Goldsmith Paul; Wood MichaelHon PAUL GOLDSMITH (National): Thank you Madam Chair. I was just responding to the Minister's comments and I didn't quite understand it. Maybe that's my problem but he seemed to be saying that I was making the point that the bill allows for regional variations accepting the fact that a business operating in Auckland might have different requirements and needs than one in Hastings for example or the Hokianga. I asked why wouldn't that same logic apply to differences between very large companies with 10000 employees in too and he said it sets a minimum floor. Anna Lorck: Great workers in Hastings.Hon PAUL GOLDSMITH: Thank you. What I can't sort of work out is if we have a regional variation where that minimum floor when it comes to pay rates or leave entitlements and so forth which may vary in different regions—I presume that is the point of the regional variations that you would have a different minimum base rate potentially and a different penalty rate potentially or different arrangements in relation to flexible working potentially. All those things would be different because I would have thought that was the point of regional variations. So I don't quite understand why that logic wouldn't also apply in relation to the size of the company. Secondly I wanted to come to my two amendments in this part. The first is amending clause 114 which is the mandatory content for each fair pay agreement and my suggestion is that that should include the impact of the agreements on the productivity of the sector in which the agreement provides. Because the Minister has very sort of casually claimed that this misnamed fair pay agreement legislation would improve productivity in New Zealand's workforces and he's offered no evidence whatsoever to back that up. So I'm just curious as to how he thinks that's going to happen magically. But if it's good enough to debate and include in a fair pay agreement arrangements for training and development and for leave entitlements why does it not also have to include if you're going to have this—and of course we don't want to have these at all but if you're going to have them surely some recognition of the need to discuss and consider the productivity of the workplace and the occupations because ultimately it's only improved productivity that leads to higher wages in the long term. You can legislate for them as much as you like and you can force companies to do it but ultimately if the businesses are not productive it won't be sustainable. So my suggestion is why is that not part of the mandatory content? I just have a suspicion that he won't agree to that. He may do; I don't know. He could surprise me. You never know; he might agree to it. But if he doesn't then my fall-back position is that it should be included in clause 115 which is the list of topics that bargaining sides must discuss. And I can't think of any objection that you could come up with to argue against including it at least in the topics that must be discussed for a fair pay agreement. So alongside health and safety requirements alongside arrangements for flexible working and alongside the objectives of the proposed agreement why on earth would he not include a discussion around the productivity of the workforce and the occupation so that the two sides who are bargaining have to have a discussion and if needs be an argument about how we make our workplaces more productive? Because that is the key challenge for so many workplaces and a focus purely on entitlements and allowances and what you're going to get paid without relating those to the productivity of the firm I think would make it very difficult. It would be a limited discussion and not helpful. So that is my point there. Finally in clause 116 we have subclause (2) referring to any fair pay agreement that is contrary to law and I wondered what he had in mind there. I presume he might have in mind things that might breach competition law in relation to cartel activity and agreements. I'm not sure but I'd be interested if he was able to enlighten us as to what he had in mind in relation to clause 116 as well.Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): Thank you Madam Chair. In respect of the member's first question I have already answered that. The reality is as I said that unions and employers can negotiate for differential terms and conditions based on the size of enterprises. In terms of the member's suggestion via an amendment of inserting a discussion about productivity the Government doesn't agree to that and the reason is that fair pay agreements (FPAs) as the member accurately describes set terms and conditions for employees. Productivity is an outcome that we hope will arise from fair pay agreements and other investments that the Government is making. If we were going to insert productivity then we could insert other measures such as the happiness and satisfaction of the workforce and you could go on and on. Those are outcomes. FPAs are about setting minimum conditions so a measure such as productivity is important but doesn't fit into the space.In respect of clause 116 it is simply about ensuring that FPAs which do get brought into force by a secondary piece of legislation are consistent with other laws. There's nothing specific about which laws—they have to be consistent with all other laws.