12. DARIEN FENTON (Labour) Link to this
to the Minister of Labour
By how much, in today’s New Zealand dollar terms, has the wage gap between New Zealand and Australia grown since the Employment Contracts Act 1991 deregulated the labour market?
Hon KATE WILKINSON (Minister of Labour) Link to this
I am advised that the calculation that the member asks for is fraught with problems from a mathematical point of view, and that two people working out the same question are likely to come up with two different answers, based on differences in currency, conversion, CPI purchasing power, etc. That said, the Department of Labour has provided some numbers showing that the difference in the wage gap is around $100, in today’s terms, from what it was 20 years ago. It also advises that the largest gap in wages occurred under Labour in 2006.
Does she agree with Professor Ray Markey of the Auckland Institute of Technology’s Work and Labour Market Institute, that “There is virtually no evidence in New Zealand, for example, or even overseas that a reduction in the coverage of collective bargaining or in the coverage of unions will improve workplace performance. In fact, there’s some evidence which goes the opposite way.”?
Hon KATE WILKINSON Link to this
I neither agree nor disagree with that quote, but can I say that we do appreciate the value of unions in improving the productivity of the workplace; we accept that. But in relation to collective bargaining, what we are trying to do is to focus on a labour market that is flexible and that is conducive to economic growth and to wage growth.
Does she agree with Business New Zealand chief executive officer Phil O’Reilly that employment relations need to be flexible in order to drive productivity; if so, why is Australia more productive, and with 30 percent higher wages, despite having a stronger union movement and centralised wage fixing—a system called modern awards?
Hon KATE WILKINSON Link to this
Yes, I do agree with that sentiment of Mr O’Reilly from Business New Zealand. Unless the member is totally ignorant of what happens in Australia, she should be aware that they are very rich in minerals.
Which factor does she believe has had the most influence on the hundred thousand New Zealanders who have chosen to leave New Zealand for Australia, under her Government—Australia’s higher wages and better holiday conditions, or the Christchurch earthquake and Australia’s different climate, as she suggested on Radio New Zealand this month?
Hon KATE WILKINSON Link to this
There are a number of reasons why people are leaving to go to Australia, and there are a number of reasons why people are leaving Australia to come to New Zealand. Some of those reasons do include the earthquake.
Does she think, as our Prime Minister does—and as he has said today—that Australia should just give us a coalmine and that would be the answer to the wage gap and the thousands of people who are fleeing to Australia?
Hon KATE WILKINSON Link to this
I can say that certainly if we were richer in minerals, then we would have a better economy.