Minimum Wage (Starting-out Wage) Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Minimum Wage (Starting-out Wage) Amendment Bill — Second Reading 
[Sitting date: 14 March 2013. Volume:688;Page:8578. Text is incorporated into the Bound Volume.] 
Minimum Wage (Starting-out Wage) Amendment Bill 
Second Reading 
Hon SIMON BRIDGES (Minister of Labour) 
: 
 I move  
That the Minimum Wage (Starting-out Wage) Amendment Bill be now read a second time 
. I thank the members of the Transport and Industrial Relations Committee and its chair David Bennett for dealing with this bill so swiftly and efficiently. The select committee reported back to the House on 26 February and recommended that the bill proceed with some amendments. I agree with the amendments proposed. In addition I intend to make some minor technical changes to the bill through an amendment to be tabled at the Committee stage. These technical changes will provide further clarity around the meaning of continuous employment clarity on the timing for which a person is no longer eligible for a starting-out wage and changes consequential to the Minimum Wage Order 2013 coming into force. 
In New Zealand and worldwide young people have been severely affected by the recession. The household labour force survey shows that young people under the age of 20 have been more negatively affected in employment terms than older groups of workers. In the past 5 years there has been a drop in employment for young people aged between 15 and 19 years of about 42 percent. 
International research shows that long spells of unemployment and inactivity may permanently lower young people’s future employment prospects particularly where they are low skilled and inexperienced. Like other OECD countries New Zealand is responding to the negative effects of the global recession on young people. A reduced minimum wage is used in several countries including Australia and the United Kingdom to encourage youth employment. We need to ensure that young people are ready and equipped for work as the economic recovery gains momentum. 
I am confident that the Minimum Wage (Starting-out Wage) Amendment Bill will assist young and inexperienced workers to gain a foothold in the labour market. To achieve this aim the bill will enable the setting of reduced minimum wage rates by Order in Council for certain groups of young people aged 16 to 19 years. 
The rates will be set at no less than 80 percent of the adult minimum wage. It is intended that three groups of young people be targeted for the starting-out wage. These are 16 and 17-year-olds in their first 6 months of work with a new employer 18 and 19-year-olds who have been paid a benefit for 6 months or longer and who have not completed 6 months of continuous work with any employer since starting on the benefit and 16 to 19-year-olds in training in a recognised industry training course involving at least 40 credits a year. 
The intent of the starting-out wage is to support young people who are new to the workforce into long-term sustainable employment by providing incentives for employers to take them on. For young people the starting-out wage will provide them with an advantage in the labour market so they can gain the necessary skills and work experience that will assist them throughout their working lives. 
The bill limits the period for which an employer can pay a starting-out wage to a young person working for them who is not supervising or training others to a period of 6 months. After this time the young person will be entitled to be paid the adult rate by that employer. This bill encourages continuity with the same employer. Young people—like all employees—with a steady work history are seen as less risky for employers to take on. This puts a focus on young people gaining work experience at a steady job and becoming better equipped for their future employment. 
This Government recognises that there is a need to provide for more vocational training opportunities for 16 to 19-year-olds. It is important that young people are given opportunities to engage in training for industry. Employers so far have indicated that they are not using the training minimum wage. The bill provides for young people aged between 16 to 19 years who are required to undergo training as a condition of their work to be paid the starting-out wage rather than the minimum training wage. 
The number of annual training credits will be changed from 60 to 40 through an Order in Council for 16 to 19-year-olds to give them the flexibility to choose a range of courses without having such a heavy workload. Reducing the credit requirements to at least 40 credits per year for 16 to 19-year-olds will support more young people to gain skills in their chosen industry. The lower credit requirement means that more people will qualify for the starting-out wage than did for the training wage so more employers will opt to train young people. 
The select committee received a range of submissions on the bill and it has given thorough consideration to the issues raised by submitters. As a result some minor amendments have been recommended. An amendment is proposed to clause 2 of the bill which provides the date on which the bill comes into force. The select committee recommends changing the commencement date of the bill from 1 April to 1 May 2013 to provide sufficient time for employers and young people to be fully informed about how the starting-out wage will affect them. 
This will not affect the making of this year’s minimum wage order which as it did last year is intended to come into force on 1 April. Nor will it affect those on the new entrants wage who will receive the higher of the new entrants rate or the new starting-out wage rate for 16 and 17-year-olds until they have completed their 3 months or 200 hours of employment under the current law. 
Clause 4 replaces section 4 of the principal Act which authorises the Governor-General by Order in Council to prescribe minimum rates of wages with new sections 4 to 4B. The select committee proposed a small number of technical amendments to the bill under clause 4 to clarify its operation. One amendment clarifies that when the bill refers to “continuous employment” continuous work counts from the worker’s first day on the job and is taken to mean any amount of work regardless of hours per week done on an ongoing basis for an employer. Another amendment clarifies that the time before a young person turns the age specified in the starting-out wage Order in Council would count towards their eligibility for the starting-out wage. These are sensible recommendations and I thank the select committee. I would also like to thank the people who took the time to make a submission on the bill. 
The Minimum Wage (Starting-out Wage) Amendment Bill is the latest in a series of steps the Government is taking to get more New Zealanders into work and into jobs. The Government’s continued focus on getting young people off benefits and into work has already seen thousands of young people benefit from subsidised work placements and pre-employment training. The Minimum Wage (Starting-out Wage) Amendment Bill is part of this wider package to help get more young New Zealanders into work or training. It provides real incentives for employers to take on young people and give them the opportunity to gain work experience and skills that will stand them in good stead for their future working lives and careers. I commend this bill to the House. 
DARIEN FENTON (Labour) 
: 
 Well I do not think there is anything for that Government to be congratulating itself on when the time frame for the submissions on this Minimum Wage (Starting-out Wage) Amendment Bill has been shortened. When we are considering something as important as cutting workers’ pay the least the Government could have done was give the normal period of time and not rush it through the Christmas period when people did not have the chance to make submissions. Needless to say there were more than 500 submissions—531 actually—received on this bill of which 522 were opposed; only nine were in favour. The reason for that is that this bill is going to put young workers back on the scrap heap of youth minimum wages. It is the economic failure of this Government and it is putting its failures squarely on the shoulders of our young people. 
This bill reinstates youth rates not only for 16 and 17-year-olds but also for 18 and 19-year-olds—something we have not seen in New Zealand since last century. Rather than making bold plans to tackle the urgent crisis of youth unemployment—27000 under-20-year-olds are not in employment education or training—the Prime Minister and the Government have once again demonstrated their contempt for young people and also the fact that they have no ideas. This bill is based on the flawed idea that cutting wages is a way to grow jobs; it is a tried and failed policy of last century. 
We all know that there is a problem. No one is denying that. There is a national crisis in youth unemployment. But we do not agree that cutting wages for 16 and 17-year-olds or 18 and 19-year-olds who have been on a benefit for 6 months will make the difference that is needed. Cutting wages and making workers easier to fire as this Government has been doing has not created jobs in the past for young people and is not creating jobs now. There are now 90000 young people out of work education and training. That is an increase of more than 10000 in the last year alone and that is shameful. That is despite the fact that Government members get up every time they have the opportunity and boast about the 90-day trial period. It has done nothing. It has done nothing to help youth unemployment. I find it very astonishing that the Prime Minister admits he could not live on the minimum wage of $13.50 an hour—soon to go up by a paltry 25c an hour—and as he admits at the same time he still expects young people young 16 to 19-year-olds to live on something like $10.80 or $10.90 an hour. 
What young people need is hope. They need hope and the skills to succeed in the job market and achieve higher incomes and better jobs. Creating a high-skill high-wage economy is the way to go about this to give our kids hope for the future not cutting pay. We all know that the next generation of this country is hollowed out. Numbers of our kids are getting on the plane for Oz. Numbers are already saving up their airfare to go to Australia because they know that even there where there is a youth minimum wage it is going to be a lot higher than here. But this Government does not listen it did not listen to the submitters and it just blunders blindly on. 
You know what was interesting during the submissions was that even employers were less than enthusiastic about sub-minimum wages. In a survey done by the Ministry of Business Innovation and Employment last year it found “a key theme arising from the quantitative interviews was a lack of incentive that reducing the cost of labour or wage rates was for employers in hiring staff or filling vacancies. In fact only a small number of employers suggested reintroducing youth minimum wages would improve their likelihood of employing 16 and 17-year-olds.” The employers are saying that they are not going use this so it is going to fail in its aim of cutting youth unemployment. The Employers and Manufacturers Association submission was interesting. It told the select committee that cutting youth pay is not a silver bullet and that there needs to be a whole range of measures of changes rather than this single one-eyed approach. 
The fundamental question that goes to the heart of this bill however is whether it is fair or right to pay workers less because of their age—to discriminate against them. The implication of this bill is that the work of younger workers is of lesser value than that of older workers it perpetuates its stereotype of young workers as being unreliable and incapable and it ignores the fact that many young workers have already had considerable work experience at the age of 16. 
Many people who support youth rates say that young workers need more training and support when they start a new job. But that same logic applies to anyone who starts a new job. There was a time in this country when people said the same about women and indeed Maori. They said they were worth less because they were women and because they were Maori. In fact up until the early 1970s women on the minimum wage were paid less than men. In the early 20th century Maori were paid less than other workers. No one today would imagine tolerating that type of discrimination but here we have the Minimum Wage (Starting-out Wage) Amendment Bill which perpetuates discrimination on the basis of age. We cannot discriminate against older people. We cannot discriminate against people on the basis of being older. Some argue that older workers are less productive yet there is no age-based minimum for them. 
As I said at the beginning this bill will not achieve its aim. It will not deliver on its stated aim of reducing youth unemployment. The regulatory impact statement which was very interesting said that “the precise nature and extent of the policy’s expected benefits are uncertain.” All the Ministry of Business Innovation and Employment could do was guess. And its best guess is that this bill will create only 400 to 1100 net new jobs. Even if true and that is taking into account the displacement that will occur for older workers this is only a drop in the bucket compared with the 250000 sixteen to 19-year-olds in New Zealand. Even those figures have to be treated with extreme caution. The Ministry of Business Innovation and Employment said it cannot project the impact of the policy. It cannot tell us that this policy will work. It cannot do it with any accuracy and it was quite explicit that it did not have the information it needed to make a credible estimate. 
Despite the Minister claiming that youth rates are voluntary and that workers do not have to accept sub-minimum wages under this bill if they do not accept a job—these are 18 and 19-year-olds who have been on a benefit and let us remember we are not talking just about the unemployment benefit here we are talking about sickness and invalids benefits—and Work and Income judges it to have been a suitable job they have to be stood down. They can be stood down from any support from Work and Income for 13 weeks. Poor young worker gets out of bed having been sick or having been injured manages to apply for a job and then— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! I am sorry to interrupt the member. [ 
Interruption 
] No I am on my feet. The interjections across the benches are unacceptable. I want to hear what the member is saying. If there are interjections they should be on what the speaker is saying and not this other dialogue that is going on. 
DARIEN FENTON 
: As I was saying the poor young worker who drags himself out of bed having been on a sickness benefit or an invalids benefit has to accept a job at sub-minimum wages or he will be stood down with nothing from Work and Income for 13 weeks. What is fair about that? 
Cutting young people’s pay is just the tip of the iceberg of this Government because of course we know that changes to the labour laws including meal breaks and rest breaks are on their way. 
Hon Simon Bridges 
: You bet they are. You bet they are. 
DARIEN FENTON 
: Yes you bet they are. 
Hon Simon Bridges 
: Then why’d you put out that press release? 
DARIEN FENTON 
: Because I was hoping the Minister of Labour would show some sense unlike his predecessor because that is a stupid bill. This is all going to hit Kiwi workers across the board but this bill in particular is going to hit young workers. It is going to make it much more difficult for them to survive. It is not going to make it easier for them to get work. The Minister’s own department could not verify that the aim of this bill of cutting youth unemployment would be delivered. So it is a bill that just goes back to the tradition of the National Party—back to the 1990s. Let us cut people’s pay. It does not work. It did not work then and it will not work now. 
Hon JOHN BANKS (Leader—ACT) 
: 
 I want to address what the Labour member Darien Fenton has raised. She has raised two very important issues. She raises the issue of so-called sub-minimum wages and she talks about hitting young workers. The ACT Party supports this Minimum Wage (Starting-out Wage) Amendment Bill and supports this young Minister of Labour. It is an opportunity for young people to get their foot on the first rung of employment opportunity. We support the intention but the ACT Party is on record as saying we need to go further. Since Labour and the Greens abolished youth minimum wages in 2008 youth unemployment has reached crisis levels. This is the key point I want to put to the Labour Party Opposition today. 
The member talks about sub-minimum wages. I want to talk about the $4.50 an hour paid every fortnight electronically at midnight from Work and Income to the 40000 young people between the ages of 15 and 19 who get the dole—$4.50 an hour on the dole. This is an opportunity to pay young people a fair rate of pay for the dignity of a working opportunity. Statistics New Zealand put youth employment in December at 30.9 percent. That is the highest rate we have had in three decades. Over 40000 young people who want to work cannot find a job and I rise in this Parliament today to represent them. It is worse amongst young Maori it is worse amongst young Pacific and it is worse for young Asian. Forty percent of Maori aged 15 to 19 are on the dole 47 percent of Pacific youth are unemployed and on the dole and 55 percent of Asian 15 to 19-year-olds are consigned to the dole—55 percent. So we are talking about 48 percent of Pacific Maori and Asian youth on the dole. Of course it also has encompassed in that young European and others. 
But we cannot sit back as a Parliament as a country and pay so many people 30 percent of our youth aged 15 to 19 $4.50 an hour to do nothing—$4.50 an hour. I say to the Labour Party list member opposite who resumed her seat Darien Fenton what about talking about and thinking about the 40000 young people aged 15 to 19 who desperately need the dignity of work and a job opportunity to get on with their lives? Too many of these young people are starting lives with poor education no jobs no hope and few opportunities. 
Le’aufa’amulia 
 Asenati Lole-Taylor 
: Whose fault they’re getting poor education? 
Hon JOHN BANKS 
: I say to the yapping member opposite that I have been in business for 50 years this year. I have employed tens of thousands of young people in the restaurant chain that is 50 years old this year Tony’s at 27 Wellesley Street. 
 In December 2007 before Labour and the Greens abolished youth minimum wages Maori youth unemployment was 22 percent. Maori youth unemployment before Labour and the Greens abolished youth rates of pay was 22 percent. Today it is double that figure and the member who resumed her seat has the temerity to criticise the Minister of Labour for trying to do something about getting the dignity of work for so many people who feel helpless and hopeless without a job. Deliberately legislating to stop young people from making a successful transition from school to jobs is a violation of their right to make their own decisions. Deliberately doing that by legislation is a violation of young people’s right to make decisions for themselves and have a working opportunity. The Labour Party’s short-sighted policy has had a devastating effect on our young people’s morale and sense of self-worth. Morale and self-worth—any member in this House who has had a young boy or girl between 15 and 19 sitting at home desperately wanting a job and without the dignity of work knows exactly what I am talking about. 
Do not be hypocritical I say to members—please do not be—by suggesting that this is not going to work because we pay $4.50 an hour to 40000 young New Zealanders between 15 and 19 every second Wednesday night from Work and Income by way of the dole. We believe that 80 percent is still too high as a minimum rate. In the UK the rate for 16-year-olds is 60 percent. In Australia the rate for 16-year-olds is 48 percent—much lower than what is proposed today. I would pay those 40000 young people looking for work $25 $30 or $40 an hour if we thought we could afford it. The fact of the matter is the country cannot business is struggling working opportunities are not there so what we are trying to get here is a measure of sensibility. 
Andrew Little 
: Make the young people pay for it. 
Hon JOHN BANKS 
: That member across there has witnessed a doubling since the Labour Party and Greens abolished minimum rates of pay. There are twice as many young Maori on the dole—twice as many young Maori on the dole. 
David Bennett 
: It’s a shame. 
Hon JOHN BANKS 
: It is a shame. These countries that I am talking about obviously understand that it is important for youth to get their feet on the employment ladder. We want to see every young man and woman with their feet on the employment ladder and with the dignity of training of work of opportunity of earning a living and of making a contribution. Members on the other side of the House have as statistics have proven wiped out so much of our youth. Not only is the proposed rate too high but the conditions of this bill are too strict. The 6-month limit is not long enough to gain work skills and experience. It is not long enough. As someone who has been in business employing people for 50 years I say it should be 12 months or longer. Forcing people to be on a benefit for 6 months before they are eligible for a starting-out wage again is far too long. Why would this Parliament force young New Zealanders to stay on a benefit for 6 months before they are eligible for the starting-out wage to get some dignity in their lives? Why would it do that? 
ACT strongly supports a return to the situation pre-2008 before we doubled youth unemployment for Maori before we doubled youth unemployment for Pasifika and before we doubled youth unemployment for Asian people. These people opposite these members of Parliament opposite have never employed anyone have never had to pay a wage to anyone and have probably never had the indignity of joblessness. I say to the yapping members opposite that they should think about the indignity of joblessness—think about the indignity of joblessness. For once in their lives they should think about the 40000 fifteen to 19-year-olds in this country who are crying out for an opportunity to work. They look to Labour and the Greens and what Labour and the Greens have left us is a legacy of doubling unemployment for Maori youth doubling unemployment for Pacific youth and sending unemployment for Asian 15 to 19-year-olds to 55 percent the highest in any OECD country. And now they do not want to give employers the opportunity to give them some training and some work. We believe it is important that youth have the opportunity to work to learn to gain skills and to gain habits and experience that will set them up for their future careers and for a more prosperous future. Why would these people opposite vote against that? 
ANDREW LITTLE (Labour) 
: 
 I rise to speak on the Minimum Wage (Starting-out Wage) Amendment Bill. That last speaker John Banks was absolutely correct in one thing he said—that this bill is an opportunity for employers. That is all it is about. I rise on a day when some in this country are celebrating the arrival of a new pope. Cardinal Jorge from Buenos Aires—Pope Francis I—has committed himself to alleviating the burdens on the poor. So those of that faith now have a new champion on their side and the Catholics in this House will know that they have as their religious leader someone who is committed to alleviating the burdens on the poor. This legislation is no way to go about it. 
The Minister of Labour Simon Bridges is new in that role. He is learning a lot about the labour market. He has been to the home of the high-skilled high-wage economy in this country and that is Taranaki. He had a look around at the oil and gas sector last week and he came back brimming with ideas and realising that what is happening in Taranaki is unique to Taranaki. But here is the thing about the way the labour market operates. Passing laws does not create jobs. Passing laws does not make work. What does make work is economic activity. 
David Bennett 
: Oh! This can’t be the Labour Party. 
ANDREW LITTLE 
: It is pretty simple economics and even David Bennett from the Waikato understands it. In order for jobs to be generated there needs to be economic activity. People do not sit around saying: “Gee I’m not an employer today but if I could get away with paying nothing or next to nothing I will employ a whole bunch of people.” What are they going to employ them for? People take on labour people engage workers when there is work to be done. That is the first part of the equation Minister. There has to be work to be done. 
 The second part of the equation is that there has to be value that can be generated as a result of it. We can go back to the old surplus value theory of labour which is that providing you take somebody on and the return on the value of that work can pay for the worker and provide the employer with something then you pretty much have what it takes to create work. Creating an environment where you just reduce the price of labour is not about creating work. It is simply about opening exploitation. When the Hon John Banks said that this is an opportunity for employers there is only one meaning you can attach to those words and that is that this is an opportunity for employers to further drive down the cost of labour jobs and work that they already engage. It is not going to create a single extra job in this country. It will not help a single extra person. All it will do is mean that those people who are employed under it will get paid less than they would otherwise have been paid and who knows about the quality and the training under it? 
The law is very clear and the conditions for engagement under this legislation are simply any training. Well I met an employer recently and so did my colleague Darien Fenton who lamented the fact that the minimum wage that is in place at the moment meant that it was getting harder and harder for his friend who runs a business that requires a lot of envelope stuffing to engage people. He wanted an even lower wage so that young people could be in his words trained up to stuff envelopes and they would have work. Well actually I am not quite sure whether that is what this bill is about and what its objective is. That is not work that we want. The challenge for New Zealand and the challenge for this Government and any Government is to encourage and incentivise that sort of economic activity that is going to encourage or create those jobs that are high value that are higher wage not minimum wage jobs. 
The reality is that there are parts of this country now where we have a two-speed economy operating where we do have jobs that are well paid well remunerated. I am not talking about the chief executives of Government departments when they get well paid and they get paid even more when they leave their job. I am talking about people who leave work in the morning or might leave at the end of their shift come home from doing an honest day’s work and get an honest day’s pay to look after their family have a few hobbies and stuff. There are some people who live that sort of lifestyle and do very well. There are a growing number who have that sort of life—a 40-hour-a-week job or longer—and can still barely make ends meet because they are on the minimum wage. There is a growing number of sectors where that is happening. It is no longer just the service sector either. It is in important industries of ours—for example forestry where a growing number of the workforce are on the minimum wage. This bill will do nothing to help that. What it will do is give a signal to those employers that if they can dress up an induction to the workplace as training they can get away with 6 months of paying an even lower wage than they have to pay as the minimum wage now. That is all it will do. It will cheapen labour make it easier for the ruthless employers and the employers that we actually do not need more of and make it even worse for those workers who are struggling to get work. 
This is not going to help young people. The old canard is trotted out every now and again: “Oh but what about the 90-day trial?”. The most dubious piece of labour market research we have seen in a generation from the NZIER calling itself the New Zealand Institute of Economic Research came out and said: “Oh it created 13000 jobs.” The research was done within months of the legislation coming into effect and every other worthwhile and self-respecting—actually decent—economist who ever looked at that piece of research said that it was a load of bunkum. It failed to take into account the fact that there were other measures in place to help young people. But it did not even take into account the displacement effect—the fact that employers were getting rid of some workers and employing them under the 90-day law because they could get away with it because it was low-skilled work and they could manage a high-rotation workforce and they did it. There was no evidence that making things worse for younger people whether it is in terms of their security of employment à la the 90-day legislation or lowering the minimum wage is going to help young people into work. The labour market does not operate that way. Economics 101 does not operate that way. You do not have to be very smart to realise that simply lowering the price of labour does not create a single extra job. What creates jobs is economic activity and that is what this Government has singly failed to do to achieve and to do anything about. 
So despite all the arguments that were trotted out by employers by the less than half a dozen employer representatives who fronted up to the select committee to say that the current minimum wage is a barrier to work that this will not create work they knew when pushed that they could not sustain that argument. They did not believe in it—they did not believe it. I think this Minister when he is pushed and when he looks into his heart and when he looks to Pope Francis I will know that this legislation will not achieve the objectives that he claims of it. That is why we will be opposing this legislation. There are fortunately other members in this House who know that cutting the minimum wage reducing it even further does not help. 
Darien Fenton 
: David Bennett. 
ANDREW LITTLE 
: David Bennett for example said that when there was an attempt previously to reduce the minimum wage through legislation we are by doing so denying young people their success by holding them at a lower rate than their ability shows as individuals. David Bennett was right. That was David Bennett National MP for a Hamilton seat either east or west—but anyway one of the Hamilton seats. He knew then; he was right then. It will be interesting to see whether he takes a call today to talk on this bill which he knows is wrong. 
We are opposed to this legislation. It will do nothing for New Zealand. It will do even less for young people. What we need is a real plan that is going to create jobs and lift incomes in New Zealand. 
DENISE ROCHE (Green) 
: 
Tena koe Mr Assistant Speaker Tisch. Tena koutou katoa. The Green Party opposes this bill the Minimum Wage (Starting-out Wage) Amendment Bill in its entirety. It is ironic—it is totally ironic—that the second reading of this bill should come to this House 20 years and 1 day after the Rt Hon Don McKinnon on behalf of the New Zealand Government signed the United Nations Convention on the Rights of the Child. Yesterday I would remind the House this House unanimously supported this motion: “That this House notes that today is the 20th anniversary of New Zealand ratifying the United Nations Convention on the Rights of the Child”—UNCROC—“that it is the most well-supported human rights treaty in history that it committed this country to consider the best interests of the child in all activities and make children’s rights known as a priority and that the House recognises children as full citizens of our nation deserving of our most ardent attention to make the world fit for them to inherit.” In 1993 we committed to bringing our laws into line with this convention. That convention applies to all young people who are under the age of 18. So why are we today attempting to pass a law that allows for some of our young people—those aged between 16 and 20 who may be on a benefit—to be discriminated against in their pay rates? 
The explanatory note in this bill right at the beginning says: “Minimum starting-out rates of wages are designed to support young people entering the workforce including those who have been on a benefit and young people who are undertaking industry training for their work. Starting-out wages provide an incentive for employers to take on young workers at a reduced rate of pay while foundational work skills experience on the job or training is gained.” We do not believe that this bill will support young workers. What it is is a new take on the carrot-and-stick approach. The employer gets the carrot and the young worker gets the stick. Paying low wages is an incentive for employers to keep wages low. The only incentive that young workers new to the workforce will get from this law will be the incentive to join the 50000 or so New Zealanders every year who leave this country for Australia for better-paid jobs. Certainly in this bill I see no incentive for a young worker to get a job especially when they are going to be paid poverty wages. But then this bill is more in line with the Government’s approach to punish young people especially young people who may be receiving State support. That includes the young mothers and other young beneficiaries who now have less decision making around their own finances and it includes university students who are being increasingly shut out of allowances that would enable them to finish their studies. 
If we are looking at incentives in this bill then we need to look at what this bill offers employers. I agree with the Council of Trade Unions which said in its submission that this bill will incentivise poor employment practice: “There is a clear encouragement for some employers to sack young staff after 6 months—and they can do so at 90 days without any justification—in order to continue to get labour at a 20 percent lower cost.” The Council of Trade Unions was one of 529 submitters on this bill. Of them only nine submitters were in support. Surely that tells the Government something. Of those nine submitters in support seven of them came from employer groups and industry organisations—that is parties with a vested interest in keeping wages low. Among the 520 submitters who opposed this bill were parents unions community groups charitable organisations NGOs the Human Rights Commission and hundreds and hundreds of young people many of whom submitted in person. And I might add some of them were not treated with the respect that they deserved by the chair of the Transport and Industrial Relations Committee. The chair of the— 
Hon Members 
: Oh! 
DENISE ROCHE 
: The select committee heard from economists. We had reports from economists. There was conflicting evidence from economists and I was reminded while I was looking at the evidence and the different opinions from economists that economics is not a science. There were even two submissions from employer groups who did not think that this bill would help with the unemployment rate either. We could be doing more. 
As for the young people we heard from they were really worried about reducing the wages from one category of worker and displacing the work for others for those in the next age category the 20 to 24-year-olds. Those ones are at least protected at the moment by the minimum wage although it is very paltry I agree with Darien Fenton. Really we did not hear any concrete evidence or promises for that matter from employer groups that this bill would increase jobs. We did not get that assurance. The way to get young people off benefits and into work is by creating jobs. Simply lowering the price of labour does not do it. Creating a low-wage economy does not alleviate poverty and it brings absolutely no new ideas into the mix. 
It has been proven that the way to reduce the number of people on the benefit—and that is whom this bill is targeting—is to get them into jobs and jobs where they have a decent job and can support themselves. In 1999 there were 160000 unemployed people. By 2007 that figure was down to 17000. Why? Because there were jobs. Forcing wages down under the guise of doing young people a favour by getting them into work where frankly they will be exploited does not help the economy as a whole. Doing something for the manufacturing industry in this country where 40000 jobs have been lost in 4 years would help. The Government could assist by diverting some of its resources away from offshore interests that demand law changes in exchange for a few thousand short-term and low-paid jobs and into local industry that is struggling with the high exchange rate. The Government could also help by ensuring that local companies get Government contracts because that creates local jobs. 
We reject the notion that this bill is needed because young people are a risk to businesses. That is discriminatory. All bosses take a punt on any new worker. We do not need this bill. We have sufficient legislation in place to mitigate that risk. That is what the 90-day rule is all about. It enables employers to deal with substandard workers and it reduces their liabilities. For employers who are genuinely—genuinely—offering training to young workers there is already the training rate which gives an 80 percent pay rate to young workers in training. We could be doing more for our young people to get them into work and training. The Government could be following the lead of the Mayor of Otorohanga Dale Williams who has with his entire town created a wraparound service that mentors and supports young people into work. This model is also working in Buller and it could work everywhere else too. I note that the speaker from ACT the Hon John Banks was the Mayor of Auckland City and was one of only two mayors in New Zealand during his term in office who declined to join the Mayors Taskforce for Jobs. That was a shame. 
This bill sends a really really negative— 
Colin King 
: Positive signal. 
DENISE ROCHE 
: —really negative—signal to young people that they are not valued that the Government will not invest in them and that the Government is willing for them to be exploited and discriminated against. 
DAVID BENNETT (National—Hamilton East) 
: 
 I just want to congratulate members of the Transport and Industrial Relations Committee on the way this bill the Minimum Wage (Starting-out Wage) Amendment Bill went through the select committee process. I think it was very well done. I would like to pay special tribute to the fine young Minister the Minister of Labour who led this great debate today. He is doing an excellent job in his ministerial roles— 
Simon O’Connor 
: Inspirational. 
DAVID BENNETT 
: —and is inspirational to young people as many people through this country know. This is another fine piece of work from that young Minister who is doing so well. 
I want to take just a short call on this bill. It was an interesting speech that we just heard from Denise Roche of the Green Party. That was the economic rationale from the Green Party. It does not have any economic rationale; it just tells you a lot of weasel words. But we did get some economic rationale from the guru Russel Norman today. Russel Norman has given breaking news about the economic policy of the Green Party. It is no longer printing money. 
Chris Auchinvole 
: What? 
DAVID BENNETT 
: At the Finance and Expenditure Committee—no no no it is not going to print money any more; it is going to do it electronically. The Green Party is going to make money electronically now instead of printing money. You would think it is doing that for green purposes to save trees. It is not. It is doing it so that it does not have to take the hassle of being asked how you print money and change the economy how you print money and reduce the exchange rate and how printing money electronically now actually means that you are going to provide jobs for young people. The economic rationale of the Green Party is rubbish. Everybody knows that. It is rubbish and it will never work. 
To prove that we had a speech from the Labour Party from Andrew Little. Andrew Little gave a very good speech. He had one line in his speech that I think we should all take to heart: “Passing laws does not make jobs. It needs economic activity.” That is what Andrew Little said in this House 10 minutes ago. The leader of the Labour Party union movement came to this House and said: “Passing laws does not make jobs.” What does that do for the whole Labour Party whose whole life is about trying to get in this place and pass more laws? That is Labour’s answer to making jobs. It does not believe in people it does not believe in the economy and it certainly does not believe in our young people. 
The Opposition is portraying this bill as anti young people. That is not the case. This is giving young people a chance. Young people need that chance. They need to get in the workforce and this gives them that opportunity. In a perfect world we would want our young people to be getting an education. The days are gone when you could leave school just walk into a job and think that was going to be for life. The modern world will require those young people to get an education. Everybody in this House should be saying that and should be believing in that because that is those young people’s future. In some cases some people will leave school and they will be looking to go into the workforce when they probably should be going to get higher education. The main thing we can do is give those young people the confidence and the ability to get a job. This bill helps them to do that. It gives them the chance to get their foot in the door to prove themselves and to move their way up the economic scale. That is good for New Zealand’s young people it is good for this Parliament and it is good for the future of this country. Thank you. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to speak to the Minimum Wage (Starting-out Wage) Amendment Bill. New Zealand First opposes this bill. We oppose it on the grounds that it is an attack against young vulnerable workers who are just starting out on their working careers. Young workers who want to be independent and self-sufficient often move away from home and they have very high ideals and hopes. But with this legislation keeping them right down there on the poverty line they just cannot afford to have this hope or any future plans. 
We at New Zealand First ask the National members where the demand is for this change. To date we have heard absolutely nothing from the other side that will help change our minds or ensure that we know why there is going to be this change. Who out there apart from National and ACT really wants to rob young workers of an extra 20 percent of their wages? The fact of the matter is that there is no real demand for this change. Youth rates were done away with in the 1990s and as we have heard employers are not entirely ecstatic over this change either. 
With this bill the Government is taking another step towards a low-wage economy—something that we want to move away from. Hard-working Kiwis have faced numerous attacks from this Government. It has sold out workers to foreign corporations it sells off the assets it changes the labour laws to suit its ideology and now it has mounted an attack on young working New Zealanders. It taxes all fringe benefits—looking for money everywhere—and now we have got young people. Is this truly a part of the Government’s plan to catch up with Australia? This bill is creating a further disincentive for young workers. Is it the way to get ahead? No. Is it the way to bridge the gap between our two countries and entice our young people to stay here and work? Definitely not. 
 Jobs are generated by economic activity and the reality is that that is not happening here in New Zealand. The National Party and ACT like to talk about bludgers and laziness and people doing nothing. Mr Banks was talking about paying $4.50 an hour to people who are on the dole for doing nothing but the bottom line is that he has created this situation of no employment and it needs to be sorted out and pretty promptly too. 
They like to talk about welfare dependence and people relying on the State. Our young workers— 
Hon Simon Bridges 
: Brendan Horan is not that bad. 
BARBARA STEWART 
: We are not talking about Brendan Horan here. Young workers are not bludgers and I would say that the Minister the Hon Simon Bridges would say that they are not bludgers. They are not out milking the system; they are industrious young Kiwis and they are trying to get ahead. They are young people trying to get a foothold in the working world which is not easy in today’s world of fewer and fewer permanent career jobs. Learning life’s lessons and learning what money is all about and what it buys is what every young person wants to do. 
What is this piece of legislation? A slap in the face for young workers. It is an affront to their dignity. Cheap labour is not the silver bullet that is desperately needed. It will not help young people to be independent and keep a job and get a job. We know in New Zealand First that this is going to do absolutely little to nothing to encourage economic growth which is what we want as well as the creation of more jobs. We are not alone with this particular viewpoint. The Salvation Army too rejected suggestions that this bill will support more young people into employment. So if it does not believe it we definitely do not either. It also rejects the viewpoint that this bill will provide more incentives for employers to take on younger workers. On this occasion we agree with it. 
It is our belief in New Zealand First and on this side of the House I would say that irrespective of age anyone who turns up and puts in the hard work deserves a decent wage. It is the Kiwi way. Here in New Zealand we were a country that was founded on egalitarian principles. From the very beginning New Zealanders recognised talent. They recognised good ideas and hard work irrespective of where it came from. In New Zealand First we believe in giving credit too where credit is due. We believe in rewarding the hard-working the industrious and the innovative and we believe totally in encouraging New Zealanders into their first jobs. Where are the jobs? This bill is not creating them. They are getting harder and harder to find. 
Throughout New Zealand the National Government has been out trying to woo mums and dads. It has been telling them that it understands how to sort out the Government’s books because after all it comes from a business background—it understands business. But although it might understand business this bill shows it does not understand people. It shows that National basically does not care about people’s kids. It shows them that it is nasty and mean. National is not providing the brighter future that everybody wanted to believe was coming. We all started off very optimistic looking for this brighter future but it is not here. 
Le’aufa’amulia 
 Asenati Lole-Taylor 
: Where is it? 
BARBARA STEWART 
: Gone—gone. 
The reality is that mums and dads do not want to be paying their kids——the 16 17 and 18-year-olds—extra money to top up their wages. They cannot afford to pay the extra money. People are poor out there. Groceries are going up power is going up petrol is on the rise all the time and they want them to be independent and able to support themselves and I know that Mr Macindoe agrees with me there totally. They want their kids to be getting after-school jobs. They want them to be having jobs in the weekend and in the holidays. It is what has always happened. We have always had weekend jobs and holiday jobs. They expect them to be learning how to pay their own way—slowly but surely. In this way this bill is merely an attack on young workers. It is also an attack on the entire family unit. The bill does nothing to instil young Kiwis with confidence for the future. What it does is denigrate them as having the status of second-class workers. What it does is play off 20 to 24-year-olds against 16 to 19-year-olds. What it does is get parents—all those infamous “mum and dad” Kiwis—questioning the brighter future that was promised by the National Government. 
New Zealand First is firmly opposed to this piece of legislation. It will not support young people entering the workforce in this way. It is an absolute affront to young industrious New Zealanders. It is discriminatory and unfair. It runs contrary to the Kiwi notion of giving everyone a fair go and a fair day’s pay for a fair day’s work. We need a real plan to get the economy going again and this is not that plan. On these grounds we are proud to oppose this piece of legislation. 
CHRIS AUCHINVOLE (National) 
: 
 I was going to say what a pleasure it is to follow Barbara Stewart as always but I am finding that a little bit difficult because—I am sure she did not mean her last remark when she said that New Zealand First will not support young people entering the workforce. Did you hear her say that? 
Colin King 
: I did. I did. 
CHRIS AUCHINVOLE 
: Mr King heard you say that. I am sure she did not mean that but in effect that is what her speech said. She said throughout the speech: “We would prefer people to be staying on welfare on the dole sitting and waiting for a job.” Young people love to work. That is what they want. But what did we hear? New Zealand First said: “No we will not support this new opportunity that is being put forward for a brighter future by National. We will not make it easier for employers who are doing their level best to employ people just to make it that skerrick easier for them. No we will not support this.” And I am astonished—I am astonished that the Greens said it too. I would have thought they would be very pleased to be involved in this and give us a bit of backing. “No it is preferable that young people stay out of work.”—that was the message we got. That is the message we got. 
Barbara Stewart 
: We want jobs. 
CHRIS AUCHINVOLE 
: Would you like some of my speaking time to correct your statement? I will sit down and let you— 
Barbara Stewart 
: No we just want jobs. 
CHRIS AUCHINVOLE 
: You do not want to do that. All right. Perhaps a future speaker from New Zealand First will withdraw the remark and correct it. 
I am rising to speak on the Minimum Wage (Starting-out Wage) Amendment Bill in the name of the Minister of Labour the Hon Simon Bridges who is providing such inspirational leadership on this issue. It is great to see. This bill seeks to deal with what is an assuredly important issue. It is an issue so important that Su’a William Sio decided to bring it up during his speech on the Plumbers Gasfitters and Drainlayers Amendment Bill—a speech that should have been on ensuring the best practices of an industry that is vital to the safety of our homes. No Su’a William Sio decided to bring up the issue of employment and getting people into jobs. I thank him for the opportunity because you see that is exactly what this bill is about. He asked what we are doing about jobs. Now we are able to respond to him. 
The bill is about ensuring that starting-out workers can get their foot in the employment door. A low wage is surely better than no wage. It is indeed better than young people having to languish on welfare. I have not heard the phrase “dole-bludger” from this side of the House. Have you heard that phrase? 
Colin King 
: No. 
CHRIS AUCHINVOLE 
: Have you heard it from the other side of the House? 
Nicky Wagner 
: Yes. 
CHRIS AUCHINVOLE 
: Yes. That is what we heard this afternoon. We heard it from Barbara Stewart. So not only are young people dole-bludgers but they are not allowed to work because New Zealand First is not prepared to see people on starting-out wages—the incentive for employers to take a chance on a younger worker and it incentivises these young people to seek out work or training or both. Dave Bennett made the very good point that you cannot be dependent just on muscle for job security now—you really cannot—you do need training. However we do have this system coming forward. 
I would like to talk about it at greater length but I think we need to give the other side of the House the opportunity to correct its mistaken approach to this bill. Let us see whether it does not just swing around in support of it. I commend the bill to the House. Thank you. 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 We took the mickey out of the Hon Maurice Williamson earlier this afternoon for bringing the Plumbers Gasfitters and Drainlayers Amendment Bill to the House. A number of us commented then that it was a curious use of the House’s time to be dealing with the minutiae of plumbers gasfitters and drainlayers when there are so many pressing economic social and environmental problems facing the country. But to be honest compared with that bill this bill the Minimum Wage (Starting-out Wage) Amendment Bill is the work of an intellectual midget. 
Hon David Cunliffe 
: Pygmy. 
PHIL TWYFORD 
: Pygmy—midget—pygmy. Chris Auchinvole would have us believe that the choice facing this country is between no work and work on reduced wages. Is that really what John Key’s brighter future has come to? This is the choice we face as a country: our young people either should be paid to stay at home all day or they should be prepared to take a cut in wages and be paid less than the next person for doing exactly the same work. 
That is the kind of vision that Chris Auchinvole has for this country and that is where John Key’s brighter future has got to. It is depressing. It is depressing to be standing in this House on a Thursday afternoon debating a bill brought to this House by a political party that is so bankrupt of ideas. National is so utterly lacking in any kind of creative thinking about this country’s future how we build prosperity how we increase productivity and how we unleash the potential of our young people that this is the best—this is the best—it can do. 
If this is Simon Bridges’ attempt at a career-advancing move then I hope he has got some other ideas in his back pocket because this bill is based on the flimsiest of logic the flimsiest of policy. The idea that if you cut the wages down from $13.75 to $11 for 16 17 18 and 19-year-olds who have been on the dole for 6 months somehow you will create new jobs is what this bill is based on. It is pretty simple for the folks at home who are listening to this. If they have just tuned in that is really all they need to know. The National Party is cutting the take-home wages down to $11 an hour for young people between the ages of 16 and 19 who have been on the unemployment benefit for 6 months. That is National’s solution to the unemployment crisis that is facing this country. What a depressing depressing thing—to create a financial incentive for employers to hire one group of workers over another. It will not create a single new job. It will simply displace employment from one group to another. This is the extent of the National Party’s vision for tackling the jobs crisis. 
The other thing that I find really dispiriting about this bill is that people in this country need hope. They need hope that there is a place for them and that there is a future for them and their families in this country. The fact that so many people are heading to the airport and heading off to Australia and further afield looking for opportunity and looking for hope is surely a wake-up call. One hundred and eighty thousand people have left this country under the National Party’s policies of the last 4 years. It cannot find a stadium big enough to fit in the equivalent number of people to signify how many people have gone to Australia. 
Interestingly we do not hear much from John Key these days about how many New Zealanders are heading to Australia but 5 years ago that was all he wanted to talk about. Now we see a bill that comes to this House to cut the wages of our young people. What will be the result? Surely they will save up their $11 an hour so that they can buy an airfare to get to Australia. 
It should not surprise us that the National Party’s first response to any major problem is to cut wages. It is what the National Party has always done. If you go back through the history of this country to the predecessors of the National Party you will see that their idea for a Depression-busting policy was to create work camps in the countryside and they shipped unemployed men and women off to those camps to work at starvation wages. That was their idea of a policy to deal with the Depression. 
Hon David Cunliffe 
: Now they’re paying fringe benefit tax on accommodation. 
PHIL TWYFORD 
: Yes that is right. As Mr Cunliffe says now workers are paying fringe benefit tax on the accommodation—exactly. 
It was the National Party that was responsible for the policies of the 1990s to smash the trade union movement of this country to get rid of the minimum wage and to drive down wages. And my God it succeeded and we are dealing today with the legacy of those policies that made a low-wage economy. Yet when the election campaign came around in 2008 the National Party of the time under John Key campaigned on the idea of closing the wage and salary gap with Australia. Yet time after time after time National members do whatever they possibly can to drive down wages. We have seen the pathetic increases to the minimum wage that this Government has presided over. We have seen the 90-day bill which surely has one objective in mind and that is to create insecurity for New Zealand workers to make them fear for their jobs and in so doing to drive down the cost of labour. 
This bill is another example in that great National Party tradition to lower the cost of wages because National has only one tool in the tool box: “Whatever the problem—whatever the problem—let’s cut the cost of labour.” That is all National members know how to do. What an irony that they campaigned so hard about closing the wage gap with Australia! We have been hearing day after day in the House that the wage and salary gap under National—the gap between New Zealand and Australia—has actually increased. 
What we need is bold leadership in this country to tackle the jobs crisis and I am going to tell you some of the policies that National would be contemplating if it had any kind of curiosity about the policies that would solve the jobs crisis. For example it would be restoring the research and development tax credits so that New Zealand companies had the incentive to lift their game and invest in innovation and productivity through research and development. The members on that side of the House would be considering reform to monetary policy that would stop the endless round of squeezing the lifeblood out of our exporters every time the economy showed some kind of life. 
Instead of the Reserve Bank Governor having this single focus on controlling inflation the National MPs would be considering a monetary policy that took into account economic growth jobs and exports. But no they will not consider that. They would be considering skills and apprenticeships that would invest in our young people—not cutting their wages and taking away their employment rights but actually investing in skills and apprenticeships. There is no reason in today’s world that young people should only either be paid to stay at home or go to work and have their wages cut. 
We have seen an increase in the number of young people who are not in education employment or training: 30000 under-20-year-olds are not in education employment or training and that is 4000 more than when this Government took office. If this Government was interested in a jobs policy it would be far more wholehearted about tackling the procurement policy that sees jobs shipped offshore constantly and the gutting of New Zealand’s high-value manufacturing industry. It would consider a capital gains tax that would tilt the playing field back in favour of the productive economy away from wasteful investment in rental real estate and into businesses that will produce jobs and livelihoods for New Zealanders. But no National members are not interested. 
National members are not interested in industry policy that would look at how the State can actively partner with New Zealand firms and exporters to grow jobs and grow productivity in this country. Their idea of an industry policy is getting problem gamblers to fund Auckland’s new convention centre. That is their idea. Selling out employment law to Hollywood corporations and taking away the work rights of New Zealand workers at the behest of Hollywood is this Government’s idea of a jobs policy. It is not good enough and New Zealanders demand something better. 
SIMON O’CONNOR (National—Tamaki) 
: 
 What an array of contradictions we have just heard there from Phil Twyford. We know that under this Government take-home wages are increasing. Regardless of the fact that it is by 25c the minimum wage is going up. We protected jobs around  
The Hobbit  
and so forth—you know we reacted there—but that is somehow a problem. One of my colleagues pointed out to me a bit earlier that this hands-on approach of the Labour Party is really around your throat and in your wallet. What is the solution? What is the solution for more jobs? A tax—a tax. Let us have more taxes. Boy what economic policy there! 
Dr Cam Calder 
: Around your throat and in your wallet. 
SIMON O’CONNOR 
: Absolutely. It is a slap in the face and a kick in the guts to New Zealand. That is the Labour approach: hands-on Government. 
This bill the Minimum Wage (Starting-out Wage) Amendment Bill is a good opportunity and I want to acknowledge the Minister of Labour who is here in the House supporting this bill. This bill is really about opportunities and incentives to get young people into work. What we have heard from the other side can be best defined as utopianism a world where everyone is perfect everyone can be paid the same amount of money for whatever they do and everything is perfect. Well some of us live in the real world. Some of us do not believe in utopianism. We believe we have to do something. 
Someone talked a little bit earlier about oh my Lord how dare we pay them a little bit less. The key comes down— 
Hon David Cunliffe 
: I bet you love Charles Dickens. 
SIMON O’CONNOR 
: Oh Mr Micawber’s quote does come well to mind again if Labour wants to start talking about Dickens. Go and look up Mr Micawber. The key here is that we want the dignity of work and a lot of people submitted that to us—the dignity of work. Andrew Little tried to quote the pope. Well maybe he should go and read  
Rerum 
Novarum 
 some time. At the end of the day the dignity of work comes first and foremost. This party the National Party is behind the dignity of work. We want our young people to get into jobs and if part of that facilitation in the real world is giving them a slightly more minimum wage to start on then we are behind that. I support the passage of this bill. 
Sue Moroney 
: Mr Speaker— 
Mr DEPUTY SPEAKER 
: Is this a split call? 
Sue Moroney 
: It is indeed a split call. 
Mr DEPUTY SPEAKER 
: 5 minutes. 
SUE MORONEY (Labour) 
: 
 I would like to say that I normally start off my speeches by saying it is a pleasure to rise and speak but quite frankly I am getting tired of rising and speaking to these bills that have absolutely no vision for a better and brighter future for this country. 
When Simon Bridges was promoted recently in Cabinet I think the media thought: “Look here’s a bright new guy he might have some new ideas. He’s fresh he’s got a bit of energy.” Well sadly here he is bringing back the same old tired rubbish to this House that National has been trotting out for decade after decade after decade. There is no shiny bushy energetic new thinking from that side just the tired old wage-cutting regime that National members have rolled out for decades now. So they have not learnt a thing. Once they used to be ambitious for New Zealand. Do people remember that? We have not heard it for a while but when they were in Opposition John Key claimed that he was ambitious for New Zealand. I notice that as soon as he got into Government he stopped saying that. Here is the reason why. They absolutely lack ambition for New Zealanders and this bill the Minimum Wage (Starting-out Wage) Amendment Bill proves exactly that point. It is not about creating jobs; it is all about lowering wages. 
I listened to a very good speech from my colleague Andrew Little earlier where he outlined exactly why of course it does not create jobs. Work creates jobs not lowering wages. Having work to do creates jobs. That is what employers employ people for. They are not benevolent societies and charitable organisations that employ people because they just want to help them out. They do it because there is work there to be done. The real tragedy of this piece of legislation is that in fact this will ensure that there is less work—fewer jobs in our economy. 
When that Government lowers wages it will reduce the amount of spending power that New Zealanders have—in this case those aged 16 to 19 years of age. But if anyone listening to this debate thinks it stops here think again. They are coming after you next. They are coming after other New Zealanders after they have lowered the wages of 16 to 19-year-olds because this is the only thing a National Government knows how to do. The only answer it has to any economic circumstances whether they be good bad or ugly is to reduce wages. That has always been its only answer. When wages are reduced in New Zealand that reduces spending in our economy. When spending reduces in our economy guess what? More jobs go. Jobs are lost through ill thought through pieces of legislation like this. They certainly are not created. 
Hon Simon Bridges 
: This is real Labour Party 1990. 
SUE MORONEY 
: He is showing a bit of energy now that Simon Bridges but why did he not show a bit of energy when he was drafting this legislation? Why did he not stand up to his tired old party and tell them that this is the pathway to a downwards economic cycle not an upwards economic cycle at all? All it does is introduce more exploitation and more discrimination into our workplaces and that is something we definitely do not need. 
I would like to invite Simon Bridges to have a look at the coverage from  
Campbell Live 
 the other night of the hundreds of people lining up for seven jobs. They were stores jobs and not very highly paid ones. They were pretty ordinary stores jobs but a job none the less. His piece of legislation is inviting that employer to actually exploit people to actually say to most of the people in that queue: “Actually don’t even bother lining up because I’m not going to employ you. You are a bit dearer than the other people.” That is not going to actually fix the deep problems that we are experiencing with the New Zealand economy. It is no wonder that the economy is going nowhere under this Government that it is flatlining because this piece of legislation is just another hopeless piece of legislation that does nothing to lift economic performance. In fact it does quite the opposite. 
HOLLY WALKER (Green) 
: 
 Last night this House took a significant step towards ending discrimination and eliminating a serious inequality in our law. That of course was passing the second reading of the Marriage (Definition of Marriage) Amendment Bill. Many of those who supported that bill including many Government members talked about the message it would send to young people about their importance their value their human rights and their mental and emotional well-being to remove that discrimination. It was a great moment in this House and it made me very proud to be a member of it. But in that context it is particularly distressing that the very next day after sending such a positive and affirming message to young people about their value and their future we are undermining that message with this discriminatory and damaging Minimum Wage (Starting-out Wage) Amendment Bill which sends exactly the opposite message to young New Zealanders. 
What this bill says to young New Zealanders is that they are not worth as much as older New Zealanders that their work and their labour even if employed doing exactly the same job as an older counterpart or managing them—[ 
Interruption 
]—that is right is not as valuable as that older person’s labour and that their needs their expenses and their rent food and living costs are not as important as those of older workers—that their rights are not as important as those of older workers. 
It is no wonder that young people are disengaging in droves from politics and Parliament and voting when this House passes legislation like this that disempowers and discriminates against them en masse just when we might have convinced some of them of our relevance our value and our commitment to them and their future with the marriage equality bill last night. If you looked around the gallery here last night it was young people whom you saw. Just at that point we slam them with this bill and undermine all of that good work. 
The discrimination inherent in this bill is not acceptable in just the same way that it is no longer acceptable to pay women less than men for doing exactly the same job—although arguably that does still take place in some cases—and just as it is not acceptable to pay workers of one ethnicity less than workers of another ethnicity. When these things occur and they come to light we are rightly outraged we prosecute offending employers we shake our heads we tut-tut and we talk about discrimination. Yet here we have a Government that is prepared to introduce comparable discrimination against young people into our employment law. 
On the basis of human rights and discrimination alone this bill should be dead in the water but as this Government has demonstrated with a number of other pieces of legislation—like the current welfare changes which impinge on the rights of women young people and children—rights-based arguments do not have a lot of impact on this Government. So let us have a look at its own economic rationale for this bill and see how it stacks up. This Government says that this bill will support young people entering the workforce and encourage employers to take on young workers. What a joke! Combined with its other discriminatory policy against young workers of 90-day trial periods this legislation means that at most young people can expect to be hired at below subsistence wages for 3 months and then flicked on in favour of another new cheap young worker. 
I was not on the Transport and Industrial Relations Committee but I have heard that it heard no evidence that introducing youth rates would decrease youth unemployment. In fact there was conflicting evidence from Government departments and economists on exactly that point. Even two submissions from employers did not think that the bill would actually help with youth unemployment. What the bill will do is incentivise employers to keep wages low keep New Zealand a low-wage economy and continue to encourage the 50000-plus New Zealanders every year who leave permanently for better wages and opportunities overseas. If this Government really cared about youth unemployment it could invest in skills training and apprenticeships more than it has. It could improve access to student support. It could support the manufacturing sector and it could look at what is working in places like Otorohanga with the mayors task force. But it has not done that. 
This bill does not make economic sense it will not help youth unemployment it is discriminatory and it sends a terrible message to young people about the value that this Parliament places on them. I am ashamed of this House for passing it. 
Dr CAM CALDER (National) 
: 
 My dad died when I was 6 years old. I was brought up by my mum and she used to call me her right-hand man. The reason for that was that she got me to rake up the leaves and mow the lawns. I mowed the lawns with an old push mower and I can remember to this day the joy I saw when I came downstairs and there was a new Briggs and Stratton 4-stroke Kingfisher mower which I was able to use. I fired it up and mum came out in great concern because I was throwing lemons through the side to see them explode into a myriad pieces. I am telling you this story because that was my first entry into earning money—earning money. I used to do my own lawns then we would tie the mower to the back of the bike we would ride around lower Westown in “Taradise”—New Plymouth—and I would sell my labour and mow old people’s lawns. I learnt to realise that mum was right: money does not grow on trees. Money does not grow on trees and I think that if she said that to me once she probably said it to me 500 times. But I learnt the lesson. What I learnt also was the dignity of work—that you get out of life what you put into it. If you want to make a metaphor you can say that we got a foot on the pathway to personal responsibility. I got a chance to get the keys to the Zephyr buy a surfboard or nowadays get the keys to a Nissan Skyline. 
This bill the Minimum Wage (Starting-out Wage) Amendment Bill is about young people getting opportunity young people getting skills and young people getting the money to survive in a difficult labour market. The axing of the youth wage by Labour cost up to 9000 jobs. The Ministry of Business Innovation and Employment suggests that the starting-out wage in the first 2 years could provide 2000 jobs for 16 to 19-year-olds. I commend this bill to the House. 
The question was put that the amendments recommended by the Transport and Industrial Relations Committee by majority be agreed to. 
A party vote was called for on the question  
That the question be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Maori Party 2; Mana 1; Independent: Horan. 
Question agreed to. 
A party vote was called for on the question  
That the Minimum Wage (Starting-out Wage) Amendment Bill be now read a second time. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Maori Party 2; Mana 1; Independent: Horan. 
Bill read a second time.