Hipkins Chris: Minimum Wage and Remuneration Amendment Bill — In Committee 
Hipkins Chris: Minimum Wage and Remuneration Amendment Bill — In Committee 
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CHRIS HIPKINS (Labour—Rimutaka) 
: 
 After listening to Allan Peachey I was reflecting on his role in the Chamber as he has been reflecting on my role. I have decided that perhaps his role is to make Chris Auchinvole look dynamic and articulate. I cannot think of anything else that he contributes to this Chamber. 
Michael Woodhouse 
: You will be in detention. 
CHRIS HIPKINS 
: I will be in detention. This bill the Minimum Wage and Remuneration Amendment Bill frankly is a pre-Budget test for the Government. Do Government members really care about the people on the lowest incomes at the bottom of the heap who are not earning even the minimum wage ahead of the Budget in a very tough economic climate or do they not? That is fundamentally what their vote on this bill will determine. Are they interested in the people at the bottom of the heap or are they not? We have not seen any evidence from Government members since they were elected in November that they are interested in the people who are earning the lowest incomes and who are the most vulnerable. The very first thing those members did when they came into Government was to take away those people’s tax cuts and give them to the people at the highest end of the income spectrum. 
But Government members have done one thing when it comes to the minimum wage and I will give them credit for that. Just recently they increased the minimum wage very mildly minimally by $3.72 a week. That is not a heck of a lot when we consider the current economic climate. This Government today and tomorrow going into the Budget has an opportunity to signal to vulnerable workers people who are earning modest incomes whether it cares about them. 
Allan Peachey 
: We’re on Part 2. 
CHRIS HIPKINS 
: I will speak to Part 2. The very first part of Part 2 inserts the word “remuneration” after “minimum wage”. This bill is about dealing with overall remuneration not just the minimum wage as it stands now and extends it to contractors. It says that people who are currently working on a contract for services should be entitled to a fair day’s pay for a fair day’s work which they are not getting at the moment in many many instances. During the first part of the discussion on the bill I checked through some of those contracts for service. The pizza delivery boys are not getting a fair day’s pay for a fair day’s work. I used a pizza delivery firm the other day and I had cause to think about the fact that the delivery boy— 
David Garrett 
: Did you give him a tip? 
CHRIS HIPKINS 
: I did. I gave him a very generous tip. It was more than the minimum wage. So there we go. It was a terrible miserable rainy night and I decided that the pizza delivery boy had earned it so I gave him a big tip. Those workers probably are not earning the minimum wage. Under the current law they do not have to be paid the minimum wage nor do the people who deliver the newspapers that clutter up our letterboxes whether or not we like those newspapers nor do the cleaners. There are an increasing number of cleaners working under a contract for services. 
Michael Woodhouse 
: Perhaps if you offered pizza during your clinics more people would turn up. 
CHRIS HIPKINS 
: That is right. Has the member been reading Twitter? It is good to see that the Government backbenchers are well occupied. Areas of work where contracts for services are used also include courier services. We know that a number of people in courier businesses are struggling at the moment for a variety of reasons. Building and construction services are also included. To return to a point that I have already raised why should one of two workers on a building construction site earn less than the other? One earns more than the other simply because one is an employee and one is a contractor. One does not earn the minimum wage and one does. How is that equitable? The amendments proposed by my colleague Darien Fenton help to address that issue. 
I want to talk also about Supplementary Order Paper 4 which Darien Fenton has put forward regarding a commitment to increasing the minimum wage—moving it up to $13 an hour effective from 1 July this year to $14 an hour from 1 July 2010 and to $15 an hour from 1 July 2011. For somebody who is sitting in this Chamber $15 an hour probably does not seem like a heck of a lot. I think just about everybody who works in this building would earn more than $15 an hour except for maybe the cleaners if they are contractors. It is not a heck of a lot of money. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
CHRIS HIPKINS 
: Prior to the dinner break I was talking about the addition of the word “remuneration” to the title of the bill. In studying the definition of remuneration I draw members’ attention to in particular Supplementary Order Paper 4 which has a more comprehensive definition than the original bill does and I think it adds quite a lot of value. It is important to note that the intention of this bill is to extend the application of the minimum wage and minimum income beyond those who earn a wage to include contractors as well. Adding the word “remuneration” to the title does that because it is clear that the dictionary definition of the word “wage” does not adequately capture it. By adding the word “remuneration” to the title we more adequately capture the spirit of what the bill is trying to achieve. 
National members have talked a lot about compliance costs and a lot of their objection to the bill appears to be on that basis. It is probably fair for us to assess whether that is a valid concern to have so I looked at Supplementary Order Paper 4 to find out what sorts of compliance costs this legislation would add to businesses. Under new clause 8A inserted by Supplementary Order Paper 4 the main compliance cost would be the requirement for employers to keep records. What sorts of records would they be required to keep? They would be required to keep the name of the specified person. I cannot see how that would add any additional compliance cost to employers at all. I would be very surprised to learn of an employer or of someone contracting a person who did not record the person’s name. So that would not add any compliance cost. An employer would need to record the person’s postal address. Presumably if any form of remuneration was involved the employer would have the person’s postal address so there would be no additional compliance cost. Employers would need to record the kind of service that the specified person is engaged to provide. I would be flabbergasted to learn that any employer who provided that information incurred a compliance cost. I do not think that a single business in the country would engage a contractor without specifying the kind of service the contractor was to provide. So there would be no additional compliance cost there. 
Employers would need to record the hours during which the specified person provided the service. That would probably be something new for employers—they would need to record the hours—but I cannot see that it would be a huge compliance cost. I cannot see how that would add a compliance cost. They would need to record the remuneration paid to the specified person for the service and the method of calculation. Odds are that the person’s contract would record that kind of information anyway so really there would be no significant increase in compliance costs for a business. Compliance costs appear to be National members’ fundamental objection to this bill but we have gone through the bill and disproved it. There would be no huge increase in compliance costs. 
What the legislation comes down to is a fundamental philosophical commitment as to whether people should be entitled to a fair day’s pay for a fair day’s work. We on this side of the Chamber say that they should and that it should not matter whether a person is a contractor or an employee. People should get a fair day’s pay for a fair day’s work—that is the Labour Party position. The National Party position is not to support that—it is that contractors are on their own and that if they are earning only $2 an hour then that is their problem because it is a free market they have choice and they can go somewhere else. Well they do not really have choice at all. The choice is either to take the $2 an hour or to take nothing. We do not think that that is fair. We think that people who are contracted to provide a service should be paid at least the minimum wage. New section 5A inserted under new clause 7B in Supplementary Order Paper 4 provides for a comprehensive review of the minimum rate of remuneration after 3 years. That is a fair thing to do as well. Obviously costs go up and a variety of factors might impact on the minimum wage so it should be reviewed after a period of time. 
One other objection that National members may raise relates to people who might work overly long hours spin out jobs so they take longer and therefore increase the costs involved. Actually there is a protection for employers to stop that happening. I draw members’ attention to clause 11AC inserted by new clause 9A in Supplementary Order Paper 4 entitled “Specified person may not recover minimum remuneration for time that exceeds agreed reasonable time to provide service”. If it is clear that someone is simply spinning out a job in order to increase the amount of money he or she can be paid then the employer or business has recourse not to pay for that. The clause is an additional protection for the employer and removes another of the National Party’s possible objections to this bill. 
Really I cannot see that National members can have any other legitimate objection unless their objection is to the idea that people should be paid a minimum wage. They should be honest about that. Roger Douglas is very honest—he does not support having a minimum wage. He does not think there should be any specified minimum wage.