8. METIRIA TUREI (Co-Leader—Green) Link to this
to the Minister of Finance
Does he still want to close the wage gap with Australia; and if so, what role does he consider unions will have in closing that gap?
Hon BILL ENGLISH (Minister of Finance) Link to this
Yes, unions will have a role in assisting to boost productivity in the workplace, so that the economy can sustain higher wages. In fact, the Government has committed about a million dollars to a productivity programme that has been started by dairy workers and someone else—I cannot remember which was the other union. Legislating for higher wages, in the long run, will not work.
The Government has put a number of amendments before the House, including one that does not restrict union access but changes the way that decisions are made about union access to the workplace—there is no doubt about that. We believe that package will assist with having a more flexible and productive labour market, which is vital to closing the wage gap with Australia.
Who exactly is pushing the policy to restrict union access to workplaces, given that even Business New Zealand thinks it is a very low priority?
It is one measure among dozens that the Government is taking that we believe in the long run will lift the strength of the economy. The amendments, like the other ones in the industrial relations package, were put forward by the National-led Government.
Would it not be a quicker pathway to closing the wage gap between New Zealand and Australia if the Minister would agree to index the minimum wage to the median wage, so that the lowest-paid workers in this country can share in the benefits of the productivity that he talks about, and closing the gap between rich and poor—or does he consider that it is OK for productivity increases to enrich the rich and continue to impoverish the poor?
I think that productivity increases historically have had probably the opposite effect, in that they are the one way in which we can raise the living standards of those on lower incomes. The fact is we could just stick the minimum wage to $20 an hour, I suppose, and that would make some people better off. It would also drive hundreds, if not thousands, of small businesses out of business and exclude thousands of New Zealanders, particularly young New Zealanders, from the workforce altogether. We all know there are trade-offs around minimum wages, and simply legislating for higher minimum wages does not get rid of the risk of businesses being unable to continue and of the effect of locking workers, particularly young workers, out of the workforce. That matters now, because the number of young workers as a proportion of the total unemployed is higher than it has been for some time.
Does the Minister not know that increasing numbers of low-wage workers, ordinary New Zealand workers like drivers, labourers, and machine operators, are heading to Australia because the minimum wage there is the equivalent of NZ$19.74 an hour, and because unions have played a long-term part in strengthening working conditions for the lowest-paid workers?
Yes, I am aware of some New Zealanders crossing the Tasman to an economy where wages are anywhere between 10 and 30 percent higher than they are here. That is a continuous challenge for New Zealand. We have taken some recent steps to help to close up that wage gap and to make New Zealand a more productive option. For instance, people who drive trucks now pay a top statutory tax rate of 17.5c in the dollar, which is quite low, and it means that if they do another hour of overtime they keep 82.5c of each dollar paid for it. We believe that improving the incentives for workers right across the income range is important, and we have taken probably the biggest step that a Government has for a long time to improve their incentives.
Does the Minister not care that we are losing ordinary New Zealand working families, who are trying to have an ordinary working life, either to higher wages in Australia or to poverty here at home, because of his Government’s failure to take basic steps to increase the minimum wage for the lowest-paid workers?
Of course I care about that, as the Government does, and I think the member cares about it, and maybe even the Labour Party cares about it. At the moment the biggest challenge in this economy is to undo the damage arising from the excesses of the last decade, when too many of those families were reliant on jobs that were funded by debt, and that is not sustainable. Too many of them were reliant on jobs that were funded by excessive Government spending, and that is not sustainable. We are turning that round.
Sue KedgleyDoes he think it is fair that the majority of caregivers who work in aged care, and who look after some of the sickest and most vulnerable New Zealanders with complex health needs, are amongst the lowest-paid workers in New Zealand and do not get any additional pay, overtime, or penal rates when they are required to work at nights or on weekends?
The member is probably aware of a court case in respect of the work at night, but yes, these people are among New Zealand’s lower-paid workers. I am quite surprised that after a decade of Labour’s being in office, it did virtually nothing about that. In fact, all the wage increases in health under Labour went to the highest-paid health workers, not to the lowest-paid, and I cannot understand the logic of that.
Hon Trevor Mallard Link to this
Does he agree that when he took over as finance Minister, New Zealand was in a reasonable position to deal with the uncertainty of our economic outlook?
No, I do not. The problem when we took over was that, first, the economy was in recession; secondly, inflation was at over 5 percent; thirdly, households had massive debt; and, fourthly, Government spending was out of control. The one factor that has worked for us is relatively low Government debt. The rest of it was a mess.
Hon Trevor Mallard Link to this
I seek leave to table a statement of the Hon Bill English of 18 December 2008: “I want to stress that New Zealand starts”—
Mr SPEAKER