Hon MARGARET WILSON (Minister of Labour)
: I move,
That the Holidays Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Transport and Industrial Relations Committee with an instruction that the committee present its final report within 6 months. All parties agree that the current Holidays Act is an extremely difficult piece of legislation to apply and to interpret. Twenty-six percent of all calls to the Employment Relations Infoline last year related to the Holidays Act. In order to inform the change clearly needed in this area, an advisory group, including the New Zealand Council of Trade Unions and Business New Zealand representatives, provided me with two reports recommending improvements to the current Act. I commend them for their effort in reaching, and attempting to reach, a consensus on the issues placed before them.
The bill before the House today draws on the recommendations of this advisory group, and will enable all employees to have access to entitlements at the standard that society as a whole considers acceptable; ensure that holiday entitlements are both robust and appropriate to accommodate increased diversity in working patterns; provide a balance between the needs of employers and employees; and promote a balance between work and life.
Areas previously left to the courts to interpret and develop have been dealt with in the bill, either through the codification of case law or by providing clear legislative direction as to the provisions that should apply. That will mean that users will not have to refer to the numerous judicial decisions that supplement the current legislation.
The bill provides the same level of entitlements to all employees, regardless of their type of employment, industry, or sector, with a special exemption for the defence force. The bill also reflects the Government’s objectives of work-life balance, and health and safety in the workplace. It provides employees with rest and recreation through an entitlement to 3 weeks paid annual leave after every 12 months of continuous employment. An employer must allow an employee to take the annual holiday within 12 months after the date on which the employee’s entitlement arose. To clarify the explanatory note of the bill, employees must be paid for their annual holiday in the pay that relates to the pay period in which the holiday is taken, unless the employer and employee agree that it is to be paid at the beginning of the annual holiday concerned.
I realise there is currently a debate around 4 weeks’ annual leave, as proposed by the Hon Matt Robson’s member’s bill. Although 4 weeks’ leave is not the Government’s current policy, that will be an issue that the select committee will be able to consider.
The bill provides a clear process for determining the timing of annual leave. It is to be by agreement, but as a last resort, the employer will be able to direct the employee to take annual leave upon at least 14 days’ notice.
The method for the calculation of annual leave entitlements has been spelt out so that it can easily apply to all employment relationships and working patterns. Consistent with the objective of paid annual leave to provide rest and recreation, limits have been placed on the ability to “pay as you go”. A “pay as you go” agreement occurs where employees’ annual holiday pay is paid proportionately with their regular wages payment. The bill provides that that can only occur with the employee’s explicit agreement when the employment agreement is for a fixed term of less than 12 months, and where the holiday payment is an identifiable component of the employee’s wages.
The bill retains the current 11 public holidays per year, for the common observance of days of national, religious, or cultural significance. If a holiday falls on a day the employee would normally work and the employee does not work, the employee is
entitled to that day off at his or her ordinary rate of pay. If an employee agrees to work on any of the public holidays, the bill provides for an alternative paid day off, if the employee would have normally worked on that day. The bill provides for consistency in employee entitlements across all public holidays, addressing the current confusion around Anzac Day and Waitangi Day.
The bill also introduced a new statutory minimum payment of a rate and a half for working on a public holiday. Where an employee’s current rate of pay already incorporates a component for a payment of a rate and a half, or where one of the parties contends that it does, the bill provides a method for employees and employers to settle that dispute. The employment agreement must clarify how it complies with the legislation. That must occur when the employment agreement is renegotiated, or within 12 months of the Act coming into force, whichever is earlier. Mediation services in the employment institutions will be able to assist parties in addressing that.
To ensure that public holidays are flexible enough to accommodate modern working patterns, the bill provides for transfer of Christmas and New Year public holidays, based on the working week of the employee. The automatic transfer of those holidays under the current legislation can result in employees working on the actual days, without any recognition of that.
The bill also provides employees with separate entitlements to sick and bereavement leave, so as to provide insurance when employees are unable to work because of sickness or bereavement. Employees will become entitled to that leave upon completion of 6 months’ current continuous employment. Employees will be entitled to 5 days paid sick leave per year, which may be taken in relation to the sickness or injury of the employee, the employee’s spouse, or a person who depends on the employee for care. That entitlement may be accumulated to a maximum of 15 days, and expires upon the termination of employment.
The bill provides an employer with the ability to require proof of injury or sickness, if the employee is absent from work for 5 or more consecutive calendar days. The bill provides a two-tier entitlement to bereavement leave. Three days’ bereavement leave will be available to the employee on the death of a close relative, and 1 day of bereavement leave will be available on the death of any other person, where the employer accepts that the employee has suffered a bereavement, taking into account closeness of relationship, cultural reasons, and any other responsibilities the employee may have in relation to his or her bereavement.
The bill provides for appropriate remedies when its provisions are breached; remedies that are consistent with other employment-related legislation. The current penalties are increased to a maximum of $5,000 for an individual and $10,000 for a company or corporation, which are consistent with those under the Employment Relations Act. The bill does not contain any provision for penalties for continuing offences.
As I outlined earlier, an emphasis of this bill is to clarify an ease of interpretation application, which will significantly reduce the need for enforcement action. Overall, I expect the benefits of the bill, such as productivity increases associated with a more balanced and effective working environment, to outweigh any cost to employers associated with the changes to the holidays legislation. Employers, employees, and practitioners will benefit from a bill that is clearer, easier to understand, and that applies to all employment arrangements and working patterns. The Holidays Bill recognises the relationship and balance between work and the demands of life outside employment, by providing holiday entitlements at a socially accepted level. It represents a step forward for our society, in recognition of the needs of a modern workforce. I commend the bill to the House.
Hon ROGER SOWRY (Deputy Leader—NZ National)
: National will be opposing the introduction of this bill. That is not because the Holidays Act does not need changing, because it certainly does need changing—and the Minister of Labour in her speech made it clear that the current holidays legislation is in need of some change. But change that imposes a huge amount of compliance costs on employers, change that puts up horrendously the fines that employers face, change that is anti-employer, and change that means that employers will not hire new staff, is not the sort of change that this nation needs, and neither is it the sort of change that National will be supporting.
We will be interested, of course, to watch how the United Future party votes on this legislation, because it is a party that is fond of telling the business sector that it is here to moderate the Government. We will see in a short while whether it intends to oppose this legislation, and to act as a moderating force, or whether, once again, United Future members will speak tough with employers, but come into the Chamber and vote to put extra costs and compliance on them.
I want to cover a few of the issues in the bill that cause us grave concern. The first issue relates to sick leave and bereavement leave.
Lindsay Tisch: That’s a big one.
Hon ROGER SOWRY: It is a big issue. There is a new component in this bill called bereavement leave. That is fine—it is something that is worthy of debate. But what worries us is that it is not clear whether the new entitlement for 3 days’ bereavement leave is an annual entitlement, and it is not clear whether an employee can take fewer than 3 days—because it may well be that he or she needs only 1 day’s leave. It is not clear what the employer’s rights are—whether the employer has any ability to say to an employee, in some cases, that the bereavement leave should be for 1 day rather than the full 3 days.
The sick leave component of this bill allows employees to carry over their sick leave from one year to another. That is also of concern. Employees can start to log up large amounts of sick leave, then take that sick leave without having to provide any proof that they are, in fact, sick. We will want to hear submissions on that matter particularly carefully. The bill notes that if people are off work for a long period of time, they can be required to provide evidence that their absence is necessary, but if somebody takes 3 or 4 days’ sick leave one week, then 3 or 4 days’ sick leave the next week, the employer does not have any rights to ask for, or enforce the provision of, a doctor’s certificate.
Helen Duncan: Oh!
Hon ROGER SOWRY: We think that is wrong. The Labour member Helen Duncan can scoff at that, but I hope she will give employers who are worried about that, and who come before the Transport and Industrial Relations Committee, the courtesy of not just scoffing at them, as she has just done. I hope she takes it a lot more seriously in the select committee than she seems to be doing in the House today.
We are really worried about the penalty clauses in this bill. Labour seems to think that employers are all incredibly wealthy and make huge amounts of money, and that when they do anything wrong, massive fines should be slapped on them. That is the Labour approach to dealing with employers. So, in this bill, Labour has said to the little person who operates a sandwich bar and employs a couple of people part-time over the lunch hour, or whenever: “If you get wrong the entitlements of those staff, then instead of being liable for a fine of $500 as at the moment, we will impose a fine of $5,000, if you are an individual, but if you have put your business into a company arrangement, we will fine you $10,000.”
I know lots of employers who employ fewer than five people. It might come as a surprise to Labour members, but those employers are not millionaires. They do not make millions of dollars. They often are worrying week after week about how they are
going to pay the wage bill. I wonder whether those Labour MPs have ever been in a situation where they employ staff, and, on a pay day, and, because they have had a bad week, have worried about how they will pay their staff. [Interruption] Those Labour MPs have no understanding of that, at all. They have never been in the situation of waiting for the next person to come in and make a purchase, so that they can pay the junior’s wage—and hoping that it will happen before the end of the day.
Labour members can scoff at that, but those are the same employers to whom this Government is now saying if they get the entitlements wrong, then the trade union will be able to prosecute them, and the fine could be $10,000 because they are running a small business, and have set themselves up as a company. I ask Labour members what incentive that provides to hire staff. How many small employers will be saying: “Gosh, that’s a good idea. I’ll go and hire another staff member now. That makes me feel better.”?
This is a Government that has put a massive amount of extra costs on to small employers. In fact, employers themselves have said that if they employ from 15 to 20 staff in a medium-sized business, their extra compliance costs since Labour came into power are about $7,000 per annum. Labour members might not think that is a lot. They might think those people have a lot to come and go on—but they do not. Employers make decisions every day about keeping not only their businesses afloat but their employees employed. That is what they do. To approach the Holidays Act with the cynical, punishing, envy-like attitude of Labour MPs that says to every little employer: “We’re going to whack you with high fines.” is a nonsense, and we will be opposing it.
The other part of this bill that one has to understand—and, certainly, employers around the country understand—is it is a Trojan Horse for Matt Robson’s bill seeking 4 weeks’ annual leave. He had a bill to promote 4 weeks’ annual leave drawn out of the ballot, but Labour, through Mr Maharey—whom Mr Tamihere thinks so highly of—had promised business organisations just a week or two before the election that 4 weeks’ leave was off the agenda. He reiterated the same promise the day after the Holidays (Four Weeks Annual Leave) Amendment Bill was drawn out of the ballot, then was rolled in caucus the following week. I say to Mr Robson that he is doing a good job. He has the trade union movement out there backing him to the hilt on his bill to provide 4 weeks’ annual leave, and the trade union members of the Labour Party are doing exactly the same. This bill is a Trojan Horse for Mr Robson’s bill, and National totally opposes that bill.
PAUL ADAMS (United Future)
: As a small-business owner for some 30-odd years now, I feel I can speak on this bill. In this country 95 percent of businesses are small businesses. The difference between words is interesting. A business, especially a small business, is in reality a person. It is somebody who has stood up to work for himself or herself. I have noticed over the years—especially the more recent years—that most people in a small business are working far longer and harder, for far less. Nevertheless, this is a bill that will bring a lot of clarity to the Holidays Act—an Act that causes a lot of grief and problems. So, unlike National, our party is looking at this bill with a little bit more of an open mind and sophisticated view than those parties that would simply oppose it for opposition’s sake.
We see it as fulfilling two distinct functions.
Hon Roger Sowry: It doesn’t help the business community.
PAUL ADAMS: It will. The first function is to clarify existing minimum leave entitlements, such as the 3 weeks’ annual leave, the 11 paid public holidays, and the day in lieu for staff who work on public holidays that fall on a normal working-day. The bill outlines many other provisions that either give statutory effect to case law, or codify current practice. To be honest, this is an area that most small-business owners struggle
with. I personally have struggled with it over the years, and have had to seek clarification on a number of issues such as these. So, on this particular part, and speaking as a small-business owner, I welcome that clarification.
The Holidays Act is in need of an overhaul, as it is the source of confusion and conflict between employers and employees. The representatives of both Business New Zealand and the New Zealand Council of Trade Unions on the advisory group that consulted over the bill reflected a common desire to see tidy-ups in the holiday legislation. We welcome that. Simplification of holiday provisions would also have an impact on the work of the Department of Labour. Leave entitlements were the subject of 62,000 inquiries to the Employment Relations Infoline last year, and 68 percent of complaints to the labour inspectorate relate to annual and public holidays. The bill provides a formula for the calculation of holiday pay, and this is great. We welcome any move that might help the labour inspectorate to cut down the time it currently takes, which is an average of 3 months, to investigate potential breaches of employment law.
The second function of the bill, as we see it, is agenda based, whereby the opportunity to clarify the law is being used by the Government to award new entitlements to workers, in line with its traditional philosophy. Like National members, we do not want to load additional costs on to businesses, given the fact that 95 percent can be defined as small firms employing fewer than 10 staff. So we would like to withhold judgment on those new provisions until we get more information about the costs that employers will face. It is notable that where Business New Zealand, in its advisory role, departed from the Government, it was over the issue of a minimum rate of time and a half for those working on public holidays—equivalent to an alternative day’s leave. It estimates that that will cost employers an additional 1 percent in wages. But we need better information on how many workers already receive these penal rates.
We would really question sick pay. To give an example, when I had a manufacturing business I decided that I would rather have my workers at work than on sick leave, so I suggested to them that if they did not use all their sick leave in a year, I would pay it out at the end of the year, along with their holiday pay. My business’s sick leave entitlement dropped by 80 percent. So I do question sick leave. I understand that, as with many laws, the principle sounds good, but the reality for the small-business person, the man and woman dealing with the situation where the rubber meets the road, is that many of these things that sound good and are intended to be good—there are no doubts about that—are not used by the employees of the company as they are intended to be used. This is a problem, so I would be reluctant to see sick leave provision rolled over to up to 15 days. I know that it would be a huge cost to small businesses.
I agree with Mr Sowry; he will be pleased to know that I share his concerns about our increasing the costs of small businesses. I do want to see more people becoming small-business owners. I do want to see more employment in this country. There is no doubt that if we increase regulations to such an extent that businesses no longer want to take on staff, it would have a detrimental effect on our country, and not one that I would like to see. I would welcome legislation that helped small-business owners. They work hard. When I closed my business for Christmas I noticed around my area that all the people who were sweeping the grounds, who were tidying up, were the owners of small businesses. As we mentioned, if the 4 weeks’ leave provision is tied in with this bill, United Future will not be supporting it. Many small-business owners would love to have 10 days’ leave in a row, let alone 3 weeks or 4 weeks. In reality, in the present environment they just do not get holidays.
The new provision to separate bereavement leave from sick leave also needs further investigation. Again, data from the Employment Relations Service shows that 96 percent of agreements, covering 93 percent of employees, contain specific provisions
for bereavement leave. Over half of the agreements, covering 40 percent of employees, provide for 3 days’ leave, but it is likely that many more contain some element of discretion when it comes to bereavement leave. One of the things that I think is missing in this nation, and something that I would like to see re-established, is the rapport that there used to be many years ago between an employer and his or her staff. Personally, I have always had a very good working relationship with my staff. I have had staff work for me for over 25 years. We must allow for good employers to have provisions to retain their staff. If I have good staff, I do want to retain them. I do not need a law to tell me how to do that. Likewise, I think a bad employer will not retain staff, because they should have the freedom and the opportunity to go to a better employer. I think it should be self-regulating, in many ways.
Employers are also targeted by an increase in fines for breaches of the Holidays Act, from $500 to as much as $10,000 for a company or a body corporate. That would be extremely scary for most small businesses.
We would want much clearer evidence of the impact of these new provisions before we were prepared to support the bill going beyond the select committee. I have already stated that if Matt Robson’s member’s bill to provide for 4 weeks’ annual leave is considered alongside this bill in the select committee, we will certainly oppose it, for reasons we will outline when the bill is next debated. But we will vote for the first reading of this bill, because we do not want to forgo the opportunity to clarify the current holiday legislation. The onus is on the Government to convince United Future and this Parliament that the new entitlements it proposes will not adversely impact on businesses in this country.
PETER BROWN (Deputy Leader—NZ First)
: The holidays legislation in this country is in a mess. It is absolutely in a mess. Employers do not understand it; employees do not understand it. I may have an advantage over some people in this House—not Paul Adams; I respect that he has been in business—as I have been in business. If employers have a reasonable number of staff, they spend hours sitting down, working out people’s entitlements. It is not obvious what they are entitled to. The system is not transparent.
I am a little bit surprised that the National Party will not support this bill going to the Transport and Industrial Relations Committee. When we first came to this House and were in coalition with National, if I was told once by Max Bradford I was told a hundred times that the holidays legislation is in a mess and is in urgent need of sorting out. That is not to say we agree with everything that is in this bill, but I notice that the National Party said it is not going to agree with the bill, then raised three issues—all relatively minor, I would suggest. Those issues are sick leave, bereavement leave, and the level of fines. We share its concerns on those three issues. But that is not to say we do not welcome this bill going to the select committee and the legislation being sorted out once and for all. What we need in this country is fair, straightforward, and easily understood holidays legislation. This bill gives the opportunity for us to provide that.
I see that Matt Robson is getting quite excited. I should put him at ease and tell him that New Zealand First will, at least, support his bill going to the select committee. We will support it going as far as that. We know that some people in this country are, in our belief, entitled to a longer holiday than they get—maybe not everybody; maybe 3 weeks is adequate for many. But the people we are particularly concerned about are casual employees. I do not know whether members know what happens to casual employees. They simply get 6 percent tagged on their wage at the end of the week, and it is all absorbed. Six percent is two-thirds of nothing, I might suggest, to an employee who has given his or her heart and soul to a company. Maybe there is a good case for it to be increased to 8 percent, which is equal to 4 weeks’ holiday. So we welcome Matt
Robson’s bill coming into the House, and we will support it going to the select committee. If there are no pitfalls or obvious trickeries, I think we might even give it a little bit more support—in qualified areas, at least.
But we think that the biggest possible effect of the Minister’s bill is on penal rates. That is a concern we share with United Future. It raised it, and we share that concern. I am surprised that the National Party did not even raise the issue. We know that it is a concern of small businesses, so we will be taking a very, very close look at the long-term effect of that.
Let me suggest that it might well be that employers have to pay a little bit more for their staff in various industries, activities, or operations, but that will be overcome easily, we believe, if the legislation is simple, straightforward, and fairly easily understood. We believe that the aim of this Parliament should be to get positive legislation that everybody concurs with, recognising that everybody is entitled to annual holidays and statutory holidays.
In concluding, I simply say that New Zealand First will support this bill going to the select committee. We will approach it with an open mind. We hope that the submitters make their submissions very clear and easily understood, and that every other party takes an equally open mind, so that when this bill re-emerges it is fair, transparent, and accepted by business and employees alike.
Hon MATT ROBSON (Deputy Leader—Progressive)
: It is no wonder that Mr Bill English, the present leader of the deputy leader of the National Party, Mr Roger Sowry, has already called this Government a third-term Government. We have before us another step in providing progressive legislation for New Zealand, and legislation that makes life better for the majority of people. Margaret Wilson is to be commended for driving legislation through to the House that reflects fairly and accurately the policies of both Labour and the Progressive party in this Government.
As has been made clear by many speakers, and I am pleased they have brought up the issue, the Progressives also want to take another step at this stage, which is an amendment to provide 4 weeks’ leave. I have heard a lot of speeches about people’s concern about the effect on others, if 4 weeks’ leave is brought in. I just say to them that I, too, have employed people. I, too, in my first 3 years of business took very few holidays. But I never campaigned to have the rest of the country stripped of their 3 weeks’ holiday—or 4 weeks’ holiday, if that was provided in their collective agreements—or any other legislation that made life better for people.
I have also worked on a dairy farm. If one works on a dairy farm, one does not expect to get the conditions that other people have most of the time. But one does not, if one is sensible at all, campaign to have the rest of the country have the same conditions that many dairy farmers have. So 4 weeks’ leave has to be seen within the continuum of necessary changes for the majority of the New Zealand people.
Recently I have taken to doing some further reading, and I received a book on one of the prime builders of General Motors. His name was Alfred P Sloan. It is a very interesting book. He was one of the drivers, in the early 20th century, of the General Motors empire—one of the people who helped General Motors to be able to say that what is good for the General Motors is good for the United States. His company became one of the prime movers and shakers of American business. It bought and sold Presidents and senators, it profited from many of the wars that the United States was involved in, and it will profit from the war in Iraq if it takes place. But what I noticed about Mr Sloan, who was at the top of the General Motors tree, is that when he found that his work for the corporation was of such intensity that it was draining his spirit, he decided he needed to take a particularly long holiday. So Mr and Mrs Sloan, in late July of 1919, left by ship for England, and they had a very lengthy holiday.
His workers at that time had, if they were lucky, 1 week’s holiday. In 1936, in Flint, Michigan, then later, in Detroit, there were some of the largest sit-down strikes of the organised labour movement that the world had ever seen. The issue spread from there across the world, and in France employees were successful in getting 6 weeks’ leave, in 1936.
My point, apart from telling members to read this book—it is a quite interesting book—on General Motors, is this: there is also an attitude in this country that those at the top of the tree deserve adequate rest and recreation—and quite often they do—but those who are considered to be at the bottom are told that they must wait, that this is not the time. People cannot get back 3, 4, or 5 years of their lives that could have been spent with their children, family, and friends. It is not a matter of saying it is not time now, in terms of people’s health. What is really being said by people who oppose this legislation is that although they may personally consider it time for them to have a break, it is not time for all those others who contribute to our society.
Four weeks’ annual leave would be a significant step forward in raising the quality of life of all New Zealanders. That is why, in the context of this clarification of holidays, of making sure that our holidays legislation brings fairness to all employees—and to all those who need their holidays to relate to the holidays that their families get—the provision of 4 weeks’ leave is a step that should be taken at the same time. It is a family-friendly and an employee-friendly policy.
It is almost 30 years since we increased annual leave for workers. Peter Fraser’s Government introduced 2 weeks’ leave in 1944. If members read the
Hansard of the time, they will see the same types of speeches that Roger Sowry, Mr Adams, and so many others have given in this House—“It is not time.” If they go and read the speeches on equal pay for women that were given in 1973, they will find that there were complaints that if women were paid equal pay they would not be employed any more, and that they were worth only 80 percent of a man’s pay. If they want to do some more historical research, they should go to the debate on the 10-hour working-day bill, in Victorian England. The argument put forward by employers was that it was only in the last 2 hours of the day that any profit was made, and that if the working-day was reduced from 12 hours to 10, no profit at all would be made. That was utter nonsense.
In 1974 Norman Kirk’s Government decided that it was time to bring in 3 weeks’ leave. I believe that Mr Prebble was here at that time. He is a learned member of this House, and has been here as long as that. He will remember that people were saying then that it was not the time to introduce 3 weeks’ leave. Improving the lot of the average New Zealander was important to a politician of the stature of Norman Kirk, and it is important to me, as I am sure it is to many members in this House. It is time to tread the path of those who have made those improvements. It is time for another milestone in improving the lives of New Zealanders. We can be proud of our nation’s history of leading the world on issues of social justice. We were one of the first countries to introduce the 8-hour day and votes for women, and with the Pacific nations we led the world in having an antinuclear policy.
We can also be proud that, in the last term, this Government introduced paid parental leave, relieving stress on parents, especially mothers, around the country. But we cannot be proud of how long it took us to introduce it. Over 100 countries beat us to it. The Progressives do not want that to happen in relation to 4 weeks’ annual leave. Most OECD countries around the world have it. The European Union has set a minimum of 4 weeks’ leave, and many of its constituent countries, including France, Spain, Sweden, and Germany, have 5 or 6 weeks’ annual leave already.
Shifts such as these come when the public is ready. There is public concern about people working long hours, about parents not having the time they should have to spend
with their children. A poll on my own website recently showed that 76 percent of the thousand people polled supported introducing 4 weeks’ leave. I do not pretend it was scientifically accurate, but I just want to give members the figures.
I am concerned about workplace accidents, about the conditions many of our lower-paid workers find themselves in. I am concerned about the lack of concern about that issue shown by many members in this House. Many people are working well over 40 hours per week, and the standard 8-hour day is only a dream for most. I am concerned that many families are struggling to pay for childcare while the parents have to be at work. We need to do more to help. An extra week’s leave can significantly reduce those costs for parents. Four weeks’ leave helps the most vulnerable working New Zealanders by giving them more time to spend with their children, time to rest, and time to take care of their health. It brings them the conditions that many New Zealanders already have, especially those on higher salaries or on collective contracts. Only 10 percent of workers on collective contracts do not already have 4 weeks’ leave. So it is actually a catch-up mechanism. In return, it will bring employers a happier, healthier workforce with, I predict, a lower turnover, and a workforce less likely to be having accidents on the job.
The economy is doing well, and I need not remind people that for over 3 years all our regions have been in positive growth mode, year after year. Now is the time to make a step such as this. Economic development, though, is not just about increasing production for the sake of it; the reason that the Progressives want economic development is that with a stronger economy we can contribute more to improving social conditions for New Zealanders. Four weeks’ leave is one of those conditions.
Mr Roger Sowry referred to a Trojan Horse. He needs to go back and read his classics studies, if he took that subject in high school. The Trojan Horse was a trick. Inside the horse was an army, which came out at night and succeeded in destroying the inhabitants. This is not a trick. This has been declared. This is one issue where members can say which side they are on. Are members on the side of providing 4 weeks’ leave for the lowest-paid and most vulnerable workers in New Zealand, or are they against it? It is a simple choice. This matter will go to the select committee, New Zealanders will be able to make their views known—all of them—and we will be able to consider it alongside the Holidays Bill.
I commend the bill to the House, and I also commend the studying of the member’s bill to provide 4 weeks’ leave at the same time.
DEBORAH CODDINGTON (ACT NZ)
: I rise on behalf of the ACT party to oppose this Holidays Bill going to the select committee. This is not simply a tidying up of the old Holidays Act; this is a sop to the unions from a Government that is terrified of reform. It is anti-Māori, anti-consumer, anti-business, and it is anti-people.
The preamble to the bill says it recognises the need to maintain a balance between work and life outside the workplace. Well, thank you very much, Labour Government, but I would like to maintain my own balance between work and life. Not content with pushing us around inside the workplace, this Government now wants to push us around in our leisure time, as well. I am sure that 3.8 million New Zealanders do not want the bureaucracy to tell them what they should do in terms of how much time they spend with their children, how much time they spend on leisure, etc.
This bill is not a great reform. As I said, it is a sop from a Government that is terrified of reform. The reaction from the Council of Trade Unions hails this bill as a huge reform for workers. That indicates just how paralysed this Government is in terms of staying in office. It is caught between a rock and a hard place. On the one hand, it tries to pretend it cares about small business. On the other hand, it has to please the unions, from whence it is driven. It throws a small crumb to the workers, but in the
short term, and over time, it will hurt workers, because it will do serious damage to medium-sized business. Business in New Zealand is already hurting. Just before Christmas, Business New Zealand released results of an analysis that showed a disturbing trend in compliance cost. United Future says that Business New Zealand is happy about this bill, but Business New Zealand is definitely not happy about it. Simon Carlaw, the head of Business New Zealand, wrote an article in the
just this week, in which he said: “New holidays legislation will require time and a half to be paid for staff working statutory holidays, as well as a paid day’s leave. That could add 1 percent on the wage bill for a full year—about $7,000.” Business New Zealand asked just one simple question when it did its analysis: how much is the Government hurting business? The short answer is heaps.
This bill has already had a stifling effect on economic growth. We will never get to the top half of the OECD by 2010, despite the Finance Minister saying in
magazine last March that that goal was still on the agenda. Last week the Prime Minister said it had actually been pushed to the side of the desk, so who is correct; what is going on? We know what is going on with this bill. This bill will seriously damage 80 percent of the businesses in New Zealand, which are small businesses, employing five or fewer people. Who owns those businesses? Mums and dads—ordinary working New Zealanders; people who mortgage their own houses to open a business. How many members of the Government have ever risked their own money on a business, or on anything more than a Lotto ticket?
This bill contains lethal clauses for employers. Take the changes to statutory holidays, for example. We will now have 11 statutory holidays a year—not nine, because we will add Waitangi Day and Anzac Day. All employees, whether they are wage or salary earners, will be paid time and a half for working on public holidays, plus they will take a day off in lieu, even if that public holiday falls on a weekend. So, in effect, there will be something like 22 extra holidays a year, on top of the 3 weeks’ holiday that this bill will give—and two of those weeks have to be given 2 weeks in a row.
If the member’s bill proposing 4 weeks’ holiday goes through, what will we see with workers who already get 3 weeks’ holiday? Contrary to what this Government thinks, there are many good employers out there who already give 3 or 4 weeks’ holiday. They will have to increase that to another week to maintain relativity. This Government wants to put all employers into the bad corner. What would an employee who already gets 3 weeks’ leave do? He or she would go for four. This will affect thousands of employers all over New Zealand. As I said, there are only two ways for employers to deal with statutory holidays, and minimum time and a half, plus a day off. They either absorb the extra costs and pass them on to customers, or they reduce staff. Either way, consumers will suffer. Staff are consumers; they are not separate.
This bill reflects the Government’s total ignorance of matters relating to the tourism industry. It is already hard for employers to get staff in the tourism industry. I have worked extensively in the industry—as an employee, as a waitress and bartender, and as an employer, as the owner of a restaurant in a tourist town. What can one do? If the Government increases the cost of wages for an employer, he or she has to absorb those costs. One cannot pass them on to consumers. One cannot charge tourists who walk in on Christmas Day, New Year’s Day, or Waitangi Day one and a half times more for a drink or a meal. There would be no customers. One would get terrible reviews for providing a different menu according to what day of the week it was. This Government is absolutely dreaming if it thinks that businesses will survive the extra costs. As I said, it is already hard to get staff. There is no way that there will be differential pricing for statutory holidays. It is up to the employer to agree with the employee as to the
conditions for working on public holidays. It is not for this Government—or for any Government—to dictate an agreement between an employer and an employee. This bill leads to less choice for employees, employers, and customers.
As I said at the beginning, this bill is also anti-Māori. I draw members’ attention to bereavement leave, which will be a huge problem for employers. This Government thinks it is being culturally sensitive, but in clause 62 there is a definition of the purposes of bereavement leave, and details as to when employees can get it. It refers to “any cultural responsibilities of the employee in relation to the death.” We all know what “any cultural responsibilities” means—it means virtually whatever some judicial activist would take it to mean. What employer would employ Māori when he or she fears that all his or her Māori staff could take bereavement leave—which will now be granted on top of sick leave—because they have to go to a tangi? There will be severe detrimental effects for Māori employees throughout the country from that very loosely defined clause in the bill. With things like that, employers and employees have to deal with each other in good faith; otherwise, as my colleague in the National Party has said, they will face draconian penalties. What is “good faith”? Who knows. It is like “cultural responsibilities”. It will be whatever a judicial activist takes it to mean.
ACT is totally opposed to this bill. Anyone who thinks that it will be cleaned up in the select committee has to be absolutely dreaming. If this is what the New Zealand First Party thinks of as tidying-up, I would hate to have seen the bedrooms of its members when they were sent there by their mothers to tidy them up. I imagine every drawer would have been pulled out and up-ended on the floor.
HELEN DUNCAN (NZ Labour)
: I am pleased to have the opportunity to speak briefly on this bill. I believe it is a forward-looking bill that will be good for New Zealand’s development. It is designed to improve workplace productivity in the long-term, and to recognise the importance of a work-life balance for all employees. It builds on the consultative provisions of the Employment Relations Act, the amendments to the Health and Safety in Employment Act, and the introduction of paid parental leave. It provides much-needed certainty, clarity, and consistency around the holiday entitlements of workers. It reflects the work patterns of modern business, and the diversity of our modern work force. It keeps in place the base entitlement to 3 weeks’ leave, but it provides some fairness in giving extra pay for working statutory public holidays.
For some time there has been no recognition that working on a day when other people have a public holiday takes away the ability of many ordinary working people to be with their families. There needs to be some recognition of that loss. If they work on a public holiday that for them falls on a normal working day, they will now be entitled to an alternative day off, as well as some extra pay. It puts fairness and consistency in place, ensuring that all public holidays will be treated the same way. That will make it easier for employers to apply the law, and it will lower their compliance costs, rather than raise them.
Both employees and employers find the current Holidays Act outdated and difficult to understand. One just needs to look at the number of complaints made to labour inspectors and to the Employment Relations Service information line for an idea of the size of the problem. During 2002, 75 percent of all complaints to the labour inspectorate were related to holidays. During the same period, 26 percent of all inquiries to the Employment Relations Service information line also related to holidays. It is an area that definitely needs attention.
I am particularly pleased that employees can now accumulate some sick leave. In the past, people could not accumulate their sick leave if they did not use their 5 days’ entitlement per year. Now they can accumulate up to 15 days. That means that people
who have a serious illness and need extra time off work can, if they have accumulated their sick leave, take a reasonable amount of time off. That seems to me to be very fair, indeed.
Although some elements of the business sector have welcomed the bill because it brings much-needed consistency to the application of the holidays law, unfortunately we also have the usual howls from the prophets of doom and gloom—mainly the National Party and ACT representatives here, who are always consistent in opposing any improvements to the conditions of the ordinary working people of New Zealand. But sensible business people know that workers who feel appreciated, and are rested and refreshed by having reasonable holiday and sick-leave provisions, are much more productive. They also recognise that a time of bereavement can be very stressful, and that it is good to have a separate leave entitlement for that particular time.
Whatever the Opposition has to say about increases in wages and salaries, this law is good news for New Zealand business. It will result in lower compliance costs through more clarity, greater efficiency in businesses because of fewer hassles over holiday entitlements, and improved staff morale. That will lead to lower turnover rates, greater productivity, and much better relationships between employers and employees. I commend the bill to the House.
SUE BRADFORD (Green)
: The Green Party is really pleased to see the Holidays Bill finally on Parliament’s agenda today, though we have one major caveat: we would have liked to see the bill entrench a minimum of 4 weeks’ paid holiday leave for all workers, rather than the meagre 3 weeks put forward by the Minister in the new legislation. We think it is a real pity that Labour did not take the bull by the horns, as it were, and incorporate into this bill the intent of Matt Robson’s member’s bill, which was to provide for 4 weeks’ leave. After all, it is high time that all New Zealand workers, including those on the lowest wages and working in the poorest conditions—those who are least likely to have been able to negotiate 4 weeks’ leave—had the benefit of 4 weeks’ holiday.
I think most of us recognise that, over the last 20 years, those people who have been lucky enough to be in regular work have tended to work longer and longer hours, and often in much less secure positions than in earlier times. Workers are feeling more stressed, while at the same time having less time to spend relaxing with their family or friends. There is a lot of talk at present about the work-life balance, and, to us, allowing all workers the privilege of 4 weeks’ leave a year would seem to be the minimum period, in terms of people having enough time away from work to really recover and to spend quality time with their partners and children.
On top of that, I think we all realise that in this day and age many mothers, as well as fathers, are in the workforce, making it even harder for parents to cover school holiday periods adequately. We talk a lot in this House about giving children a fair deal and about improving family relationships. Three weeks’ leave shared between two parents, or held by one parent on his or her own, is nowhere near to being enough time to allow that to happen, and I hope that on those grounds alone United Future will see its way clear to support Green moves to add an extra week’s holiday leave to this bill. I am also hopeful that when Matt Robson’s bill comes back to the House, Labour will find itself able to support it to the select committee as soon as possible, so that everyone concerned with improving the holiday legislation can make submissions on both bills at the same time.
During the process of getting the Employment Relations Bill through the House, the Green Party was well aware that the whole matter of holidays was an area that needed tidying up. We know that since the passing of that Act, a lot of work has been done by the Government, employers, and unions to try to reach some kind of agreement on
modernising and improving the holiday legislation. Although the Green Party has not, of course, been part of that process, it is good that at least some of the problems have been worked through already by the tripartite advisory committee prior to the bill being drafted. However, how much consensus has been reached in practice will, I am sure, be shown in stark relief during the select committee proceedings.
Apart from carrying out a badly needed overhaul of the current legislation, which basically remains rooted in the 1940s, this bill brings forward a number of clarifications and improvements that I am sure will be of benefit to both staff and employers. The Green Party is pleased that, for example, employees who work on public holidays will have to receive time-and-a-half and a day off in lieu, that bereavement leave has been clearly separated from sick leave, that sick leave can be accumulated as of right, that clarity has been given to the status of Waitangi Day and Anzac Day, and that guidance has been given on the holidays that are allowed to accrue, and when that may occur.
We also think that the provision of a clear methodology for calculating annual holiday pay in a wide range of circumstances will be of tremendous benefit to employers, both large and small, who have often struggled with the complexities of that in the past. The Green Party is well aware of the problems that small-business people and community organisations encounter when dealing with new workplace legislation. In this particular case, I think the Government is paying attention to the problems that such employers face, and once any problems in the detail are ironed out during the select committee process, I feel confident that this bill will provide a clear and useful guide for employers in determining the application of holiday and leave entitlements. This bill will help to keep compliance costs down, rather than the reverse of that.
Apart from the fact that the bill allows for only 3 rather than 4 weeks’ leave, there is one other area about which we have some concern at this early stage, and that is around the question of sick leave. The bill does a good job in clarifying that all employees are entitled to a minimum of 5 days’ sick leave a year, and that that sick leave is separate from bereavement or tangi leave. But what it has not done is to separate out what some of us call domestic leave, which occurs when a worker takes time off work in order to care for a dependent family member who is sick or injured. One of the hardest things for two-parent families where both partners work, and for sole-parent families where the caregiver works, is what happens when a child becomes ill and needs care at home. In the old days it was assumed that one parent, usually the mother, would be at home with the child as a matter of course. Now, with so many parents of dependent children working—often simply to ensure the family’s survival as much as for anything else—it has become a real nightmare for parents when children fall sick and have to stay at home.
The Green Party would prefer to see a separation of domestic leave from both sick and bereavement leave, with a separate minimum entitlement for all workers to whom it legitimately applies. We feel it is incumbent on all of us to face the realities of modern working life and not to pretend that we are still living in the 1950s. Employers benefit from greater productivity when staff are not stressed about having abandoned their children at home, children benefit from having their mother or father with them in their hour of need, and society as a whole benefits when we look after each other properly. After all, that is what this bill is really all about. It is about bringing holiday and leave provisions for New Zealand workers into the modern age and dealing with the realities of working life in 2003, not 1943.
It is almost inconceivable for some of us now, looking back, to realise it was only about 30 years ago that workers won 3 weeks’ annual leave, up from 2 weeks. We need to make the same kind of leap again now. In years to come, it will be just as inconceivable that we waited so long to allow all workers to have 4 weeks’ holiday a
year as it was to some people in 1972 that we should allow all workers to have 3 weeks off a year. Society has changed hugely in that time. Women now make up nearly 50 percent of the workforce, and as much as some conservatives would like it not to happen, the vast proportion of us are working, either by choice or by economic necessity, and are in no hurry to rush back to a full-time life of childcare and housework.
All workers deserve adequate holiday and other leave entitlements. I hope that both Labour and United Future will see their way clear not only to support the bill as far as it goes but also to amend it during the select committee process, in order to provide for a much more reasonable 4 weeks’ leave for all. I also hope that we will see this bill passed in time for Christmas, so that all workers will receive the benefit of clearer entitlements by the time 25 December 2003 rolls around.
DAVID BENSON-POPE (NZ Labour—Dunedin South)
: I am pleased to rise in this discussion, and I would like to compliment the previous speaker on her very moderate and rational discussion of the issues. There are some substantial issues here. It is interesting to note—and it is an acknowledged fact—that both employers and employees find the current Holidays Act outdated and difficult to understand. Interestingly, the National Opposition is again out of step with its normal backers in Business New Zealand, who consider the bill to be “more streamlined than the current legislation” and “simpler and more coherent than existing legislation”. That is an extraordinary situation, and we welcome it. I am pleased to support the referral of this legislation to the select committee, which I am sure will make any necessary improvements should there be any.
JOHN KEY (NZ National—Helensville)
: It is my pleasure to participate in the first reading of this bill. I have no doubt that no member of this House and no member of the public will be surprised to see this legislation being introduced by this minority Labour Government. I say that because this Government is full of academics and unionists who would not know a job if they fell over one. Those members have never had jobs in the real world. In fact, the Government is so out of touch with business that when it made its listing of what Ministers owned, we learnt that only one Minister on the Government side of the House owned shares in any company in New Zealand. So it is a bit rich that Government members come in here and introduce legislation that will affect every business in New Zealand when they would not know what a decent job was, even if they had one. That is what is happening. No New Zealander is surprised by this bill, and I certainly am not surprised by it, at all.
The Minister has heralded this legislation as providing certainty, clarity, and consistency.
Hon Annette King: Whose back did you climb on?
JOHN KEY: In case the Hon Annette King did not hear me—and she is chipping away out of her retired caravan; there are a number of things we would like to see retired in the Labour Party, but a caravan is not one of them—certainty, clarity, and consistency is what the Minister said that this legislation would provide. Well, I will do something that I do not normally do: I will agree with the Minister. I will agree wholeheartedly with the Hon Margaret Wilson, the real face of the Labour Party, that this legislation certainly will give certainty, in terms of compliance costs. Compliance costs will go in one direction if this legislation comes into force—and that is not down. Compliance costs will go up. One hundred and eighty thousand businesses from Kaitaia to Bluff will have a special present from the Hon Margaret Wilson yet again, in the form of more compliance costs. There will be consistency all right; not one business will be missed. Not one nook and cranny will go unturned. All businesses will have a minimum of a whopping $7,000, and maybe more, added on to their bill. That is what
This legislation will certainly be anti-employment. There are 400,000 New Zealanders of working age on a benefit of some sort, 120,000 of whom are on the unemployment benefit. I simply pose this question: will this bill add to the likelihood of employment going up? Not a chance! I predict very confidently that when this legislation is passed, unemployment will be on the rise, and those people without a job who are sitting at home and unable to provide for their families will not be writing letters of thanks and congratulations to this minority Labour Government. They will not be doing that, at all. Mr Cosgrove has entered the House, and I say that in his home electorate of Waimakariri business will not be thanking him for this bill. There is great certainty here in this bill.
Dr Cullen has come into this House and said time and time again that businesses in New Zealand do not pay tax. He has said we should not worry about cutting the corporate tax rate, because 95 percent of businesses do not pay tax. Well, there is a reason that businesses do not pay tax: they do not make money. And they do not make money because that Minister just keeps on wanting to lump compliance costs on them. Businesses do not even have an opportunity to do an honest day’s work and to employ honest New Zealanders, because every which way that they turn compliance costs get whacked on them. There will be certainty, all right, with this legislation—certainty that it is bad. The unemployed want jobs, and they do not necessarily want the nice little bits and pieces that this legislation tries to introduce. They just want a job.
Let me turn to clarity.
Clayton Cosgrove: This bill provides that.
JOHN KEY: Well, I tell Mr Cosgrove that the bill does provide clarity for me, because it once again shows the true face of the real Labour Party, not the thing that one sees parading at the knowledge wave conference. Well, let me quote the Hon John Tamihere. He said the Labour Party was bullshitting about its social welfare policy. Well, he will be making the same statement when he talks about whether this legislation is good for employers. If any Minister says that it is, John Tamihere will have to go to the knowledge wave conference once again and correct him or her, because that is what any such Minister would be doing. I will not use that term very often in this House because it is a little unparliamentary. But I read that quote in the
and I thought I should just share it with this House.
Finally, there is consistency. There is supposed to be certainty, clarity, and consistency in this bill. Those were wonderful words from the Minister. I say yes, it will be consistently harder to do business in New Zealand.
Why has this legislation come to the House, when it is so bad? That is a pretty good question. Why is it being introduced?
Lindsay Tisch: What’s the answer?
JOHN KEY: I tell Mr Tisch that the answer is that blood is thicker than water. This is just round two of pay-back time for the unions. I stood in this House and spoke at length in the debate on the health and safety in employment legislation. When it was passed I looked to the gallery, and I saw that members of the unions were there on their feet, applauding. I predict exactly the same thing will happen when this legislation is passed, because that is whom it is good for. It is not good for those people who are really trying to employ New Zealanders or for those people who are looking for a job. It is not good for those 120,000 unemployed New Zealanders, and neither is it good for young people who are working hard in tertiary institutions to get qualifications so that they can get a job. It is not good for any of those people. But it is good for the cronies of the Labour Party, and they will be on their feet again in this House and clapping because round two of pay-back time will have happened. Mr Cosgrove knows that that
is correct. Even if Mr Cosgrove does not appear to be nodding I bet he is nodding inside, because he knows that I am right.
I want to turn for a moment to some of the specifics of the bill. But before I do that, I want to make one simple comment. This legislation will add to one thing in our labour markets—inflexibility. If members know anything about driving an economy forward and making a country better to live in, then they will know we need to have flexibility in the employment markets more than anything else. For the benefit of those who have not studied economics at all—in other words, the entire Labour Cabinet—I suggest that they look at Japan. They will see Japan has massive inflexibility in its employment legislation. Today it will be proposing a new central bank governor for the Bank of Japan. That will have absolutely no impact, like everything else in the last 10 years, because Japan has massive inflexibility. That is what we are driving in New Zealand, with this bill.
I will talk for a few moments about the specifics of the bill. In particular, let me look at the point relating to sickness, which is a real doozy. There is still no requirement for employees to produce evidence of illness in order to use accumulated sick leave. One does not even have show that one is sick in order to carry that leave forward. One does not have to do anything. But I guess that is good for business somehow, is it? Businesses all around New Zealand will have people accumulating sick leave from one year to another. Potentially, 15 days will be accumulated, and that is a massive liability for businesses. Will that make people go out and work?
I now turn to some of the absolute specifics of the bill, in terms of employers having to pay time-and-a-half and a day in lieu. What will that mean to the tourist sector? Hospitality New Zealand told us what it would mean. [Interruption] The people from Hospitality New Zealand are wonderful; I know them well and they do a fantastic job. They said in a nutshell that we will receive worse service and it will cost us more. That sounds like a recipe for having a good time on a statutory holiday, does it not? That sounds like a good idea! When we go down the road to a pub and ask for a beer, the barman will say he or she is actually an employee who is covered under the holidays legislation, so our pint of beer will cost $18. That is probably what it will cost. If we ask why is it so expensive, the barman will say that because he or she is being paid time-and-a-half and has to have a day off, the employer has to employ other people. That is what will happen. That will not make New Zealand competitive and will not drive employment.
We know why this bill is here in the House. This is a lead-on for Matt Robson’s Trojan Horse of 4 weeks’ holiday. New Zealanders already have 3 weeks and 11 days of holidays, and they will get more when that legislation goes through.
JILL PETTIS (NZ Labour—Whanganui)
: Was that not just a predictable speech from an old Tory? The Tories make sure they take their holidays at any time they want to. They make sure they maximise their holiday opportunities, yet here they are trying to deny decent, hardworking people the right to holidays. This bill is designed to modernise the workplace, and they want to take us back to the time of the dinosaurs. This bill is about improving productivity and ensuring that people have a proper balance between their work and home lives. This is a good bill, and the Opposition members should support it. They should get themselves into the modern world.
LINDSAY TISCH (NZ National—Piako)
: It is interesting that the people who have been putting up the argument for the Government are those who do not have an understanding or a feel for what business is all about. They have never put a dollar at risk, and here they are telling us what should happen. They are telling employers—the people who really grow the economy, are innovative, and take the risks—what they should be doing and how they should be running their businesses. No one begrudges
anyone having the sorts of conditions that one would like, but it will boil down to individual agreements. It will boil down to those people and businesses prepared to grow the economy, make money, put a dollar at risk—there is nothing wrong with that—and being able to pass that on to their employees.
Over the years I have run many businesses. I have a business now, and it is not double-dipping either. It is a business that has concentrated on restructuring and refinancing. As a trouble-shooter in a previous life, I have looked closely at how we can get businesses to grow. One of the big costs associated with business is labour—the cost of employees. We want to be able to give them incentives that will concentrate the mind and get them to participate. Employers then get the best out of people. The member from United Future talked about what he does and has done. In his business he has paid the unpaid sick leave provision. I have always done that. If my employees have not taken the sick leave provision that we negotiated in the contract, I have written out a cheque for them as a bonus, to say thanks. I have not had to go out and find somebody to take their place; they have been able to continue work, and so it has been a win-win situation. I have acknowledged their loyalty and commitment and given them a bonus, because I believe that is important in staff relations.
This Holidays Bill will put huge compliance costs on business. The Government has talked about growth and innovation, yet in the next breath it wants to stifle initiative. It wants to bring in huge compliance costs that will add burdens to the economy and to employers. My colleagues John Key and Roger Sowry talked about the bereavement leave entitlement. The entitlement to those 3 extra days, which is not currently there, will be paid out for the death of a close member of the family. How will we define who that member of the family will be? Will it be for each member of the family who passes on? What will be the limit? The bill does not state 3 days in total. It states 3 days’ bereavement leave for a close relative, so employees could have quite a few days off, and that is unacceptable. Business people cannot run their businesses if we have open-ended legislation like that.
Others have talked about the fines. The current fine for breaching these requirements is $500, yet for an individual, a sole trader—and most businesses in New Zealand are sole proprietorships and sole traders—the fine will go up from $500 to $5,000. If I am in a partnership, I will also be hit by a $5,000 fine. And what about companies? To get around the draconian tax laws this Government has brought in, there has been a huge move into company formation. Those laws state that if one’s taxable income is over $60,000, one pays 39 percent tax, when as a company one pays 33 percent. No wonder there has been a huge move into company formation! We have a Government that will not reduce the corporate rate down to 30 percent, as it is in Australia, so we have been hit immediately. [Interruption] Oh they do not know, because they have never been in business. They would not have a clue. They do not know what makes the world go round. We have been at the coalface. We are the people who have put up the investment and taken the risk. If we take the risk, we expect to make a dollar. That is how we improve the situation, employ staff, and grow our businesses.
I will quote from an article entitled “Holiday bill flexes business” in the
New Zealand Herald
of 19 February: “What it does is add to the complexity and cost of employing. For some, it might be the straw that broke the camel’s back, and for others it might just be yet another issue that has to be dealt with.”
Opposition Member: Same tired old line.
LINDSAY TISCH: The member talks about the tired old line. This is not me saying this; it is what a commentator in the paper, who knows a little about what business is about, is saying.
There are some other points that I want to bring to the attention of the House. There
are 11 paid statutory holidays at the moment, and this bill is saying that if someone works on a statutory holiday, and it is not part of that person’s agreement now, he or she will get time-and-a-half and a day off in lieu, as well. In negotiating employment contracts—and I have had some experience in that field—we have always made provision for penal rates if an employee works on a statutory holiday, so that is not the issue. What we are dealing with now is a situation in which firms in the hospitality or tourist industry will be hit very severely. I talked to a restaurant owner at Whitianga in the last couple of weeks, and he said that if this legislation comes in in its current form, he will not open on a statutory holiday. He does not make any money out of that at the moment because of the rates he has to pay. He does it as a service to the community, but if this legislation comes in now, he will close his doors.
Many hospitality and tourist industry employees are part-timers, and that has been its success. As we freed up the labour market in the nineties, it allowed people to get involved in those industries. This bill is a complete contradiction; it will make it very difficult. Do members remember the saying before the 1990s? “Don’t arrive in New Zealand at the weekend, because you will find it closed.” That is how it was, because we had such restrictive laws about employing and the way we did business. National turned that around. We have grown the economy, allowed people to take the risks, and at the end of the day there has been some reward in it for them. We want to make sure that continues.
I come back to the point in the bill about what this will cost. There is much information about the extra cost of employing. If one is working during statutory holidays, the extra time-and-a-half will add about 1 percent to the wage bill for employers. That is what Business New Zealand has said. They are not my figures. For a medium-sized business, employing 20-odd people, the cost will be about $7,279 a year. Businesses just cannot handle that sort of extra compliance cost. The Chief Judge of the Employment Court said just before Christmas, and again this last week, that if an employer were to dismiss somebody and it was found to be unlawful, a minimum of $20,000 should be paid in compensation. I do not know any small businesses around the country that are carrying a spare $20,000 in their pockets. The reality is that the marketplace is very competitive, and one of the things we want to do is give people an incentive to invest and grow the business, but that is certainly not going to happen.
This Government has brought forward a number of other anti-business policies. The 4-week amendment coming up will add considerably to the cost of doing business. The Accident Compensation Corporation has been renationalised, and the amount of money built up in that fund from the employers’ levy is likely to be used for workers’ sickness provisions.
There are changes to the occupational safety and health regulations—covering stress and mental fatigue in the workplace. I wonder what will that mean at the end of the day? We will be seeing that issue debated in the courts. I wonder whether employers will be able to get accident compensation for stress-related work incidents. The Kyoto Protocol has been signed. Wait till that hits those people who have to pay extra carbon tax! One of the most draconian things in the pipeline would affect employers selling their businesses and have staff that would go over to the new owner. However, if staff do not want to go over to the new owner, then redundancies would be paid. That is absolutely draconian.
This Government talks about the need for investment, growth, and innovation if we want the economy of this country to grow, but it puts on the compliance costs I have just mentioned. The way this Government is going, we certainly will not be achieving growth. This is an anti-business Government. It has no understanding of what it takes to grow the economy, or what it takes for business to make investments. National will not
be supporting this bill.
A party vote was called for on the question,
That the Holidays Bill be now read a first time.
||Labour 52; New Zealand First 13; Green Party 9; United Future 8; Progressive 2.
||New Zealand National 27; ACT New Zealand 7.
|Bill read a first time, and referred to the Transport and Industrial Relations Committee, referred to the Transport and Industrial Relations Committee.