Adams Paul: Holidays (Four Weeks Annual Leave) Amendment Bill — First Reading 
Adams Paul: Holidays (Four Weeks Annual Leave) Amendment Bill — First Reading 
[Volume:606;Page:4023] 
PAUL ADAMS (United Future) 
: 
 There is one thing I like about this bill and that is the size of it. It did not take long to get through the paperwork on it. United Future opposes this bill. Many would be tempted to support it. Who would not like 4 weeks’ holiday? Even with provision for 3 weeks’ annual leave in a society where people are working 24/7 very few people are able to get 3 weeks’ holiday in a row especially small-business owners—and 95 percent of our businesses are small businesses. I think they would love to get even 10 consecutive days’ holiday in a row. 
According to public comments from the member who is sponsoring this bill annual leave falls into two categories. The first relates to compatibility across countries. The United Kingdom Ireland Greece Australia Germany Switzerland and Norway give workers 4 weeks’ paid holiday leave whereas France Denmark Austria Spain and Finland give their workers an entitlement of 5 to 6 weeks’ paid holiday leave. About 17 out of 29 OECD countries have more annual leave than New Zealand but that also means that 12 OECD countries have less or equal entitlement. Most of those countries have higher rates of unemployment than New Zealand does and have introduced extended leave periods—and in the case of France a 35-hour week—to soak up some of the excess workforce. Economists call this the “lump of labour” approach. 
If the same logic is applied to the extension of leave in New Zealand to 4 weeks one sees that it would aggravate the skills shortage that currently exists. According to the post-election briefing from the Department of Labour about 95 percent of businesses in New Zealand employ fewer than 10 staff members. New Zealand has the highest proportion of small businesses than any other country in the Western World. In a supplementary question to the Minister last year I made the point that a move to 4 weeks’ leave would increase the total cost of wages and stretch the staffing resources of small businesses in an age when they are expected to operate 7 days a week and in many cases 24 hours a day. Every time a staff member goes on holiday or is away on sick leave a tremendous strain is put on those small businesses and their owners. 
In terms of comparability over time the argument is that previous increases to paid annual leave—to 2 weeks in 1944 then to 3 weeks in 1974—occurred at 30-year intervals. The approach of that 30-year anniversary is not a sound basis for policy making. 
The other argument proposed in favour of the bill is that by giving workers another week’s leave we might actually increase productivity. I agree that a rested worker might be a better worker because I have seen staff members who work 7 days or 10 days in a row become like zombies. They do not know one day from another. That is very common in New Zealand’s workforce. United Future agrees that a better work-life balance is the key to improved productivity but thinks that there are better ways to achieve it without the cost and strain that 4 weeks’ leave would place on employers. People today are placing greater value on a balance between their home life and their work life. Many people I know are taking a drop in income to have a better lifestyle. Firms are moving to alternative arrangements such as flexible time compressed weeks and payment on the basis of productivity rather than the punch-clock. 
The Equal Employment Opportunities Trust hands out awards each year to companies and organisations that it thinks are achieving a good work-life balance. For example the Auckland University of Technology won an award for a scheme that allows staff to work for 4 years at 80 percent of their salary and take the fifth year off. Research shows that a better work-life balance achieved through flexible working arrangements tends to increase staff retention saving employers the significant cost of replacing them; reduce absenteeism; and increase job satisfaction. We think the Government should be encouraging that.