Green Party has tried to put out. Even if it were, that party’s members got shafted in the Transport and Industrial Relations Committee by the Labour Party. They went in there with the philosophy that this is better than anything else, that this is what they wanted to do to have equality across the board in New Zealand. That is true Green policy, which is fine; that is what the Greens believe in. But they got slammed by the Labour Party. The Labour Party went in there and said “No”. In fact, the Labour Party did not actually say no; the Labour Party did what it normally does: it took the Greens right to the altar. It took them right up there and said it would back them, that it would be there, and that it would be the one to go to bed with them. And what did Labour do? At the last minute it said “No”. It said it wanted 200 hours as a new entrants scheme. What did that do? It meant that those beautiful people from New Zealand First, who have no ability to change their minds, had to come in behind, because once the Labour Party does something, New Zealand First also has to do it.

That is what has happened in this case. The Green Party went into the select committee with the emotional intent and the pure ideology of what they wanted to portray, but it got shafted by the big, bad, red party, and New Zealand First had to come in behind it and back it up. That is the reality of what has happened with this legislation. It is nothing about helping young people. It is not about the new generation of New Zealanders getting a chance. This legislation shows politics at its worst. It shows an idea that has been transformed and mutated by a Government that wishes to stay in power and wants to put its spin on something but not actually change the rules. That is what has happened in this case.

When the members of the Green Party walk out of this Chamber they will try to have some face, hold their heads high, and say that they achieved this. But the reality is that the legislation we are passing is not what they really wanted. It is not what they went after in the first place. This is a Labour Party jaunt on top of what they tried to do. At some stage the Greens will have to stand up and say what they actually believe in, not what those guys tell them they have to believe in to get something through this Parliament. It will be an interesting day when that actually happens.

When we look forward we have to look at a tight labour market in the New Zealand economy. In any Western country it is tough for employers to get good staff, and they will pay people what they deserve. There is nothing discriminatory in what the National Party is saying. We are not saying that this is a maximum rate; we are saying that this is a minimum rate. There is a big difference. Employers can actually pay more than the minimum rate if they want to. They can go out there and say they want a person who they think is a good employee. They will not care what age that person is, and they will pay that person at the right rate. There is nothing discriminatory about that. If we said there was a maximum rate, then fair enough: that is discriminatory. But we are not doing that. We are talking about a minimum rate. That is not discriminatory. That is the big difference that I think these political parties need to look at.

It is not about saying that one party is against youth, against minimum rates, or against employees. It is not about that. This is a purely philosophical argument about a party that said what it believed in, and a party that overrode it. The National Party has been constant in saying throughout the whole time of this debate that it believes that employers have the ability to pay more than that rate. We say that employers can pick the right people and pay them the right rate. We do not see this debate as being about young people not getting paid for what their value is; this is a debate about how we send the signals out there. Our signals through our community are ones of hierarchy. [Interruption] No, our signals are of hierarchy. We sit in a building that is based on hierarchy, our questions are based on hierarchy, and our votes are based on the hierarchy that comes from an election every 3 years. Then we expect everyone to live by different rules. We cannot do that. There is only one way to go—that is, to achieve success through building up from having a start. That is what we are denying our young people. We are denying them that step through the door.

How many people in this room have had to give in order to get where they are now? I bet everyone would say that they have. David Cunliffe, a Minister, actually said in the second reading of the bill that he had to give to the Labour Party in order to get into this building. When one is a young person starting out in a job, one has to give something to get the experience in order to get that step through the door to make a start. I bet that all those people opposite gave something. They would have given to a union, which is not a very good choice. But they gave something. Now they have moved up and are sitting on those benches without having any idea of what it is like to be an employer. They would have no idea what it is like for young people out there now who want to take a step, who want a chance, and who want a dream. This legislation denies them that chance and that dream, and the shame is on Labour, on the Green Party, and on the New Zealand First Party for doing it in this way.

KEITH LOCKE (Green) Link to this

On behalf of the Green Party I thank the different parties, particularly the parties that support the Minimum Wage (New Entrants) Amendment Bill. But I also respect Kate Wilkinson, who seemed to accept the moral basis of the bill. She said that people should be valued for the work they perform, and that there should be a fair wage for fair work. Her objections to the bill seemed to be practical, but had she listened to the young people who mobilised around the country—Sue Bradford and I were part of various demonstrations, and even student strikes—she would have heard them saying that they needed this money not to stop them from going on to higher education but to help them to achieve it. Those people were driven to advance their careers. So I think we can knock out that practical argument that National came up with.

National’s other argument—its only other leg to stand on—was that in some ways people have to be rewarded for skills, and that employers will hire older people because they have more skills and experience. In actual fact, the most skilled jobs in the economy do not have youth rates; it is the least skilled jobs in the areas of fast food and retail that have youth rates. Contrary to what Wayne Mapp said, the economy will not collapse if these young people are paid a couple of extra dollars to take them to the adult minimum wage. That view is just stupid, in my opinion.

I think that the effort from all parties, including the Māori Party, has been tremendous. Even though the Māori Party is not supporting this bill, it has been part of the campaign to get this legislation through for young people and for justice. The Green Party is totally in support of what we have achieved tonight. I particularly thank my colleague Sue Bradford for bringing this legislation forward. We can live with a position of compromise, even though we have some reservations about it. But we have to recognise the great achievement that this bill is and celebrate it together. Thank you.