Fenton Darien: Questions for Oral Answer — Questions to Ministers 
Fenton Darien: Questions for Oral Answer — Questions to Ministers 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
7. 
DARIEN FENTON (Labour) 
 to the  
Minister of Labour 
: Does she stand by her statement that the new minimum wage announced yesterday “strikes the right balance between protecting low paid workers and ensuring that jobs are not lost.”? 
Hon KATE WILKINSON (Minister of Labour) 
: 
 Yes. 
Darien Fenton 
: How is the balance right when New Zealand’s top 48 chief executive officers received an average pay increase of $202000 in 2010 while thousands of Kiwis on the minimum wage received a pay increase of just 19c an hour in real terms over the past 4 years under her watch? 
Hon KATE WILKINSON 
: As the member knows the annual task of setting the minimum wage is always a balancing act. It has been a dilemma for many Ministers of Labour. We set it at the rate that we thought was the most sustainable to protect employees’ purchasing power whilst not jeopardising jobs and resulting in job losses. Had we increased it to $15 per hour our advice was that this could have resulted in the loss of up to 5500 jobs. We were not prepared to actually jeopardise those jobs because our commitment is to job protection not job destruction. 
Darien Fenton 
: Why does she continue to insist that there will be job losses in increasing the minimum wage when Treasury advice is to the contrary? 
Hon KATE WILKINSON 
: The member makes a very interesting point because the Treasury advice also recommended a nil increase. We did not accept that advice. In fact the Department of Labour’s advice recommended a 30c increase. We actually did not accept that because we thought a 50c per hour increase was actually fair and reasonable and sustainable in the circumstances. 
Darien Fenton 
: How will she balance the increasing cost of living and low pay for young people on the minimum wage when she moved this year to pass legislation to cut their minimum wage by 20 percent? 
Hon KATE WILKINSON 
: Certainly the question of youth unemployment is an issue that we are all grappling with. We want to give employers the incentive to take on young people and we want a flexible market regime and a flexible employment regime that actually encourages businesses to get ahead and to take on those young people so they get their first foot on that employment ladder. 
Darien Fenton 
: Will the 50c minimum wage increase address income inequality and reduce poverty or was the Minister of Maori Affairs correct when he said “Such a modest adjustment from $13 to $13.50 does not reflect the political courage and strategic vision we need to eliminate poverty” and is this another example of a growing rift with the Maori Party? 
Hon KATE WILKINSON 
: In relation to the last portion of that question no; but nobody is saying that this is a silver bullet to actually address the poverty issue. This is just one measure and it is actually interesting when we use the same methodology— 
Hon Trevor Mallard 
: More like a water pistol than a bullet—more like a water pistol! 
Hon KATE WILKINSON 
: —that was used in 2002 by the then Minister Margaret Wilson—and what I would like to ask of the member who interjected is why is it that when Labour has an increase in line with wage growth it is a fairer deal— [ 
Interruption 
] 
Mr SPEAKER 
: Ministers do not ask other members questions. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I seek leave to table the confidence and supply agreement of 2005 between the New Zealand First Party and Labour which put the minimum wage up from $9 an hour to $12 an hour. 
Mr SPEAKER 
: The member will now resume his seat. That agreement is public knowledge and we do not need to waste time tabling such documents. 
Hon Dr Pita Sharples 
: When will the Minister come to the realisation that an extra $16.50 a week which is the after-tax increase for a person working 40 hours a week on a minimum wage will not reverse the dark plight of children who are living in minimum wage households and that if she raised the minimum wage to $16 per hour which is the Maori Party’s policy $99 per week would go to those whanau who really need it? 
Hon KATE WILKINSON 
: Can I say that I do share the honourable member’s concern about children in low-income households. It is an important issue and one that we discussed during the minimum wage consultation. But as I have said increasing the minimum wage is no silver bullet. The Government is assisting low-income workers in a number of ways including through schemes such as Working for Families. We are determined to create the right environment to encourage businesses to grow and create more jobs rather than legislate an unsustainable and arbitrary minimum wage level and risk the loss of significant jobs.