Mapp Wayne: Minimum Wage (New Entrants) Amendment Bill — Third Reading 
Mapp Wayne: Minimum Wage (New Entrants) Amendment Bill — Third Reading 
[Volume:641;Page:11604] 
Dr WAYNE MAPP (National—North Shore) 
: 
 A bill like this Minimum Wage (New Entrants) Amendment Bill is I acknowledge always put forward with the best of intentions. I appreciate that the Green Party has put forward a range of legislation as indeed has the Government and those members always preface it with good intentions. They say that it will rectify some aspect of injustice or it will elevate the advantages of someone. 
I notice that we always see United Future and New Zealand First sort of moving along in the slipstream as we heard in the previous speech made by Judy Turner saying how wonderful it is. I would ask those parties to pause and think because this country faces a deep-seated crisis. I do not mean it is a crisis that is an instant crisis. It will not break over us tomorrow but we are seeing a deep-seated decline—a malaise if you will—as this country just progressively slips back relative to other countries. Yes we have some growth. That has been well acknowledged but this Government has squandered that growth. It has squandered some of the best economic opportunities we have seen for years. 
I want to go through the legislative programme and this is the point I am trying to make because each of these measures acts as an impediment to productivity growth. None of them are huge impediments in their own right but their cumulative effect is very serious. In the year 2000 when the Government won the Treasury benches New Zealand had high productivity growth as well as high economic growth and there is a difference. 
Today productivity growth is low—there is no growth in fact. It is actually flat. The Government is now relying on three things for growth. One is commodity increases which have gone up. Growth in the total size of the employment has increased; there is no question about that. But there has been no productivity growth. Do members know what that means? It means that the living standards of New Zealanders relative to that of people in other countries is declining. The Government says that it is only a small decline and that it does not matter year to year but New Zealanders look forward. They understand these things and they make their own choices. [ 
Interruption 
] That number is accelerating—600 per week are now travelling to Australia. Why do they do that? They do it fundamentally because there are better economic opportunities there. Why are there better economic opportunities there? It is not because Australia to quote a former Prime Minister digs itself up. It is actually because Australia has a more competitive economic system. It has higher productivity growth. It has a lower level of taxation. In fact the current Government in Australia each and every year has had a planned programme of tax reductions—not gigantic one-off reductions but planned and progressive reductions. All that builds confidence and security in people about their opportunities. So New Zealanders young New Zealanders especially see that fact and make their own choice. They see greater opportunities and greater prospects and they vote with their feet. 
I will go through the range of legislation of which this bill is a part that has hindered productivity growth. I emphasise that point for Government speakers: productivity growth. Today the particular measure that is being debated is the Minimum Wage (New Entrants) Amendment Bill. I emphasise the term “new entrants”. Yes that was a change. I know that the Maori Party thinks it is a terrible thing and that even the 200 hours of employment set out in the bill is discrimination but the truth is that we are talking about 16 and 17-year-olds; we are not talking about 16 to 25-year-olds and we are not talking about 60 percent. The gap is only 20 percent and for only 2 years. Actually it is a time when young people should be at school in any event. Countries that are much higher up the income scale than New Zealand—the United States Australia and so forth—actually do have youth rates. Are those countries in crisis? The answer is no. 
So this legislation will be just one more impediment to productivity growth. What is another one? Well the Green Party—also with good intentions no doubt—has put forward the concept of flexible working hours. That is another thing that just adds cost and complexity to the way that business is undertaken. The Labour Government even wants independent contractors to be subject to employment legislation. What an oxymoron that would have to be! I guess it was some sort of crazy token to one of their more—let us be charitable—inexperienced members of Parliament Darien Fenton. But one can only imagine that someone like the Minister of Finance was wiping his brow and thinking: “Christ Almighty why on earth is this happening in a party I’m a senior member of?” 
Now of course we can refer to the Employment Relations Act and particularly to the amendments of 2004. I acknowledge that many of the changes from the Employment Relations Act of 2000 were relatively smoothly adapted into employment law but the changes from 2004 have caused significant problems. There has been a lot more litigation in front of the Employment Court and a higher level of strikes than this country has hitherto had all of which adds to the costs across the workforce. 
Then there is the Resource Management Act. At every public meeting I go to someone is bound to raise their direct experience with the complexities of the Resource Management Act. Did this Government do anything at all meaningful to relieve that burden? The answer is no. 
Labour’s very first move in Government was to remove competition in accident compensation. I want to dwell on that point for a moment. When National introduced competition we had an iron-cast rule that there would be 24-hour 7-day no-fault coverage. That was never denied by Labour. The full rate of coverage was always there and the treatment was always there. People who suffered injuries were not adversely affected but employers had dramatic reductions in the size of their premiums—that is their costs went down and their productivity went up. Then we had the complexity of the Land Transport Management Act. Now it is sought to have the minimum wage set at $12 an hour. There is the local government legislation and so on and so forth. Each one of these measures has hurt productivity. It is now zero. 
The legislation that is being promoted today well-intentioned though it might be will be just another little thing that will harm productivity. But if we add it to all those other things we have quite a serious impact. So whereas 9 years ago this country had productivity growth of about 1.5 percent—still less than Australia or the United States but it was 1.5 percent of GDP—there was actually a chance that we could go up the OECD ladder in terms of growth. Today it has inexorably declined to zero. I am not talking about economic growth—let us not confuse these points—but about productivity growth. Real wealth ultimately comes from productivity growth. 
National is saying as a party that we have to take stock. We have to be careful in the nature of the compliance costs we load on to business. That does not mean to say we cannot deal with real injustices and it does not mean to say we cannot improve the situation but there is no point in just adding on each of these little measures and imposts that ultimately harm the growth of this country. I have to say to the Government and the parties that support the Government that the effect of this legislation will be to drive more New Zealanders out of this country and it will be the very people the Government wants to help because the people who go will be the young people. They will go to Australia for a better future and that is an indictment on this Government.