Dyson Ruth: Minimum Wage (New Entrants) Amendment Bill — In Committee 
Dyson Ruth: Minimum Wage (New Entrants) Amendment Bill — In Committee 
[Volume:641;Page:11177] 
Hon RUTH DYSON (Minister of Labour) 
: 
 I will start by acknowledging the sponsor of the bill Sue Bradford. I thank her for her determination and her stubbornness on many occasions as she watched the bill go through its many iterations at select committee in and out and I thank her for her support for the Supplementary Order Paper that I am moving to amend clause 4 which we are debating at the moment. This is really the heart of the legislation: the prescription of the minimum wage. 
I listened with great amusement—and that is the kindest adjective I can apply—to the contribution from the member from Southland Eric Roy who described the process of reviewing and setting the minimum wage in Sue Bradford’s bill and Supplementary Order Paper 137 as if it were new. Frankly for the National Party perhaps it is new but it has been that way as a process in the Minimum Wage Act since 1983. What happened in the 9 years from 1990 to 1999 when there was a National Government in New Zealand was that National complied with the law because all the law stated was that one had to review the minimum wage. It did not say one had to increase it and that is why the previous National Government did not do so. For 9 years the adult minimum wage stayed at exactly the same rate except for a pathetic increase of $1 an hour over the entire 9 years and at that time young people were included right up to the age of 20. 
The youth minimum wage which is the point of this debate applied to 16 17 18 and 19-year-olds. Under National one did not become an adult until the age of 20 and what is more the youth rate was set at 60 percent of the adult rate not the current 80 percent. So for that member to come in here and say that this is new is just nonsense. It is new to increase the youth minimum wage; that has been happening only in the last 8 years under a Labour-led Government. That is why the graph of the minimum wage looks like it does with the blue numbers flat-lining and the red numbers going up. Sue Bradford’s bill will improve that situation even further. 
I also commend the Transport and Industrial Relations Committee because this legislation is not as easy as the original proposal. The idea that jobs should be paid according to their value is pretty straightforward and I think that it is an excellent principle on which this bill was developed. But the submissions to the select committee raised a number of issues including the main driver behind our consideration of the amendment which was the socialisation skills that young people do not have. It is not skills for the job and it is not skills generally that training itself will fix because we still have a training rate linked to skills—and the list member from Christchurch did not seem to indicate her understanding that we have a training rate that is skill-specific related. This is about socialisation and that is all. Frankly some of the contributions at the select committee would indicate that even the adults who made the submissions had not quite got to that stage in their presentations either. So after hearing from the select committee and listening to what are quite complex submissions and debates I proposed this amendment. 
As I said earlier I am really delighted that the proponent and sponsor of the bill Sue Bradford has urged her caucus colleagues in the Green Party to support it. I also acknowledge New Zealand First the Maori Party and United Future which are also supporting it. [ 
Interruption 
] Well I thought United Future was going to support it. 
Darien Fenton 
: The Maori Party isn’t. 
Hon RUTH DYSON 
: The Maori party is not supporting it? I cannot believe that those members would not support such a good step forward for young people. They still have time to change their minds as the debate will go on for a little while yet. But the parties that are supporting the bill did so after a lot of careful thinking. 
We do not want to send the message to young people that leaving school early with no qualifications is a good idea and I do not think this bill will drive that message. Our increase in the youth minimum wage over the last year has shown a negligible impact on the number of young people who are leaving school early. In fact if anything this increase has allowed people to stay at school longer because the part-time jobs are better paid and they are able to balance work and school without doing long hours. We do not want to send a message that it is OK to leave school too early with no qualifications. 
I also want to just touch on the other spurious point that Eric Roy made in his contribution—I think Paula Bennett may have made passing reference to this as well—which was about the possible impact on unemployment for young people that a higher wage would have. I cannot believe the short-term memory loss that has occurred in the National Party in the last 8 years. When National was last in Government there were 161000 people on the unemployment benefit and that figure now is 20000. There has been a drop in the rate of people on an unemployment benefit of 140000 people despite the fact that every single year we have increased the adult minimum wage we have increased the youth rate we have increased the percentage of the adult rate that the youth rate has attached to it and we have also made sure that people at 18 years of age receive the adult rate. 
With all those changes we have had a decrease of over 140000 people on an unemployment benefit. 
David Benson-Pope 
: Tell us about the young people. 
Hon RUTH DYSON 
: My colleague asks about the young people. Well I just happen to have that information. When National was last in Government there were 17500 18 and 19-year-olds on the unemployment benefit despite the fact that the youth rate was so low that a person could have employed 20 people in any business and it would hardly have made a little bump in his or her wage bill. The youth rates were a pittance. What is that figure now? The rate of 18 and 19-year-olds on an unemployment benefit in our country now is 1000 people. Those are the statistics that National should think about before it comes into this Chamber and raises spurious arguments in opposition to improving the way that 16 and 17-year-olds are recognised through their wage packet. 
In conclusion I acknowledge that this bill does not go as far as the sponsor of the bill and the Green Party originally intended. That is one of the things that happens when we are in a Parliament that comprises a number of parties. If we have a day when the Green Party is a majority Government it will be able to go ahead with exactly what its members want without any debate discussion or perhaps compromise with other parties. But I seem to recall that the Green Party was a strong supporter of proportional representation; certainly my colleague Rod Donald was as co-leader of the Greens. This is one of the results of proportional representation. We have to work with other parties and we have to make some compromises. We cannot just bowl ahead and do what we want. 
I am pleased that we have been able to reach a position that is supported by the sponsor of the bill because this bill is done for the betterment of young people so that the contribution they make in paid work is properly valued. The amendment applies to all employment regardless of whether it is the first second third or fourth job. I am glad that other members read the full Supplementary Order Paper rather than following Kate Wilkinson’s very shallow example of not even reading it. Lawyers should read the legislation before they make a contribution in Parliament; it is very damaging to one’s reputation if one does not do that. It is very clear that the legislation applies to all paid employment of 16 and 17-year-olds. It includes employment undertaken before the commencement of the Act. It does not include employment for those under 16 years of age. That is a debate for the future I am sure. 
In my view this legislation is a huge step forward for 16 and 17-year-olds. It recognises the primary valid concern of employers that some period of socialisation be required. This period is almost a transition between school and a paid job. Perhaps the 200 hours was too much—it was only 5 weeks in a full-time job—but we have reached a position now where 200 hours or 3 months applies whichever is the shorter across all employment. That period can obviously commence prior to the implementation of the Act. There will be a huge wage increase for people and that recognises the value of the work they are doing. Many of them are doing exactly the same work as people who are older and who are getting paid more. 
I also acknowledge the contribution from Business New Zealand. The point it raised in the Transport and Industrial Relations Committee is also reflected in this Supplementary Order Paper and indeed in the bill as reported back from the select committee. Business New Zealand was not supportive of the bill but it did say that anyone supervising somebody should be paid at the adult rate. This legislation achieves that as well.