Prebble Richard: Holidays Amendment Bill — In Committee 
Prebble Richard: Holidays Amendment Bill — In Committee 
[Volume:620;Page:16028] 
Hon RICHARD PREBBLE (ACT) 
: 
 We are dealing with an amendment to the Holidays Act and I rise on behalf of the ACT party to say that not only will we be opposing this bill but we have had a look at Dr Wayne Mapp’s amendment and we would recommend very strongly to the Committee that it support that amendment. I tell the Minister that he would have been very wise to read the submissions on the bill. What the Committee should understand is that the business community was not given a chance to make submissions. The Transport and Industrial Relations Committee invited submissions from just a number of industries and it could have gone wider than it did. I think that the submissions received by the select committee were devastating in their effect and one of them was this. Human beings take a while to adjust to new incentives. We all know that. The legislation came into effect only in April. The meat industry which is still our largest single exporter produced this extraordinary chart which members may not be able to see but they can get a copy of it from me. It shows the cost of sick pay and how that cost has increased since April. When one studies the chart one finds the cost of sick pay—which has been normalised—was $16 million which is a very high figure and it has already jumped to $27 million just since April. 
 What would cause the rate of sick leave to go up? We could look at Ministry of Health statistics to see whether we have had an outbreak of any disease. No we have not. So clearly there is something in the nature of the Holidays Act that has caused the increase and what it is is the late change about relative daily pay. Instead of sick leave being based on a person’s ordinary pay it is now based on a person’s total payment. What is unfair about that is that someone may have had included in his or her pay an incentive for turning up to work. Now according to the Government that incentive must be paid to people who are sick. Of course it costs money to go to work and as the meat industry pointed out people are actually being paid more not to work than to work. Human beings do respond to incentives. I know that the Greens do not necessarily believe that but people do respond and they are responding. If they are to be paid more for not working than for working people stay away and in shift-work situations some bizarre situations arise if people have just received a large bonus because the relative pay is not worked out on the basis of the whole year but on what happened in the last 4 weeks. 
We were given an example by Heinz-Wattie a very large exporter of a particular person who is normally paid I think $16 an hour and the company had to pay him $38 an hour to stay away from work. The incentive to stay away is great. Then we go to Carter Holt Harvey—I think it is our largest company; if not it is very close to being that—which told us that the average number of sick days each employee has is 100. Now that was calculated first at the ordinary rate of pay but many of the staff work on shifts so Carter Holt Harvey’s contingent liability has gone through the roof. But it made another statement to the effect that it is a multinational company so it can choose where to invest. It asked why when it is thinking about investing it would choose to invest in a country where we have a loony system whereby its staff are paid more for being sick than for working. The Kawerau plant produces over 1 percent of the total gross domestic product of New Zealand. 
I thought it was very interesting that the Minister told the Committee that the reason that the provision was not changed was that it was not an “unintended consequence” of the Act. We listened to Ministers earlier today say that at the IMF this country had been described as the best place to do business but that was because of changes made before the Act. The Government cannot have it both ways: it cannot say it is wonderfully flexible and then introduce all these inflexibilities. Where does it stand? I ask Government members why this is not a matter that employers and employees can settle for themselves. They have been doing that for most of the history of this nation. We did not need the Government to come in and define relative daily pay. That is an example of the Government interfering in the marketplace and my recommendation to the Committee is that we should support the amendments put forward by Mr Mapp.