Minimum Wage and Remuneration Amendment Bill

Hughes Hon Darren Hughes Link to this

I hear the Fabian Luddites across the way. The Fabians just loved to put people in little victim modes and then prey on them. The Fabians loved to prey on victims, and to make the victims think they could not do anything for themselves so they had to have the nanny State. I tell members that this country is sick and tired of the interfering way of these Fabians here, who are like the Fabians of a hundred years ago, people like John Maynard Keynes—the deviant—the Webbs, Ellis, and all those guys from back about a hundred years ago. They are where the Labour Party comes from.

Who is the quote from? The quote is from Abraham Lincoln. I would love for Darren Hughes, the new Trevor Mallard, to be able to get up in the Chamber and say what Labour members really think of Abraham Lincoln. Abraham Lincoln had it right: if people try to tear down too many things, they will be left with nothing. That is what this bill does; that is exactly the purpose of this bill. The purpose, although being one of the Fabians’ mantras, concerns the minimum wage. Although the bill sounds nice, if it goes ahead it would mean that those who employ people and who pay their wages will not be interested in giving out pamphlets any more. They will not be interested, so the downstream effect will see those whom they seek to help becoming unemployed. Those whom they seek to help will not have the pamphlets to deliver any more. Whether those people have been getting $20 or $30, they will not get that any more.

What would Wilberforce say about that argument?

Oh, Wilberforce. Yeah, that is right. He is another one of Labour’s mates. Labour just loves to portray itself as the protector of the workers; the indigenous; women; and this, that, and the other, but that does not wash.

The downside of this bill is that employers will not pay what they cannot afford. That is what Mr Lincoln was on about. Employers should pay what they can afford and help out people who use the pamphlet drop as a top-up to their wages. This bill will not go through. I do not really know why we are here debating it, because we know the numbers already, so we might as well have a vote now and get rid of it. But it is good theatre.

Street Hon MARYAN STREET (Labour) Link to this

I think that speech has to go down in history as one of the most disgraceful from a member of any party in this House. It has to be one of the most disgraceful speeches because it was completely opposed to any kind of minimum wage protection. That member’s speech was a justification for slavery. It was nothing more or less than a justification—

I raise a point of order, Mr Chairperson. I take great offence at that member accusing me of being supportive of one of the meanest dastardly acts on earth. I am telling you that I am offended by that comment.

Barker The CHAIRPERSON (Hon Rick Barker) Link to this

This is a Chamber of robust debate. The member did not directly accuse that member of advocating or supporting slavery. The member said that if that line of logic was argued, then it could be used as a justification for slavery. We cannot have anything but robust debate. The member might be offended by the connection to that term, but the member did not say that the member directly supported slavery. The member can continue with that line of discussion.

I raise a point of order, Mr Chairperson. I do not wish to go against your ruling, but I am offended at the implication of what the member said. I think it is drawing a longbow to say there was no implication in what she said. She implied that what I said was a justification for slavery, and therefore the implication is that I am in support of slavery.

Barker The CHAIRPERSON (Hon Rick Barker) Link to this

It is a convention of the House that when the Chair has ruled, the matter is closed. The member is seeking to go over a matter that I have already ruled upon. The matter is closed. I gave some forbearance to the member to make a few other comments, because I know the member is feeling strongly about the comments made, but I have ruled on the matter. The matter is closed.

Could I just reiterate to the member that this is a difficult balance to achieve. The first thing the Speaker does after the swearing-in of members of Parliament, and after the Speaker is elected, is go to the Governor-General to get free speech. Free speech gives members the ability to say what they think and feel, and it is to be jealously guarded. On the one hand it is free speech, and on the other hand one has to protect the rights of members. If the member had said directly that that member, by name, supports slavery, etc., I would have agreed immediately with the member if the member had said that was not the case. But the member on her feet said that the arguments advanced by the member could justify, as I recall, the support of slavery. That is a point that the member is entitled to make, and to draw a connection. That does not necessarily mean the member supports slavery directly. That is a fine line, I accept. That is my ruling, and I invite the member to continue with her speech, mindful of the issue that has been raised by the Hon Tau Henare.

Street Hon MARYAN STREET Link to this

I raise a point of order, Mr Chairperson. This is a different point of order. Can I get a point of clarification from you? If the implication or the accusation was that it could be taken that my speech was in support of Nazism, would that be the same as covered in your previous ruling?

Barker The CHAIRPERSON (Hon Rick Barker) Link to this

Could I firstly say to the member there is no such thing in the Standing Orders as a point of clarification. That does not exist. The member can scour the Standing Orders as long as he likes, but I have not seen it yet. But it was a good try. Firstly, there is no such thing as a point of clarification.

Secondly, the Chair does not have to rule on hypothetical things in the future. That is not the Chair’s job; it is about what was said at the time. I have discussed the matter and given my opinion. Rightly or wrongly it is my view that although the member felt aggrieved about the comments, they still fell within the ambit of free speech. When the member continues with her speech, I advise her to be sensitive about this issue.

Thank you, Mr Chairperson. I do quite freely say that I am sorry if the member has taken offence in that way. However—

Street Hon MARYAN STREET Link to this

I raise a point of order, Mr Chairperson. Although I cannot point to any particular ruling, I am pretty sure that a member cannot refer to a ruling that the Chair has just given.

Barker The CHAIRPERSON (Hon Rick Barker) Link to this

The honourable member is correct. Normally if offence is taken, the member is expected to withdraw and apologise. I did not require the member to withdraw and apologise, but I felt that the member was acknowledging that you had felt upset about the comments and was apologising directly to you, even though she was not required to by the Chair. I thought the member was winning his point twice, without having to win it.

Thank you, Mr Chairperson. Let me proceed with the argument, in that case. I heard the previous speaker say essentially that employers should be able to pay what they can afford. I hope that is a correct representation of what the previous speaker said. To say that employers must be able to pay simply what they can afford took me back to speeches that were made in defence of slavery. Speeches were made—and could be repeated today—that said employers cannot be compelled to pay wages that they cannot afford, and any institution of a minimum wage and any increase of any instituted minimum wage would offend against that.

The problem with that argument is simply that employers are not inclined, by and large, to be open with what they are able to afford. Employers have typically, in my experience in industrial relations, held very close to themselves the amount that they are able to afford in any negotiations, in order not to be outdone, in negotiations, by a union.

If the previous speaker’s argument is to be followed through, it could be that the owner of a cotton plantation in some former time could have said: “I could not afford to pay a minimum wage and therefore should not be obligated by legislation to do so.” The point remains. The fact also that the previous speaker chose to use Sir William Wilberforce in a way that was meant to be derogatory, I think reflects, first of all, on his lack of understanding of history, and, secondly, on the lack of compassion around the issue that Sir William Wilberforce is so famous for. To say that the only tenet that underpins the employment relationship should be what an employer can afford to pay negates centuries of progress.

This bill before the Committee—and I commend Darien Fenton for bringing it to the House—is seeking to improve a situation that exists in New Zealand whereby over many years we have had a minimum wage and where, under successive Labour Governments, we have seen improvements to that, and very recently, for quite probably the first time in history, we have seen a small increase by a National-led Government. However, what we have here is a loophole that this bill is looking to address. Vulnerable workers, particularly vulnerable workers who are contracted, will not be entitled even to the Government’s miserable increase to the minimum wage that we saw enacted recently. That situation cannot be left to lie where it is. This bill seeks to amend that loophole.

Bennett DAVID BENNETT (National—Hamilton East) Link to this

The Minimum Wage and Remuneration Amendment Bill was put up by Labour members in the last throes of their Government and was never actually taken on board as a Government bill. It is amazing that they come into the Chamber at this moment just in time to tell us that we should vote for the bill, and that to not vote for it would be unconscionable to workers and not take into account the people who are out there working hard—all those great anti-Tory lines that the Labour Party uses. Yet what did they do when they were in power, when they had the chance, and when they were sitting on the Government side of the Chamber? They did not support this bill. They did not support this bill, because even they knew it was bad law, even they knew it was unworkable, and even they knew that their colleagues at the time—New Zealand First—would not have voted for it.

That is the problem with Labour members. If they are so high and mighty and come into this Chamber to say this bill is the best thing since sliced bread, why did they not support it 9 months ago? They did not want to support it 9 months ago, because they knew it would not work. So this bill is destined for only one position in this Chamber: it is destined for failure. It did not pass the Labour test when it was put up by Labour members, so it will certainly not pass the test of this Committee at this time.

Why does it not pass the test? It is because even the Labour Party, in its heart of hearts, knows that we cannot make employees and independent contractors the same. There is a point of difference. The reason we have the ability to independently contract services is that contracting represents different kinds of work in many cases. It often represents people being in business for themselves. When people are in business for themselves, which is something Labour members would not have much idea of, they actually have to make some sacrifices. They have to go out there and do things that would not fall under the rules and regulations of an employment agreement, in order to get the business going. How many plumbers, builders, and electricians charge their clients on an hourly basis by the book? I bet members that they do not, and they certainly will not do that in this current environment, because they want to keep their jobs, they want to keep their work, and they want to make sure they give a fair deal for what they do. That is the business those people are in; it is not the business of 120 people in this Chamber sitting behind desks and chairs telling people how to run their lives. That is what people do not want and that is why they voted against Labour at the last election. That is why even the Labour members would not put up the bill. They knew it would never work.

Look at this bill now. Labour members come in here and expect us to vote for it, and then they put in amendments about increasing the minimum wage, just to try to play for it. Well, when National came into power we increased the minimum wage off our own bat; Labour did not have to tell us how to do it. The Labour Government never made a statutory increase in the minimum wage as Labour members are proposing now. Over 9 long years when the economy could actually pay for things they would not do that, but in tighter economic conditions they expect us to do it. It does not make any sense.

The relationship between this bill and the reality of commerce and of individuals’ ability to determine their own futures is non-existent. This bill does not relate to what it is like in the real world. In the real world people contract to provide services; in those contracts for services their position is to provide services, and somebody pays them to do so. That is how it works; that is how life goes. People go out and provide a service for money. If we take away the ability of people to contract, then we are taking away one of the fundamental rights of our economy, we are taking away one of the fundamental rights of our people, and the member proposing this bill will be taking away one of the fundamental human rights. It is a fundamental human right for people to better themselves, to have a choice about how they live their lives, to make a choice about how they conduct their businesses, and to make a choice about how they provide their services. It is important that we in this Parliament enable people to make that choice and deliver those services in the appropriate manner.

The question was put that the amendments set out on Supplementary Order Paper 4 in the name of Darien Fenton to Part 1 be agreed to.

A party vote was called for on the question,

That the amendments be agreed to.

Ayes 57

Noes 64

Amendments not agreed to.

Link to this

A party vote was called for on the question,

That Part 1 be agreed to.

Ayes 57

Noes 64

Part 1 not agreed to.

Part 2 Amendments to principal Act

Barker The CHAIRPERSON (Hon Rick Barker) Link to this

This debate includes the schedules.

Peachey ALLAN PEACHEY (National—Tāmaki) Link to this

I appreciate the chance to take a call to speak to Part 2 of the Minimum Wage and Remuneration Amendment Bill. If my history is as good as that of my colleague Mr Henare, the year 1983 is of considerable significance.

Clause 5(1) states: “After the commencement of this section, the principal Act is called the Minimum Wage and Remuneration Act 1983”. If my recollection is correct, in 1983 a National Government was in office. From 1983 through till today, Labour has had 15 years in office. It has had two terms and every opportunity to have this sort of legislation sponsored by the Government. But, no, we find ourselves in a new Parliament, with a Government that is facing some of the most severe financial and economic circumstances that this country has faced—not since 1983 but for 70 years—and we are still debating a member’s bill long after the electorate has spoken. I invite the member in the chair to consider that for a few moments, and to consider whether it is her wish actually to proceed. We must be very clear about this.

Some of the debate this afternoon has really troubled me, as it did the last time we debated this bill, a couple of weeks ago. To suggest that National is not committed to a minimum wage is wrong, and bringing up that argument brings no credit to members on the other side of the Chamber. It is just as wrong to claim that National does not have a commitment to minimum protections for lower-paid workers. That sort of argument does no credit, at all, to the Labour Party, for two very simple reasons: firstly, 1983 was the year when the National Government brought about minimum wage legislation; and, secondly—and of course the Labour Party has great difficulty with this now—it is a National Government that has moved very quickly and decisively, despite financial and economic pressures, to increase the minimum wage. We have to ask the question: if it was so simple and straightforward for a newly elected Government, despite all the problems it inherited, to do that, why could not a Government that had been in office for 9 long years have acted as decisively?

The other point of reference I make is to new section 4A, “Prescription of minimum remuneration”, inserted by clause 7. I want to draw the Committee’s attention to the words “Prescription”, “prescribing”, and “prescribed”, because they occur no fewer than five times in the space of only three subsections. In fact, if we look at subsection (3) in new section 4, we see that “prescribed” occurs three times in three and a half lines. I suggest, with all courtesy and humility to the member, that a visit to Roget’s Thesaurus might have given a few more alternative words to use. But I then remind myself that the Opposition is basically socialist. The term “Fabian”, used in a description by my colleague, was very well-used. The words “prescribed”, “prescription”, and “prescribing” are so much part of the socialist lexicon that that is why this bill must fail.

Fenton DARIEN FENTON (Labour) Link to this

First of all, I thank members for their contributions, bizarre as some have been. I think it has been an interesting debate that is worth pursuing, because it is one way of getting the National Government’s views on the record. We have certainly achieved that, if nothing else.

We have heard from National members that they think it is OK for some workers in New Zealand to be paid less than $12.50 an hour. This is very much “old National”. If Mr Peachey knew his history, then he would know that in 1983 the Minimum Wage Act was completely unnecessary, because in those days we had national awards that set minimum wages and conditions, penal rates, holidays, and other things for workers. It was not until National became the Government in 1990 and did away with all those things that the minimum wage became important. Mr Peachey should learn his history before he gets up and spouts about it.

Fenton DARIEN FENTON Link to this

I’ll read the book tonight.

I thank Mr Peachey. I think it would be good if he did.

In this Minimum Wage and Remuneration Amendment Bill we are talking about a changing workforce. The previous Labour Government may not have passed this legislation 9 years ago; we may not have done it 15 years ago. That is because we have seen a change in the nature of the workforce, whereby more and more people are being moved out of the employment relationship and into non-standard work, which includes independent contracting and dependent contracting.

I want to make it clear that this bill would not apply to Graham Scott, the independent contractor employed by Bill English. He has been given permission to be paid $2,000 a day. Based on an 8-hour day, that is $250 an hour. The Labour Party is not asking for $250 an hour; we are asking for a $15 minimum wage over the next 2 years. All that this bill does is to guarantee every worker in the country who is over the age of 16 years at least $12.50 an hour, which will move up to $13 an hour and then up to $15 an hour in 2011. I do not understand what is wrong with that.

I will give some examples, and I would like the National members in their contributions to tell me what they would do in such cases. The first example is about a pizza delivery man who is employed as a contract driver. He is assigned to work 10 hours straight, with his payment based on the number of pizzas that he delivers. That ends up working out at $3.50 an hour. How do we fix that problem?

Lianne Dalziel gave a very, very good contribution in terms of home-care workers on 24-hour shifts. These people are looking after our older relatives in the community. One home-care worker was looking after a man with Alzheimer’s disease. She signed a contract with an agency stating that she was an independent contractor and was self-employed. She had to pay her own accident compensation levies, her own tax, and for her own travel. She was paid by the hour for the time she spent at the residence of the person she was caring for.

I have seen hotel workers who are employed on a contract basis and are paid based on the number of rooms they clean. They have to try to get 15, 16, or up to 20 rooms done to earn anything like the minimum wage. That is not right. Those are the sorts of issues that this bill is trying to fix. I will perhaps address some of the mechanisms a little bit later in the debate.

I came across some cleaners who answered a Be Your Own Boss advertisement. It is out there—Be Your Own Boss. The cleaners bought hundreds of dollars’ worth of supplies to set up their own cleaning businesses. After working long hours they found that their weekly earnings came to less than $6 an hour. They are independent contractors, they are vulnerable contractors, and they are listed in the proposed new schedule 2 in my Supplementary Order Paper 4 amending this bill.

These people do not have bargaining power. They are not the Graham Scotts of the world, who have the ability to go and negotiate large sums of money for themselves. These people are trying to earn a living in a recession when times are difficult. As I said at the beginning, this bill is simply about one thing, which is that in this country no one should be paid less than the minimum wage, and people definitely should not be paid less than the minimum wage because of the nature of their employment.

I note too that New Zealand is falling behind on this issue. Other jurisdictions are tackling this issue, and we looked at this in the select committee. Austria, Australia, France, Norway, Germany, Canada, and the UK are just some of the countries that have protections or specific policies. They range from recognising economically dependent workers by extending employment rights, to recognising a category of workers who are entitled to a minimum wage, such as in the UK. Those countries are not trying to make them into employees; they are simply paying them a fair wage.

In this area there is both a higher end and a lower end. We have heard about the higher end. This bill is not about the higher end and, as I have said, about paying the Graham Scotts of the world. It is about those workers who are struggling to make ends meet and who are suffering social and economic hardship as a result. I will leave it there for now.

MICHAEL WOODHOUSE (National) Link to this

The quotation of that great American President Abraham Lincoln by the Hon Tau Henare was inspirational. The discussion has been a very interesting one but, without relitigating the response from the Opposition, the reference to slavery following Mr Henare’s quotation of Abraham Lincoln was ironic in the extreme. It has been a fascinating debate on the Minimum Wage and Remuneration Amendment Bill, but it will be ultimately defeated because it is not supported by the Government. It is not really supported by the Labour Opposition, as Mr Bennett said. If it was, it would have been introduced as part of the previous administration’s agenda.

The question is not about whether National supports a minimum wage, as the other side has suggested, but where that level should be. That seems to be a question that Labour is asking itself, and it seems to be all over the place on this issue. The member for Hutt South and Labour’s shadow Minister of Labour, Mr Mallard, said last October that he could not commit to large increases in the minimum wage due to the economic conditions—conditions that have got worse since then. The Leader of the Opposition, Phil Goff, demanded a rise in the minimum wage to $13, yet the Labour Party’s election manifesto promised an increase to $12.65. So I am not quite sure where exactly Labour members are on their own policy.

The most interesting and confusing thing about this bill is that in the estimation of all but the most extreme left-leaning economic commentators, this bill, if passed, would actually be very bad for the people it purports to help. It will be bad for the young, it will be bad for those who are in their autumn years who lose their jobs, it will be bad for the less than fully able, it will be bad for ethnic minorities, and it will be particularly bad for those people who are on income support and are looking to augment their incomes. We know—and Jacinda Ardern said as much in question time today—that the problem of youth unemployment is serious, with 10,300 extra people unemployed in March. We now have one in five 15 to 19-year-olds looking for employment. So what will we do? People who have employed staff—and, sadly, there are precious few on the other side of the House with that sort of experience, otherwise they might have a little more empathy with the issues—know that young people lack experience. They lack the work habits and the level of productivity that employers look for, but they are employed anyway because employers know that eventually they will come up to speed and be productive members of the workforce. Employers will often put the needs of their employees first, as the employment legislation in this country requires them to, but they are not social workers. So they will not employ the inexperienced, the young, or people who need to be given a chance when the choice is between doing that or paying exactly the same wage to people with the experience, the productivity levels, and the work habits.

The bill might be well meaning, but it is ideologically flawed. It is bad for the very people that the member in the chair, Darien Fenton, is trying to help. It would also further reduce productivity at a time when this country badly needs a lift. It is bad for the hard-working and the hard-hit small businesses that are already telling the Government to take it easy because these times are tough, compliance issues are drowning them in paperwork, and accident compensation levies are going up.

Pillay Lynne Pillay Link to this

Yep, and this Government’s responding. It’s cutting everything.

MICHAEL WOODHOUSE Link to this

This Government is responding by reducing the degree of burden on hard-working employers, many of whom are saying that members on that side of the House have burdened them with issues for 9 years and red tape has gagged them for so long. This bill is just another example of those burdens and it is a bill that Labour members know deep down they do not support, but it is a really good opportunity for them to stand up and say that they support workers. Well, this bill does not support workers because if Labour members really believed in it, they would have passed it themselves.

Pillay LYNNE PILLAY (Labour) Link to this

It is a pleasure to take a call on the Minimum Wage and Remuneration Amendment Bill. I particularly want to congratulate my very good friend Darien Fenton on bringing this bill to the House. I just want to say that the speech I have just heard was one of the worst speeches—apart from Tau Henare’s speech earlier—that I have heard in this House. The previous speaker, Michael Woodhouse, is someone whom the National Party will put their arms around, saying “You are exactly the sort of new member we want. You are exactly the sort of person we want in our party.”

I will talk about the arguments put up by the Government. We have had some members saying that we are somehow imposing the minimum wage on highly paid independent contractors. What nonsense! Then we had speakers like the previous speaker who say Labour should have done this before. I will spend some time talking about why this bill is so necessary now. When Labour came into Government the minimum wage was just over $7 an hour. The youth rates were about 3 or 4 bucks an hour. So employers did not need to rort the system with independent contractors. The levels were so low under the previous National Government that they worked. But when Labour came in, it brought in the Employment Relations Act. It brought in time and a half on public holidays. It brought in 4 weeks’ annual leave. It enhanced rights for workers. They were very good things. I say in this House that unscrupulous employers then wondered how they could avoid paying the exorbitant rate of $12.50 an hour to a worker who puts in a few hours of work a day. That was just too high. It had been really great under the previous National Government—it had been only 7 bucks an hour. It went up only a few cents in 9 years. Then, with a Labour Government that raised the rate to $12, it was just too hard. My goodness, along with the Greens’ Sue Bradford’s bill and Labour’s full support for that, that was the rate for young people. It was far too high, so those employers decided to employ more independent contractors, because they have no rights. That really worked for those employers.

I think Mr Woodhouse is my height. That is what we have in common. We are around the same height. When we are standing talking in the House, members cannot see so much of us. And the member has a big voice, and that is great, but what he is saying is absolutely offensive.

There is a real need for this bill, because the only time that it is really used, that it needs to be brought into effect so that people are paid the minimum rate, is, nine times out of 10, where there is a rort being used so that it is depriving workers of a living wage. I think it is absolutely abhorrent, in this day and age, in a country like New Zealand, which has many, many things to be proud of, to see workers going out and doing an honest day’s work and at the end of the day coming home and, when you knock it down—to take the pizza-selling example that Darien Fenton used—maybe bringing home 3 or 4 bucks an hour.

The members on the other side argue that we would impose a low rate on highly paid contractors—which is just ludicrous—or that there is no reason for the bill. The advocates for the 90-day trial period legislation even argue that the bill would somehow disadvantage disabled people or young people in finding employment. What a patronising, appalling thing to say, that people who are young or who have a disability should be employed on 3 or 4 bucks an hour because it gives them the opportunity to work! I think that is an insult to them. If we look at the term “independent contractors”, we see that some can earn more in an hour than the weekly minimum wage. Congratulations to them. Those people do not need the assistance of this bill, but people who are vulnerable, exploited, or are not in a position to have bargaining power, do need this. It is a small price to pay.

Douglas Hon Sir ROGER DOUGLAS (ACT) Link to this

I was not going to speak in this debate, but when I listened to the crocodile tears coming from the Labour Party I thought that maybe I should say a word or two. I probably come at this from a different point of view to that of a lot of National members, and I certainly have different points of view to the ones expressed by some Labour members. Their inability to understand even some basic economics is hard for me to understand or believe.

Assertions have been made that the minimum wage level is too low, that it is not rising fast enough, and that it should apply to some people who are not covered. In my view, this is unfortunate, given that in the long run the effect of minimum wage legislation such as this is, paradoxically, not to raise the take-home pay of workers or contractors who have low skill levels but, in many cases, to make it almost impossible for them to find jobs. That is what this legislation will do. The really low-skilled workers will be locked out of the workforce, and the honourable member from the National Party who preceded me, Michael Woodhouse, made that point pretty well.

The tragedy of all this is that if there is a choice of employment, low-productivity workers can usually raise their skill levels and their productivity with job training, to a level where they will get an increase in income to match that increase in productivity. With minimum wage legislation they are effectively barred from employment in the first place, and that is what we see for so many people. Given that many of our young people are effectively barred from job training in this way, it is little wonder that we have the problem of youth unemployment. Because of that, it surprises me that the Māori Party would vote in favour of this legislation. I am surprised because it is often Māori who are the most disadvantaged in this way.

The major reason for this minimum wage legislation that we have heard in this debate is that there is a fear that, in its absence, employers would be completely free to dictate the levels of wages paid. We have just heard that argument from the previous speaker, Lynne Pillay. However, we must accept the reality of the situation. Employers and others will pay a worker relative only to his or her level of productivity. Wage levels that are below workers’ productivity will be pushed up, so if a worker has a productivity level of $30 an hour and he or she is on $15 an hour, then the market will ensure that those wages get pushed up. Wage levels that are higher than the level of productivity will be pushed down by employers who are, I agree, self-serving. If workers have a productivity level of $10 an hour and they are on $20 an hour, their wages will be pushed down over time.

Members can take the example of an employee who creates value of $15 per hour and is paid $10 an hour. The employer is making an extra profit of $5 per hour out of that employee as he or she toils away hour by hour. This sounds bad for the worker, but it is a situation that rarely exists in the real world. Even if it did exist, it would not last for long. That is the point. The market would look after it. That situation would not last long, because another employer out there would like to make a profit from that worker. So the employer would pinch the worker who is being underpaid and take that person into his or her own employment. The passing of a law such as this says that if a firm hires a worker, it must pay, let us say, $13 an hour, even if that worker’s productivity is only $10 an hour. Will those people now find a job? The answer is that some might but most will not.

Katene RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this

I want to let it be known that the Māori Party feels so strongly about the Minimum Wage and Remuneration Amendment Bill that we are not only using our own votes, we are co-opting members from outside of the House to vote with us. We are very clear about the need to do all we can to support whānau ora and to ensure that all whānau have the opportunity to set and achieve their ambitions in education, employment, health, housing, and so on. We are very pleased to take a call to support this bill as a component of building whānau ora in Aotearoa. It gives legal muscle to the principle of a fair day’s pay for a fair day’s work.

There has been a considerable amount of debate on the bill so far, with lots of point-scoring backward and forwards, but the actual matter at hand is very simple: all workers should have the right to minimum wage protection. In the current economic situation of decreasing job security and increasing living costs, it seems more important than ever that all workers be guaranteed at least a minimum wage and all whānau be guaranteed a level of income that allows them the chance for whānau ora. The economic cards seem stacked against whānau at the present time. The price of petrol has increased by 39 percent in the last 5 years, the price of food has increased by 22 percent in the last 5 years, and there are 33,700 more people out of work than this time last year, 11,200 of whom are Māori. In fact, the unemployment rate for Māori has rocketed up from 8.9 percent to 12.6 percent in the last 12 months.

Wages continue to be low. The median weekly income for Māori is $500 per week, which is the average wage, while the median wage for Pākehā is $575 per week. We remain in a situation where almost half of New Zealand taxpayers earn under $25,000 per annum. This translates into too many whānau living in significant hardship, including, according to the Social Report 2008, 16 percent of the children in New Zealand. That is the context that I urge members to consider in this debate. We also know—and this is backed up by local and international research—that the ability to earn a decent wage is important in order to combat not only the reality of poverty but also the social and cultural disconnectedness that economic violence brings in its wake.

With job security plummeting, the need to establish an official poverty line and set a date for its elimination is more critical than ever. Changes in the minimum wage over the last 10 years—from $7.55 in 1999 to $12.50 in 2009—have been hugely important in offsetting inflation rates over that period. Because all whānau are subject to inflation, all workers and their whānau need the protection of minimum pay rates. Tēnā tātou.

Sio SU’A WILLIAM SIO (Labour—Māngere) Link to this

I thank the member of the Māori Party Rahui Katene, who spoke in support of the Minimum Wage and Remuneration Amendment Bill. I acknowledge the work and effort that my colleague Darien Fenton has put into the bill. It is an important topic as many communities throughout this country of ours, and particularly my neighbourhood, are seeing the effects and impact of the recession. The new schedule 2 of the Minimum Wage Amendment Act on Supplementary Order Paper 4 lists a range of jobs that people are doing out of desperation at this point in time.

I have difficulty listening to some members from the other side of the Chamber, because they are on one track in terms of the arguments they are presenting. One member asked why the bill had not been introduced by the previous Labour Government. I tell the member that it was introduced under the Labour Government, in 2006. People need to know that that Labour Government was a minority Government. At the end of the discussion on that bill it was unable to pass through the House, because of objection from not only the National Party but also other members who are no longer in this House.

Guy Nathan Guy Link to this

New Zealand First?

Sio SU’A WILLIAM SIO Link to this

Yes, that is right.

Sio SU’A WILLIAM SIO Link to this

Say it! New Zealand First—your coalition partner.

I heard Mr Peachey, a wonderful member who believes that he should have been the Minister of Education. I also believe that he should have been. He said that the electorate has spoken. I suspect that comment has to do with the feeling National members have that, now that they have won the election, they can do anything they want. I ask members of the public who are listening whether this is the kind of Government they expected. In the 5 months that those members have been in Government—they went on holiday for the other month—they have shown some arrogance. They have shown that they are prepared to push things through without allowing people to have their say.

I think that if National members looked into their heart of hearts, they would recognise that this issue is about the protection of vulnerable workers, vulnerable people, during a vulnerable period of our history. The International Labour Organization has a saying it has promoted for years that poverty anywhere threatens wealth everywhere. I will repeat it, just in case members on the other side of the Chamber could not hear me: poverty anywhere threatens wealth everywhere. Those members are unable to see the big picture. This is not about shedding crocodile tears; this is about being genuinely and sincerely concerned about the state of affairs that many of our communities are experiencing.

In Māngere, as of March, 1,098 people were unemployed, of which 381 were between the ages of 18 and 24. A bigger group of 717 were between the ages of 25 and 64. If those workers were in a contractual relationship for services—as listed in new schedule 2—then they would be in a vulnerable position in negotiating a fair wage, because they do not have this minimum protection. It might be OK for young people to say to their employer that they will deliver the leaflets or pamphlets for $25 a month; they can say “Stuff you!” to the employer and do something else, because they will be looked after by their parents. But elderly folks with children to look after and a mortgage have some concerns. We should remember the 6,300 local government staff in the Auckland region who are already threatened with redundancy and do not know what their future is. This is why this bill is quite important. It provides some basic protection for workers who, through no fault of their own—maybe out of desperation, because of these difficult times—need some protection in order to get a fair deal for the work they do.

I say to members on the other side of the Chamber that there are questions they need to answer. Firstly, is there a need to protect vulnerable workers? Members on this side say yes. Secondly, do New Zealanders of all heritages want jobs at this time? The answer is yes. Thirdly, do New Zealand workers in these sorts of job situations want a fair wage? Again, the answer is yes. Unless members on the other side say no to those questions, then I have to question their arrogance in continuing to say that this bill is a bad bill. It is a good bill. It provides protection for people who need protection in these difficult times.

People will be watching the Government tomorrow—Budget day—to see whether it is prepared to provide jobs with incomes that can sustain workers and their families. I say let us wait and see. Our expectation of this Government is that it will not deliver on that—going by the answers it delivered to questions asked earlier today in respect of promises that it has potentially broken. It is disgusting. If I were a National member, I would consider quitting the National Party now. I see my friend Mr Bakshi on the other side; he should quit the National Party now. Tau Henare, who should have been the Minister of Māori Affairs, should quit the National Party and join the Māori Party in order to give some support to the people who want protection in this day and age. Thank you.

Henare Hon TAU HENARE (National) Link to this

Let us put a few more things straight for young Darren Hughes. Sue Bradford was mentioned in the debate today. I will go on the record to say that she, out of most people in this House, has the record of working at the coalface with unemployed people. I have not seen any other Labour members working at the coalface with the unemployed for as many years as Sue Bradford has been working there.

This is all about having a choice. If someone was a worker, if someone was a young person, or if someone did not have many skills but wanted to get on the ladder, and if the Minimum Wage and Remuneration Amendment Bill was to go through, then that person would have a choice. Such people would have a choice of unemployment or a job; the Labour Party wants to guarantee young people a choice. But those young people could say “Oh, bugger it. I think I will just stay on the unemployment benefit.”, because this bill does not do anything for their dignity. It does not do anything to help them up; it does not do anything to raise their expectations and to get on that first rung of the ladder.

I add another point. We are not talking about people who post pamphlets for a living; we are talking about most people who post pamphlets as a top-up to what they earn, whether on the benefit, through a part-time job, or what have you. It is not an argument between socialism and the great capitalists. It is not an argument between nouveau communists, including some people on that side of the Chamber, and maybe the nouveau capitalists on this side. It is about the real world versus fantasy. It is about the real-world lives of so many young people and of a few of the elderly. I am telling members now that if this Minimum Wage and Remuneration Amendment Bill goes through, those people will not have the option, because so many employers out there will not be able to afford it.

There was an accusation from Maryan Street that I was a supporter of slavery. I am an indigenous person who is accused of being supportive of slavery; that is what the implication was. But this bill is not for every worker. This is all about the independent contractor. When we talk about history, I ask why the Labour Party always likes to put its own paint job on history. It is because that party cannot face up to the fact that under Lange, under Palmer, under Moore, and under Clark there was no such thing as a minimum wage for independent contractors. There was not a whisper or a murmur about the minimum wage for independent contractors.

So why do those members now come snivelling in front of this Committee, thinking they are the defenders of workers’ rights? They are here only to defend their own form of capitalism. It is called the bourgeoisie, the intelligentsia—that is whom Labour represents. Labour wants to protect its own rung on the ladder. The bill is not about workers’ rights, at all; it is about Labour’s rights. It is about making victims of every little person in society. I tell members now that there are individuals out there who want to get ahead, and they will get ahead under this Government. They will never get ahead under that outdated, outmoded philosophy that smacks of Joseph Stalin and his “commo” mates.

GRANT ROBERTSON (Labour—Wellington Central) Link to this

It has been an entertaining evening of political philosophy from the member who has just resumed his seat, Tau Henare. We had some linguistic lessons from Mr Peachey, but the political philosophy lessons from Mr Henare were remarkable—remarkable in their ignorance, and remarkable in their ability to draw in all kinds of irrelevant material when there is a very simple question around Part 2 of the Minimum Wage and Remuneration Amendment Bill. Do we think New Zealanders deserve a fair day’s pay for a fair day’s work? Members on the other side of the Chamber might like to answer that very simple question. Do New Zealanders deserve a fair day’s pay for a fair day’s work? This bill aims to achieve just that.

We have had all kinds of comments from across the Chamber in this debate about people’s choice. Dr Graham Scott is a contractor and has a choice. He can charge the National Government $2,000 a day for Budget purchase advice. He charges $2,000 a day. That is outrageous. He does not need the protection of this kind of bill; the people whom this bill sets out to protect are vulnerable workers who are not getting the minimum wage and who need some kind of statutory support.

The new clause 7 introduced by Darien Fenton on Supplementary Order Paper 4 mentions prescription of minimum remuneration, and the new schedule 2 lists who should get that remuneration. Let us look at some of those people. They work in building and construction services, cleaning services, courier services, food catering services, and fast-food delivery services. They are not people who earn $2,000 a day. They are people who deserve the right to a fair day’s pay for a fair day’s work. Under the current law, that is not necessarily happening. I congratulate Darien Fenton on her proposed new clause 7 and on the parts of her Supplementary Order Paper that would increase the minimum wage over time.

It is difficult for me to sit here and be lectured by Mr Henare on the minimum wage and on who increased it. In the 9 years of National Government in the 1990s, it increased the minimum wage. How much do we think it increased the minimum wage by in 9 years? It increased it by 87c. Under Helen Clark’s Labour Government the minimum wage increased every single year. Every single year the minimum wage went up. Members on this side of the Chamber can stand proudly and say they support increasing the minimum wage. That is why I support the new clause from Darien Fenton. On the other side of the Chamber there has been no commitment to the minimum wage.

If we listen to the speeches that have been given during this debate, we see it is quite clear that the philosophical views of members on that side of the Chamber are against the minimum wage. I actually congratulate Sir Roger Douglas, because at least he is honest enough to get up and say that he does not believe in the minimum wage and that he thinks it is bad for the economy. I totally disagree with him, but on the other side of the Chamber, crocodile tears are being shed. National members quite clearly do not believe in the minimum wage. They do not believe in setting this kind of fairness and benchmark. Instead, we hear their claim that they have increased the minimum wage by 50c this time round. Under the previous National Government it increased by 87c in 9 years. That was in the 1990s when the wage gap between Australia and New Zealand increased as a result of the Employment Contracts Act and the kinds of initiatives the National Government thinks is right. The Government is not interested in providing the kinds of wages that allow people to live with dignity. We have seen that time and time again from National, and we see it again from this Government. We know that it does not support increasing the minimum wage in the way this bill intends.

Today is a very interesting day; it is the day before the Budget and the day before we see what this Government will prescribe. Does it care about jobs? Does it care about the minimum wage? No. Today in the general debate all we heard about was boy racers. It is an important issue for sure, but on the day before the Budget we should be hearing from National about what it prescribes to keep people in work. I have just heard that another 70 jobs have gone at the Accident Compensation Corporation. The total number of jobs lost in the public sector is pushing over a thousand, and it is this National Government that is getting rid of them. It does not care about keeping people in work; it is putting people out of work. It is not interested in increasing the minimum wage.

Peachey ALLAN PEACHEY (National—Tāmaki) Link to this

I am grateful to have the opportunity to continue my contribution to the debate on Part 2 of the Minimum Wage and Remuneration Amendment Bill. I note with interest that the previous speaker, Grant Robertson, did not seem to appreciate that he really needed to debate this part of the bill if the debate is to continue any longer.

I acknowledge my colleague from Auckland, Mr Sio, who, unlike so many of his colleagues, attempted a reasoned and fair approach to the debate. By and large it has been a good debate, with ideas flowing freely across the Committee, which is how it should be. But Mr Sio finally hit the nail on the head. The difficulty Opposition members have had in debating Part 2 is that they actually cannot debate it. They are not prepared to confront the word “prescribed”, which, as I have already said in this debate, occurs three times in three and a half lines, five times in three clauses, and again in proposed new section 6A. The difficulty that Labour has is that, until Mr Sio spoke, it did not adequately address the question of why, if this bill and these clauses in Part 2 are so important to Labour, it did not address them when it was in Government.

Hipkins Chris Hipkins Link to this

So much other good legislation.

Peachey ALLAN PEACHEY Link to this

I have long wondered what Mr Hipkins’ role is in the Labour Party. Now I realise he is there to make Mr Hughes look old. That is his sole function, and it is good that they sit together in this Chamber.

I will come back to my point. The reason Labour chose not to continue to pursue this bill when in Government was finally revealed. If members listen to what Labour members say they have to draw the conclusion that Labour let down their heartland supporters—those workers who through generations of family, come good or bad, voted Labour. Why did Labour do that? It did so because it chose instead to give the baubles of office to Winston Peters. That, in effect, is Labour’s explanation for why it did not die in a ditch and make the ultimate sacrifice for people who for generations and through families voted for Labour. I would think that the lower-paid workers in this country will be reflecting on that tonight and reflecting that the previous Labour Government would rather have given Winston Peters somebody to open the door of his chauffeur-driven car than have kept faith with its core supporters. It will not be lost on those people that it was the National Government that acted so quickly and so decisively to boost the minimum wage. That was even after the previous Government’s Minister of Labour, Mr Mallard, said in this Chamber that he did not have enough money to increase the minimum wage. Is it not interesting how keen those members are to spend other people’s money, and to structure clauses in Part 2 that are clearly unworkable. It is important that this bill be defeated, and I suggest to this Committee that it defeat it now.

Street Hon MARYAN STREET (Labour) Link to this

I have a couple of points relating to the earlier contribution by the member Ross Robertson, who has recently resumed his seat—not the last contribution, because it was almost unintelligible. The speech that the member made earlier referred to the fact that the 1983 Minimum Wage Act was brought in by a National Government, under Prime Minister Muldoon. It is always interesting to reflect on how selective people are about the history that they choose to repeat.

There are two points I want to make about that statement, in particular. The 1983 Minimum Wage Act does exactly what my colleague Darien Fenton outlined earlier. It was put into the context of a different industrial relations regime from the one we have now. In fact, it quite specifically refers to awards, collective agreements, determinations, or contracts of service, and it talks about structures in industrial relations that existed in the 1980s but do not exist now. The other point to make is about the context of that Act. I wonder whether my colleagues can remember something else that was happening in 1983—in fact, it went on from 1982 to 1984. Mr Peachey may have conveniently forgotten it. It was the wage and price freeze that Sir Robert Muldoon brought down in the middle of 1982. So to bring in a Minimum Wage Act in 1983 was almost meaningless, because there was no provision for any movement during that period. It was not until a Labour Government was returned in 1984 that we saw any wage movement, as that freeze first had to be taken off. Sir Roger Douglas will remember those days, I am sure.

However, the other point is that the Minimum Wage and Remuneration Amendment Bill does not seek to increase the minimum wage. It simply asks for the minimum wage to be applied to contracted workers who are not currently receiving it or who can, through various means, not be paid the minimum wage. That simply corrects an anomaly that has emerged over time. There should not be any demur from members opposite about the need to ensure that the minimum wage is exactly that across all sectors of the economy, because it ends up being the final safety net for wage earners around the country, in whatever industry or occupation they happen to be.

An additional point is that we did hear from Mr Woodhouse some of the same old arguments we always hear when we come to discussions about the minimum wage, which are that any increase to the minimum wage equates to a loss of jobs, and that we are taking jobs away from the most vulnerable workers, instead of trying to support them. That is nonsense. Historically it has been proven to be nonsense, but it is the sort of nonsense that is trotted out in times of tight labour markets and economic recession. It is constantly trotted out, but we never hear it being argued in times of upward cycles of economic good fortune. The fact that this Parliament ought to be standing here, collectively and jointly, to support the most vulnerable workers by ensuring that there is a minimum wage below which they cannot fall is something that should be held in common by members of all parties in this Chamber. I welcome the comments of the Māori Party in that respect, because they know as well as anybody does what it means for someone to be a vulnerable worker.

This bill simply seeks to apply a minimum wage provision across contracted workers who have emerged through various kinds of industrial relations devices to fall below the statutory minimum wage. Thank you, Mr Chairman.

Hipkins CHRIS HIPKINS (Labour—Rimutaka) Link to this

After listening to Allan Peachey, I was reflecting on his role in the Chamber as he has been reflecting on my role. I have decided that perhaps his role is to make Chris Auchinvole look dynamic and articulate. I cannot think of anything else that he contributes to this Chamber.

Michael Woodhouse Link to this

You will be in detention.

I will be in detention. This bill, the Minimum Wage and Remuneration Amendment Bill, frankly, is a pre-Budget test for the Government. Do Government members really care about the people on the lowest incomes, at the bottom of the heap, who are not earning even the minimum wage, ahead of the Budget, in a very tough economic climate, or do they not? That is fundamentally what their vote on this bill will determine. Are they interested in the people at the bottom of the heap, or are they not? We have not seen any evidence from Government members since they were elected in November that they are interested in the people who are earning the lowest incomes and who are the most vulnerable. The very first thing those members did when they came into Government was to take away those people’s tax cuts and give them to the people at the highest end of the income spectrum.

But Government members have done one thing when it comes to the minimum wage, and I will give them credit for that. Just recently they increased the minimum wage very mildly, minimally, by $3.72 a week. That is not a heck of a lot, when we consider the current economic climate. This Government, today and tomorrow, going into the Budget, has an opportunity to signal to vulnerable workers, people who are earning modest incomes, whether it cares about them.

We’re on Part 2.

Garrett David Garrett Link to this

I will speak to Part 2. The very first part of Part 2 inserts the word “remuneration” after “minimum wage”. This bill is about dealing with overall remuneration, not just the minimum wage as it stands now, and extends it to contractors. It says that people who are currently working on a contract for services should be entitled to a fair day’s pay for a fair day’s work, which they are not getting at the moment in many, many instances. During the first part of the discussion on the bill, I checked through some of those contracts for service. The pizza delivery boys are not getting a fair day’s pay for a fair day’s work. I used a pizza delivery firm the other day, and I had cause to think about the fact that the delivery boy—

Did you give him a tip?

Michael Woodhouse Link to this

I did. I gave him a very generous tip. It was more than the minimum wage. So there we go. It was a terrible, miserable rainy night and I decided that the pizza delivery boy had earned it so I gave him a big tip. Those workers probably are not earning the minimum wage. Under the current law they do not have to be paid the minimum wage, nor do the people who deliver the newspapers that clutter up our letterboxes, whether or not we like those newspapers, nor do the cleaners. There are an increasing number of cleaners working under a contract for services.

Perhaps if you offered pizza during your clinics, more people would turn up.

That is right. Has the member been reading Twitter? It is good to see that the Government backbenchers are well occupied. Areas of work where contracts for services are used also include courier services. We know that a number of people in courier businesses are struggling at the moment, for a variety of reasons. Building and construction services are also included. To return to a point that I have already raised, why should one of two workers on a building construction site earn less than the other? One earns more than the other simply because one is an employee and one is a contractor. One does not earn the minimum wage, and one does. How is that equitable? The amendments proposed by my colleague Darien Fenton help to address that issue.

I want to talk also about Supplementary Order Paper 4, which Darien Fenton has put forward, regarding a commitment to increasing the minimum wage—moving it up to $13 an hour, effective from 1 July this year, to $14 an hour from 1 July 2010, and to $15 an hour from 1 July 2011. For somebody who is sitting in this Chamber, $15 an hour probably does not seem like a heck of a lot. I think just about everybody who works in this building would earn more than $15 an hour, except for maybe the cleaners if they are contractors. It is not a heck of a lot of money.

Sitting suspended from 6 p.m. to 7.30 p.m.

Prior to the dinner break I was talking about the addition of the word “remuneration” to the title of the bill. In studying the definition of remuneration, I draw members’ attention to, in particular, Supplementary Order Paper 4, which has a more comprehensive definition than the original bill does and I think it adds quite a lot of value. It is important to note that the intention of this bill is to extend the application of the minimum wage and minimum income beyond those who earn a wage to include contractors, as well. Adding the word “remuneration” to the title does that, because it is clear that the dictionary definition of the word “wage” does not adequately capture it. By adding the word “remuneration” to the title, we more adequately capture the spirit of what the bill is trying to achieve.

National members have talked a lot about compliance costs, and a lot of their objection to the bill appears to be on that basis. It is probably fair for us to assess whether that is a valid concern to have, so I looked at Supplementary Order Paper 4 to find out what sorts of compliance costs this legislation would add to businesses. Under new clause 8A, inserted by Supplementary Order Paper 4, the main compliance cost would be the requirement for employers to keep records. What sorts of records would they be required to keep? They would be required to keep the name of the specified person. I cannot see how that would add any additional compliance cost to employers, at all. I would be very surprised to learn of an employer, or of someone contracting a person, who did not record the person’s name. So that would not add any compliance cost. An employer would need to record the person’s postal address. Presumably, if any form of remuneration was involved, the employer would have the person’s postal address, so there would be no additional compliance cost. Employers would need to record the kind of service that the specified person is engaged to provide. I would be flabbergasted to learn that any employer who provided that information incurred a compliance cost. I do not think that a single business in the country would engage a contractor without specifying the kind of service the contractor was to provide. So there would be no additional compliance cost there.

Employers would need to record the hours during which the specified person provided the service. That would probably be something new for employers—they would need to record the hours—but I cannot see that it would be a huge compliance cost. I cannot see how that would add a compliance cost. They would need to record the remuneration paid to the specified person for the service, and the method of calculation. Odds are that the person’s contract would record that kind of information anyway, so, really, there would be no significant increase in compliance costs for a business. Compliance costs appear to be National members’ fundamental objection to this bill, but we have gone through the bill and disproved it. There would be no huge increase in compliance costs.

What the legislation comes down to is a fundamental, philosophical commitment as to whether people should be entitled to a fair day’s pay for a fair day’s work. We on this side of the Chamber say that they should, and that it should not matter whether a person is a contractor or an employee. People should get a fair day’s pay for a fair day’s work—that is the Labour Party position. The National Party position is not to support that—it is that contractors are on their own, and that if they are earning only $2 an hour, then that is their problem because it is a free market, they have choice, and they can go somewhere else. Well, they do not really have choice, at all. The choice is either to take the $2 an hour or to take nothing. We do not think that that is fair. We think that people who are contracted to provide a service should be paid at least the minimum wage. New section 5A, inserted under new clause 7B in Supplementary Order Paper 4, provides for a comprehensive review of the minimum rate of remuneration after 3 years. That is a fair thing to do, as well. Obviously, costs go up, and a variety of factors might impact on the minimum wage, so it should be reviewed after a period of time.

One other objection that National members may raise relates to people who might work overly long hours, spin out jobs so they take longer, and therefore increase the costs involved. Actually, there is a protection for employers to stop that happening. I draw members’ attention to clause 11AC, inserted by new clause 9A in Supplementary Order Paper 4, entitled “Specified person may not recover minimum remuneration for time that exceeds agreed reasonable time to provide service”. If it is clear that someone is simply spinning out a job in order to increase the amount of money he or she can be paid, then the employer or business has recourse not to pay for that. The clause is an additional protection for the employer and removes another of the National Party’s possible objections to this bill.

Really, I cannot see that National members can have any other legitimate objection, unless their objection is to the idea that people should be paid a minimum wage. They should be honest about that. Roger Douglas is very honest—he does not support having a minimum wage. He does not think there should be any specified minimum wage.

IAIN LEES-GALLOWAY (Labour—Palmerston North) Link to this

It is a great privilege to take a call on Part 2 of the Minimum Wage and Remuneration Amendment Bill. We have heard a lot this evening from Government members about choice, and that is exactly what the amendment to add the word “remuneration” after the word “wage” in the title is about. So many people are unable to choose to take a waged job. The only thing available to them is a contract-rate job. Whether it is delivering pamphlets or undertaking home help, there is a whole range of low-paid work that is offered, under the guise of choice, in a contract-type arrangement rather than as work that offers a paid wage and that has all the benefits of protection, holidays, and recourse if one’s employer treats one incorrectly or inappropriately.

We get from the right the old chestnut of choice—such as the Work Choices arrangement that Australia so thoroughly rejected not long ago—and, as we have talked about, it comes down basically to a philosophical argument.

If you like it so much, leave!

I have no desire to go to Australia. The member can head off there if he wants to.

Stop talking about how wonderful it is.

Adams Amy Adams Link to this

Actually, I was not talking about how wonderful it is. I was talking about the appalling legislation, under the guise of Work Choices, that Australia had. I have no intention of heading to Australia. New Zealand’s Employment Relations Act is excellent legislation, and long may it remain as it is without being watered down by this Government. Hopefully the Labor Government in Australia can steadily unwind the Work Choices legislation over there. I certainly would not head over there in a great hurry, given the type of employment legislation there.

That’s a shame.

Adams Amy Adams Link to this

Ms Adams probably thinks that is a shame. It must be a real pity to have to put up with having me on this side of the Chamber.

It is.

I bet it is a real pain for National members to have a team such as Labour standing up against them every single day. It must get depressing.

This bill is so necessary in order to give rights to those who are not able to choose a wage-bearing job and have to do contract work. Those people have so few rights. All the rights they would choose to have are taken away from them because they cannot get into non-contract work. This bill is absolutely necessary to provide a baseline of fairness to those people. They need some kind of fairness in their work situation and in their contracts. At the moment, without legislation such as this, there is a distinct lack of fairness. Fairness is what we need to see in jobs in this country. We need to see a Government that is committed to jobs, and we need to see a Government that is committed to fairness in its employment relations legislation.

The bill as a whole is about protecting workers in hard times. It is important that all workers, even in an economic downturn like this one, are afforded a fair working environment and have an opportunity to earn a fair living wage. We have so many people on low wages who are unable to make ends meet, and that situation will get harder and harder in these economic times.

The bill sets out a pathway for moving towards a $15 minimum wage. That $15 is not just an amount picked out of thin air—

Yes, it is.

Hipkins Chris Hipkins Link to this

It is not an amount that is picked out of thin air. If Mr Henare knew anything about the International Labour Organization, he would know that that organisation sets a benchmark of two-thirds of the median wage for the minimum wage. In New Zealand that is a little more than $15, but $15 is a reasonable rate that this bill will set us on a pathway towards. It is about fairness.

Fenton DARIEN FENTON (Labour) Link to this

I will address Part 2 of the Minimum Wage and Remuneration Amendment Bill, and again thank members for their contributions to the debate. I think everybody has enjoyed this debate. It has made it very clear where National and Labour stand in their position on this issue, and for those listening I think that that has been very useful. Again, I acknowledge Roger Douglas. His position has not changed for years and years; there is nothing surprising there. I also acknowledge the Māori Party, which, along with the Greens, has consistently supported the bill. Māori Party members understand what the problem is.

We have had some great, grand quotes tonight from Tau Henare, so I thought I would join him by quoting from the United Nations Universal Declaration of Human Rights. New Zealand was one of the first countries to sign up for the declaration. I know that National members have problems with anything to do with human rights, but let me tell them what the declaration states. It states that “Everyone who works has the right to just and favourable remuneration ensuring for himself and his family”—we must remember that this is from the 1940s, so the language is not gender-neutral—“an existence worthy of human dignity,”.

Since then the United Nations and the International Labour Organization (ILO) have brought in the ILO’s Decent Work Agenda, which our Government has signed up to. That same idea of decency, fairness, and just remuneration is also reflected in the Decent Work Agenda. The work of the ILO and others throughout the world has been to recognise that there are people who are now economically dependent on the sale of their labour. But because of the changing workforce and changing marketplace over the last 10 to 15 years they find themselves beyond the protection of the current minimum wage and other legislation.

The ILO addressed that issue in its discussion on employment rights a couple of years ago. The report was The Scope of the Employment Relationship, and the organisation specifically addressed that issue and the fact that so many workers are now falling outside the traditional employer-employee relationship. During this debate one of my colleagues talked about the situation where, as time and pressure go on, employers often find ways to circumvent the employer-employee relationship.

We now have various forms of contracting, as well as casualisation and a range of non-standard work. This is a new area of work, and I say to all those members on the Government side who I believe have denigrated the work done in the select committee on the bill and also done by me over many years, because I am passionate about this area of work, that it is a challenging area. It is something we have to think about. Other jurisdictions are thinking about it, as well. Some have implemented changes to their legislation to recognise the changing employment relationships. This is an area that will not go away; it will continue to be a problem for workers who are employees in jobs, where there is an alternative to an employer-employee relationship and where an employer can contract out or employ a contractor on less pay, which puts pressure on our wages.

As I speak I bear in mind National’s election promise to do something about equalising the wages between ourselves and Australia. That was an election promise. If the National Government does not address the issue then we have a problem.

It was an ambition.

Fenton DARIEN FENTON Link to this

That was one of National’s ambitions. I will also address Supplementary Order Paper 4, and I thank my colleague Chris Hipkins for going through some of the detail of that Supplementary Order Paper. I was going to do that, but I think it is probably beyond the understanding of most of the members on the Government side. It is very technical, and we put a lot of work into it.

Bennett David Bennett Link to this

Put work into it? It’s three pages.

Fenton DARIEN FENTON Link to this

We put an awful lot of work into making it possible. I tell David Bennett, who was on the select committee, to go through the report. That member went through those amendments, as well, but he has rejected them out of hand because of ideology.

I will address the issue of the $15 minimum wage. Even though the recent increase in the minimum wage by the National Government was the smallest increase to the minimum wage we have had in years and years, I know that the workers who would benefit from this bill would welcome it. They would be pleased to get $12.50 an hour. At the moment they are not getting $12.50 an hour; they are getting $3 or $4 an hour, and in some cases as little as 25c an hour.

John Key, when he addressed the issue of the minimum wage, said that not having any rise would have left the most vulnerable workers with no increases to offset the costs of living. But, obviously, there is a difference there: National does not think that increase should apply to all workers; it applies only to those who are called employees. That is a very safe position. It is a kind of “get out of jail free” clause, whereby if a worker is not an employee, then that worker does not have any rights. As I said, this area needs to be addressed.

The Minister of Labour, Kate Wilkinson, I have to say, has treated this whole bill as a joke, and I deplore that. Her answer to one of my questions suggested that Kiri Te Kanawa would be on the minimum wage. Well, that is ridiculous. It is a disgrace. Does the Minister not understand what the word “minimum” means? The word “minimum” means the least quantity assignable, admissible, or possible, which is what this bill is about. With the Minister’s logic, all of those well-paid people in John Key’s office would be on only the minimum wage, but that is not what this bill is about. We also know that the Minister was done over in the minimum wage debate. We know that she did not want the minimum wage to go up; she wanted to keep it at $12 an hour, but she was rolled.

There was advice from several departments, including Te Puni Kōkiri, and a letter from the Minister of Māori Affairs—good on them—asking for a $15 minimum wage to be implemented over 2 years. That is what this Supplementary Order Paper will do. But those departments were ignored. The matter has become even more urgent in this recession. It is Labour’s view that in a recession we have to look after the most vulnerable, which is what this Supplementary Order Paper will do. The fact that the highest paid, the top 3 percent, got the biggest tax cuts, or most of the tax cuts, and the lowest paid got nothing, makes the situation even more unfair. It is well known that the lowest-paid people and people on the minimum wage spend all of their income. They do not have discretionary income for luxuries like trips overseas and extra cars; they spend their income on essentials, like fruit for the kids in their lunch packs, milk, and so on.

I am also, as I have said, very interested in the commitment to close the wage gap with Australia. I understand that it will take an increase of 2 percent, on top of ordinary wage movement, for the next 10 or even 20 years for us to catch up with Australia. The Australians have a minimum wage of $18 an hour, so we are already far behind. They also have legislation like this bill for dependent and independent contractors that makes sure they get decent pay and decent work. They are not expected to work for nothing.

Labour says that in these really hard times it is the lowest paid who should take precedence. This sort of legislation is also very important in Australia, if we look at what has happened in the textile, clothing, and footwear industries there. This sort of legislation has helped to deal with the rise of the underground and sweatshop economy in Australia. Do we want that economy growing here? It is out there; people are doing jobs outside the law. I mentioned some of the workers before, but I have not had an answer from National members about how they would deal with pizza delivery workers or caregivers. I could go on; I have talked to many, many workers in the course of developing this bill. I talked to many workers about their situations. This legislation has not come off the top of my head; it came about because people were saying there is a problem.

Finally, I reflect on the Minister’s comments about Kiri Te Kanawa, and note that when this bill was debated while going through its second reading last year there was support from the New Zealand Actors Equity and the Musicians Union. The Actors Equity said that the poor pay and conditions of many actors are not commonly known, and that because actors are classed as dependent or independent contractors they are expected to work for a whole lot less than workers who are employees. The Musicians Union said that New Zealanders celebrate New Zealand Music Month and New Zealand music, but what is not on show is the poor pay of many musicians, who, because they are classed as dependent or independent contractors, end up getting a whole lot less than the minimum wage.

I want National members to understand that the reason why musicians, actors, and performance workers are included in this bill is that they requested to be included. We rely on those iconic workers when we celebrate the national identity of New Zealand. Those workers asked me specifically to include them in this bill, along with all of those other sorts of workers who are not plumbers or painters. I tell Tau Henare that leaflet deliverers are just one group covered by the bill.

Chauvel CHARLES CHAUVEL (Labour) Link to this

I start my contribution to the debate by paying tribute to Darien Fenton for this legislation, the Minimum Wage and Remuneration Amendment Bill. As she said, there is a problem with our law at the moment in this area. This bill would go a long way, if passed, towards dealing with that problem. Before I came into Parliament I practised in the area of employment law. In fact, I started my career in that area working with Darien at what was then the northern hotel, hospital and related trades industrial union of workers.

Grant Robertson Link to this

Were any of them there?

Chauvel CHARLES CHAUVEL Link to this

That was a long, long time ago, even before Mr Robertson was born, I think. We learnt at that time that there was significant potential for exploitation in the workforce in New Zealand by the ability to use the legal arbitrage of the distinction between an employee, on the one hand, and a contractor, on the other. There are several of those loopholes in New Zealand employment law. I know that Mrs Collins knows about them, because she has come across them in her time in practice as well.

Another area where our law is not terribly sophisticated and probably needs to be looked at, in the same way that Ms Fenton’s bill would do, is the area of offshore jurisdiction. An offshore company can come to New Zealand, and, provided that it maintains some sort of connection to another jurisdiction—a foreign jurisdiction—it can actually set up employment relationships under the laws of that jurisdiction in New Zealand, and which our employment institutions would have to enforce as legally binding on employer and employee. So there are some areas in our employment law, like this one, where one can use the arbitrage of contractor versus employee, and like the one that I have mentioned where one can use some sort of connection with a foreign jurisdiction to avoid New Zealand terms and conditions. That often happens in the transport industry, for example. It happens increasingly with the employment of foreign executives in New Zealand under terms and conditions often based, for example, on the law of New South Wales. The employee or employees concerned are employed by foreign corporations operating in New Zealand.

We have a system in New Zealand that is, in some areas of employment law, surprisingly unsophisticated. This is one, and there are others. Why should we have a system in New Zealand where people can use the ability to re-categorise a person doing exactly the same work as an employee as a contractor and pay that person a whole lot less, just because the person is in no economic position to object to that re-categorisation? Is that the sort of arbitrage on pay and conditions that we want to see in this country? Is that how we want to see enterprises be competitive? I would not have thought so.

Chauvel CHARLES CHAUVEL Link to this

What was that word?

How it works, I say to Mr Henare, is that one day a person turns up to work, having been an employee for years and years, and the employer says: “I’m going to restructure the business and I want to make a bit more profit out of it. I want to run it more profitably, and the way I’m going to do that is I’m going to get you to incorporate yourself and your colleagues. You’re going to be contracting to me from now on to do the cleaning in this building. Instead of turning up and being paid $14 an hour, your rate of contracting to this company will be $10 an hour, if you’re lucky.” That is how they save the $4 an hour.

Garrett David Garrett Link to this

And he can say: “Bugger off!”.

Chauvel CHARLES CHAUVEL Link to this

Mr Garrett is showing the typical compassion of his party for the low paid. He says they can tell the employer to bugger off. With unemployment rising now, it is actually really difficult to do that. It is a really hard thing to do. That is why this bill and measures like it, advanced to protect ordinary working people, are supported by parties in this House that actually care about those people. It is good to see that Mr Harawira’s party is doing the right thing by this legislation. It is good to see Mr Henare listening carefully. I hope that he might change his vote on it, as well. It is good to see people doing the right thing and making sure that ordinary working people are protected, because as I have said a number of times already in this speech, we have an employment law system that is not terribly sophisticated when it comes to this sort of thing. In New South Wales in Australia, for example, there are quite a few industries that use contractors but those contractors can unionise, they can get the protections of the industrial agreements, and that is what we should have here.

Hipkins CHRIS HIPKINS (Labour—Rimutaka) Link to this

One of the other challenges that has come forward from the National Party—particularly from Mr Peachey—is that if this legislation were so important, why did the Labour Government not pass it?

You had 9 long years.

Tremain Chris Tremain Link to this

Mr Peachey keeps referring to the 9 long, dark years of socialism. The argument I throw back is that the previous Government was doing a lot of things to make life better for workers. We did a number of things to the minimum wage. We extended the protection of the minimum wage to young workers, in particular. If members opposite look at the minimum wage legislation in the reprinted statutes, which I have to hand, they will see the amendments. There are pages of amendments that extended the minimum wage to young people. I say that was a good thing, and the next thing that we need to look at—

You’re not young any more.

That is right. I am not young enough any more.

The next thing we need to look at is why contractors should not also have the protection of the minimum wage. I turn to Supplementary Order Paper 13, also in the name of my colleague Darien Fenton, which talks about the political commitment to the minimum wage. I actually think that that is really important—

Roy The CHAIRPERSON (Eric Roy) Link to this

Supplementary Order Paper 13 is in the next part of the bill. We are on Part 2.

Grant Robertson Link to this

It is too. That is right. I will come back to it.

I will talk a little bit about political commitment to the minimum wage, because, fundamentally, Part 2 is all about political commitment to the minimum wage, and whether National supports the idea of a minimum wage. It is quite clear it does not, but it is not honest enough to front up like the ACT Party. I give the ACT Party full credit. It does not believe in a minimum wage, and says so. National is not willing to front up and say it does not think there should be a minimum wage. It is not willing to do that. It is not willing to be up front with New Zealanders and say it does not believe in a minimum wage. Why not?

What happened to wanting to close the wage gap with Australia? Do members remember John Key standing in the Westpac stadium before the election—there was a nice little video clip—and talking about the exodus of New Zealanders to Australia because they could get paid more in Australia? The minimum wage is higher in Australia. Are we trying to catch up with them now? No, we are not. The National Party is in Government now. It is one of the things those members said before the election, but had no intention of sticking to once they got themselves in the BMW cars, cruising around enjoying the perks of office. They are not really interested in the lower-income spectrum at the bottom of the heap.

I ask members opposite to take a call and tell us why they do not believe that the minimum wage should be increased. They should tell us why they do not believe in it. National will vote against an amendment that would continue to increase the minimum wage until it gets to $15 an hour, which is still less than the amount recommended by the International Labour Organization. National is not even willing to go to the minimum level recommended by the International Labour Organization. I think that is pretty disgraceful, quite frankly.

All low-paid workers in the country should be aware of the fact that this Government does not care about them. We will see more evidence of that tomorrow when the Budget is read, because, ultimately, this Government is interested only in people at the highest end of the income spectrum. That is why people on the minimum wage lost their tax cuts when National came into Government—so that they could go to the chief executive of Telecom instead. That is disgraceful, and I think it is disgraceful that National will vote against this bill.

Under the last National Government the minimum wage was increased by how much?

87c.

Hodgson Hon PETE HODGSON Link to this

Eighty-seven cents was the total increase in 9 years. What was it under Labour? About $6—[ Interruption] It was over $5 under Labour, and that was over the same period of time.

So it is pretty clear that if people are on a low income, the Labour Party is the party for them. It is clear that National does not really care about them, it is not interested in them—it does not care.

Peachey ALLAN PEACHEY (National—Tāmaki) Link to this

I am reluctant to take a third call on Part 2; however, points need to be made. I am sick and tired of sitting over here, listening to that Labour Party crowd over there rewrite history, when the full truth was revealed in the Part 2 debate prior to the dinner adjournment. It was revealed by Mr Sio.

I noted with interest the comment of the member in the chair that this bill was about looking after the most vulnerable. I would invite that member to reflect upon what she actually said, just as I think that other members opposite need to do a little bit of reflection. They need to ask themselves where the consistency of their line is, on the Part 2 debate, because it became clear at about half past 5 that this was not all about the vulnerable, it was not about the minimum wage; it was about the failure of the last Labour Government to live up to the crocodile tears that we are hearing tonight. That Labour Government, when it had the opportunity, could have hung its hat on a principle but, no, the need for Winston Peters to have a ministerial car, a house, and a self-drive car, and the need for Labour members to keep their baubles, meant that the people whom those members tonight in this Chamber say they care most about were expendable.

Let us come back to Part 2. I come back again to the words “prescribed” and “Prescription”, and I ask where this bill was in 2006, when Labour members were so busy doing their deals with Winston Peters to keep their salaries, to stay in office, and to have the nice cars. This bill was nowhere to be seen. In relation to the people they now claim to care most about—and the young member can take the snigger off his face because what I am saying is true—where was Part 2 in 2006? It was hidden, because Labour had done a deal with Winston Peters. If one good thing has come out of the Part 2 debate, it is that the truth has finally been revealed. Talk about shame—those Labour members should be ashamed of themselves.

Hon STEVE CHADWICK (Labour) Link to this

I am pleased to take a call, especially after that rave from Allan Peachey. I had not heard him before tea, but I thank him for addressing history. The member was not here in those 9 years under Labour, when we were an incredibly busy Government, working on supporting workers’ rights in this House every day that we came down to the Chamber.

I thank Darien Fenton. She is a Kiwi battler. She has been out there working for vulnerable workers and contract workers to make sure that their rights are protected. It was Darien and other members in the House, including Ministers of Labour like Trevor Mallard, Ruth Dyson, and Margaret Wilson, who made sure we addressed the real issues of protecting workers and of giving a decent salary for a decent day’s work.

This Minimum Wage and Remuneration Amendment Bill addresses an anomaly that has been around in labour law since 1983. Labour could not do it all, even in 9 years, because we were addressing a decade when workers had been squeezed to the bottom of the heap, with only an 87c increase in the minimum wage over 9 years. When we got into Government, those people did not even know what the value of a unionised workplace was, or what benefits they could achieve with union advocacy and support working with both them and the employer to make sure that they got a decent wage.

I think it is great that Darien has picked up this little loophole and brought it forward. It is a sad reflection that the Transport and Industrial Relations Committee could not agree, and that was probably because an election was imminent and its members were not prepared to put themselves on the line. At least ACT is consistent in its position on the bill, but I find it absolutely ironic that when we saw the minimum wage being increased by National by, I think, $3.72 a week—a measly $3.72—National members said that they had done it. They said that they had raised the minimum wage, and that was it. I would say that for as long as they are on the Government benches, that will probably be the last time that we see them increase the minimum wage. We will not stand here and do nothing about that sort of inaction and arrogance from the Government of the day.

I think we have to look at the work patterns of contract workers that are outlined in proposed new schedule 2 in Supplementary Order Paper 4. There would not be a person in this Chamber who does not recall informal contract relationships with perhaps a gardener, a person who comes in to do the cooking, a nanny, or whatever worker any member in this Chambers uses, especially now that there is tax relief for the top earners in the country. It is very much those workers who are the most vulnerable, and here we are, sorting it out, with a graduated scale so that they get the protection of a minimum wage moving very gently up, from $13 an hour in 2009 to $15 by 2011. It is not a big ask, but it is too much for the Government to stand. Those members say that they have done it and that they have fixed the increase to the minimum wage rate at $3.72 a week, and those workers are lucky if they can even keep their jobs now.

Tomorrow we will hear about a jobs Budget. I bet we will hear about a jobs Budget. I have to talk about a vaccinator who gave me a flu vaccine. That person said: “I am on the 9-day working week. I am doing this today as a volunteer because my contractor”—who got the contract to do the vaccinations for people like the members in this House—“did not pay me, and told me that if I want to keep my job as a contractor, and keep in the loop to be able to earn for 9 days a week, then I had to do the job on the 10th day for nothing.” I found that simply appalling, and I think that the members here would, too. I have reported that that is an absolute exploitation of workers.

The contract workers that Darien is trying to support in this bill are the vulnerable workers. Everybody in this House understands that those workers are holding on for grim death to their jobs as we see this economic recession start to impact on workers who once were not vulnerable workers, but worked a decent, 10-day fortnight.

Hodgson Hon PETE HODGSON (Labour—Dunedin North) Link to this

I am not at all sure why anyone would oppose the Minimum Wage and Remuneration Amendment Bill—I really am not. I do not think anyone in this Chamber would say—

Hon Member

Why didn’t you vote for it last year?

I will come to it.

Hon Member

Oh yes!

Hodgson Hon PETE HODGSON Link to this

It will be OK. I ask the member just to hang on, because I will come to it. I do not think anyone in this Chamber would say poverty is a good idea. I do not think anyone in this Chamber would say the scourge of low pay does not need to be addressed. I do not think anyone in this Chamber wants there to be a huge rich-poor gap in this country; it is not part of our history, and it is not the way that we think. So the minimum wage and other things that are attendant upon it is one of the ways that we have addressed those various issues over the years. We address them in other ways as well, such as the benefit system, our attention to superannuation, and so on. But the minimum wage has always been a bottom line.

The minimum wage has a function to it. It basically tells employers or business people that if they cannot make money unless they pay someone less than the minimum wage, we do not really need their activity in the economy. That is the essential feature of a minimum wage. It says we are a First World nation, and stuff that looks a bit like slave labour is not our way of moving forward. That is the essential feature of the minimum wage.

It is also a matter of historic fact—though there is no particular surprise here, and I will not make a great big partisan point of this—that Labour Governments generally raise the minimum wage quite a bit and National Governments generally do not. Chris Hipkins, my colleague who spoke earlier, gave us the figures. They showed that in the 9 years of a former National Government the adult minimum wage rose by 87.5 cents. It went up from $6.12.5c to $7 neat in 9 years. Those 9 years were a period of some inflation, but the minimum wage moved by only that amount. In the 9 years that followed, the minimum wage went up from $7 to $12.

Someone has asked, not unreasonably, why that was done under the previous Labour Government. Let me explain precisely why it was done. As the minimum wage increased, so too, in some industries, some employers—very few of them—sought to take the cost out of the hides of their workers in other ways. One of those ways, for instance, was to say to home-care workers that it was fine for them to get the minimum wage, but they would not be paid for taking their car from one home to another. They would not be paid for the petrol or the other running costs—not for anything. The employers gave them the $12 per hour—or the $11, or whatever it was at the time—but they could not be recompensed for actual and reasonable travel costs. So Labour fixed that.

Again, this bill is about another instance of something that also needs to be fixed because, as the minimum wage has risen, some employers—not many; only a few—have said they will take it out of the hide of the workforce. And another way of taking it out of the hide of the workforce is to put someone on a contract. A contract says to employees that they are not paid by the hour but paid on the basis of the amount of work that they do. That is OK for some contracts; many people make a good living in that way. But in some areas of endeavour—and pamphlet delivery appears to be the one mentioned in the explanatory note of the bill, so that example will do—people are being told yes, they can deliver pamphlets, and are being told the amount they will get per thousand pamphlets. If it takes people more time to deliver them than it would take them to earn $12 an hour, they are told that is their problem, and they need to move more quickly, by somehow motorising themselves or getting around the area with a great deal more pace.

On the face of it, that might be all right, too—what is wrong with walking quickly when one does a pamphlet delivery? But on the other hand, we all know that some pamphlet deliverers are down to receiving $3 or $4 an hour. The question that then arises is why they would bother to deliver them. The answer is that if those employees are at home, have a bit of time between the kids going to school and coming back home, and the pamphlets are to be delivered in their own area, they may as well do that work. But it still means that that activity approaches slave labour. It still means that that activity should not be part of our economy. Either one pays more for pamphlet delivery or one does not have it. Those are the two options. I do not honestly understand why anyone in the Chamber would get up and take a different view from that. I do not think anyone really wants a working mum, perhaps on the domestic purposes benefit, to be paid $3, or $4, or $5 an hour to stomp the streets, putting pamphlets in our letterboxes. We are currently allowing that situation to occur.

Sio SU’A WILLIAM SIO (Labour—Māngere) Link to this

We are on the eve of the Government’s first Budget. We are also in an environment where there is a lot of uncertainty in many homes. There will be a lot of expectation on this Government and on what it will be providing to meet those uncertainties, and to provide confidence to the increasing number of people who are finding themselves out of a job. The last figures I saw showed that there are 115,000 unemployed people in New Zealand. Many of those people, when there are no jobs, will be looking at opportunities to take up jobs. It may be that they will consider the jobs that are outlined in new schedule 2, which is inserted by the amendment in the name of Ms Fenton.

I acknowledge my colleague Darien Fenton, because this is an important issue for a large and significant sector of the community—and not just of my community but, I suspect, of the country. People want this bill to pass so that they have some form of protection. When there is rising unemployment most of those people are in vulnerable positions and will be forced to negotiate their terms and conditions from a very weak standpoint. If they do not accept what is on offer, then somebody else, who is prepared to be paid less and to work in very unsafe environments, will take it up. That is what will occur if there are no protections for these workers.

By and large, our employers are good people who genuinely work their guts out to try to ensure that workers can have jobs and are protected. But I think they are looking to this Government for some leadership. They are looking to this Government to provide some confidence, and to provide not just jobs but sustainable incomes that can enable a father or a mother to sustain themselves and their families in the years ahead. Without that protection they will feel let down. I suspect that that is what will happen if this Government does not provide the leadership that our nation needs, and that leadership is about jobs and about providing incomes that people can live off.

I suspect it will be very difficult for National members on the other side of the Chamber to fully understand why the minimum wage is important. I will provide some figures to help them. Labour raised the minimum wage every year that it was in Government. It was raised from $7, as it was in 1999, up to $12 in 2008. When this Government came into power, 5 or 6 months ago, it moved it by 50c. Was it 50c?

Hipkins Chris Hipkins Link to this

Yes, it was 50c.

Sio SU’A WILLIAM SIO Link to this

So it is now $12.50. If somebody is working 8 hours, that gives him or her $100 a day. If he or she is working 5 days a week, that is $500 a week. After deducting taxes of $4,580 a year, the person has $21,000 left, which comes out to about $412 a week. If that person is renting a private home, and $300 is spent on rent for a two-bedroom or three-bedroom home in an area of Manukau City, that leaves that person with $112 for the week. If the average-sized family in Māngere, for example, comprises four people, we are condemning this family, with a one-income earner, to live on $111 or $112 per week. If the family puts aside $50 a week for power, or $50 a week for the telephone bill, what is left? That is what National is doing.

Horomia Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti) Link to this

I follow on from my learned colleague Mr Hodgson in relation to some of the realities of the minimum wage. A lot of the young lads in the Government who have just turned up in Parliament will learn, after they have been here for as long as some of us have, how you harden up in this place. At the end of the day, their mind-sets are so narrow that they believe that they have already arrived. You mark my words, tomorrow, after the Budget, some people will be shaking in this country—people like the 220 workers who have been laid off by the Accident Compensation Corporation tonight. People who understand the labour market well and understand the general nuances of it understand that other things flow on from imperfect management. That is what this Government is about; it does not really know what it is doing.

Jones Hon Shane Jones Link to this

Reckless!

Tremain Chris Tremain Link to this

It is more than reckless; it is outrageous and it is insidious.

At the end of the day, do Government members care? No. I listened to the prattling of Mr Peachey. Mr Peachey knows that when he was teaching—God forbid—teachers had a lift of nearly 18 percent in their salaries and wages. Who did that? The previous Labour Government. Let us go back to the last time that National exited the Opposition side of the Chamber and ended up over there on the Government benches. We inherited a rise in the rate of unemployment for Māori and Pacific Islanders to 21.4 percent. Mark my words, that is where we are going again. Unemployment for Māori and Pacific Islanders trucked up to 26 percent. Do National members care? No.

Part 2 of the bill.

This is all relevant to Part 2 of the bill. Do they care? No. They have a great ethos of supporting businesses.

We have a magic, inherited thing from those who have generally been to Harvard and other over-endowed academics who tend to suggest—

Hon Members

Own goal!

—no, he’s a top bloke—that if increased capital is injected into failing businesses, then everything will correct itself. If the market played out internationally, then we would be all right and that would be true. But we have seen what has happened with regard to the subsidies in Europe, and that will have an impact here. You mark my words—

Tisch The CHAIRPERSON (Lindsay Tisch) Link to this

Order!

Oh, Mr Chair—

Tisch The CHAIRPERSON (Lindsay Tisch) Link to this

Also, we are actually on Part 2.

Yes, well, this is relevant.

Tisch The CHAIRPERSON (Lindsay Tisch) Link to this

It might help if we talked about Part 2 occasionally.

Hodgson Hon Pete Hodgson Link to this

When I worked in the labour market, I and Mr Tisch went around supporting small enterprises and innovation in this country. This is the goddam truth—we did that. You left this country in a mess.

Part 2 of the Minimum Wage and Remuneration Amendment Bill, in the name of our great and learned colleague Darien Fenton, shows that we care about the working class. [Interruption] Let me give you a lesson while my friend here, Shane Jones, is walking and talking. The bad thing about your Budget, and the worst thing in relation to Part 2 is that there are now three levels of workers who are being put into unemployment. It is a sad state of affairs. Usually it is the lowest-paid—the factory workers, the meat workers; all those people—who are affected. But a lot of middle-management people are getting put under. Do you care?

I was in Hawke’s Bay the other day—and this is relevant to Part 2—and I saw a great skite in the newspaper by the real estate organisation. It was saying it has had its greatest quarter of sales for a long, long time. Then I had a closer look, and I saw it said there had been 35-odd mortgagee sales. That drives the employment market; that is what this is about.

You need fair remuneration. You need fair rates of pay. Why do you not want to give them? You sit here in these pastel confines, you are paid every fortnight—overpaid for that matter, most of you people—and you do not even have a song in your heart to ensure that Part 2 of this bill goes well.

Tisch The CHAIRPERSON (Lindsay Tisch) Link to this

The member knows that he cannot bring the Chair into the debate. On frequent occasions I have indicated that to the member. While I appreciate being mentioned occasionally, I do not like to be included as part of the debate. I just remind the member that we are on Part 2. It is about minimum remuneration. Just to make it very clear, I say we are talking about clauses 5 to 10, and that is what the debate should be about. The member’s time has expired.

Henare Hon TAU HENARE (National) Link to this

Well, talk about it! That is what happens when someone goes out to march for the people, and before the march has even begun he is sitting behind the counter at McDonald’s. I tell that member, Parekura Horomia, that the thickshake comes with Part 3. [ Interruption] Yes, bring back Georgie Pie; bring back all of that. I tell members that what that member just talked about for 5 minutes, while he was getting his make-up done by Shane Jones, had absolutely nothing to do with the minimum wage for sole contractors, and he knows it. He has been having too many burgers. That is what the problem is. The argument tonight is about the real world and the fantasy land that Makatānara lives in. Makatānara is McDonald’s, for those who do not know. Shane Jones said to me tonight: “Hey, Tau, you know this McDonald’s thing is going to blow over. By tomorrow it will be all over.” Well, I have news for “me and Mr Jones”: McDonald’s is here to stay. The legacy that has been left behind by those two members, Shane Jones and Parekura Horomia, is not the Minimum Wage Act; the legacy left behind for ever and a day is being caught out on national TV with a Fillet-o-Fish combo, a Big Mac, and double fries. The thick-shake is to come.

I raise a point of order, Mr Chairperson. I think we are probably more than halfway through the member’s contribution. I am pleased that you, too, are enjoying the speech, but the debate is about Part 2. I wonder whether we could have some talk about that.

Tisch The CHAIRPERSON (Lindsay Tisch) Link to this

I do not need any help. It has certainly been entertaining, but I remind the member—as I did the previous speaker—that the debate is on Part 2. I ask the member to come to Part 2. Thank you.

Jones Hon Shane Jones Link to this

Mr Chair—

Have you read Part 2?