Fenton Darien: Minimum Wage (Starting-out Wage) Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Fenton Darien: Minimum Wage (Starting-out Wage) Amendment Bill — In Committee 
[Sitting date: 19 March 2013. Volume:688;Page:8622. Text is incorporated into the Bound Volume.] 
DARIEN FENTON (Labour) 
: 
 I am privileged to be the first to stand from the Labour Opposition to strongly oppose the Minimum Wage (Starting-out Wage) Amendment Bill. I want to start by just reminding listeners and the people who have taken a great interest in this debate exactly what this bill does. What this bill does is return us to youth rates of a kind we have not seen since last century. For 16 and 17-year-olds starting out in their first job they can be employed on 80 percent of the minimum wage. Fair enough you may say. But the problem with this bill is that if they go on to another job while they are still 16 or 17 they can be employed on 80 percent of the minimum wage again and again and again. So the experience that they gain as young workers—even leading up to their time of being 16—at the age of 16 and 17 counts for nothing if they leave their job and go on to another job if they are fired under the 90-day no-rights bill and if there is no reason given as there does not have to be under this Government’s handiwork. 
What it means is that it is basically a revolving door youth rate. It is not a starting-out youth rate. If the Government were serious about starting out it would have stuck with the provisions that were already in the bill that apply to only 16 and 17-year-olds for 3 months or 200 hours whichever is the greater. That applies only once. So all of the arguments that have been put across the House about how this gives a young worker a chance how they need to have time to gain experience and so on are just rubbish because no one can convince me that someone who works for 6 months in a job at 80 percent of the adult wage at $11 an hour does not gain experience and then deserves to have their pay cut if they move on to another job. 
We want and the Government says it wants to see 16 and 17-year-olds in study. We want to see them at school at polytech at university or in apprenticeships. The National Party says that is what it wants to see. If that is the case many of them will be working part-time in part-time jobs. So they will have a job in the holidays in between times. They will have a job after work perhaps. But those jobs will be jobs that often are temporary that do not carry on for 6 months and so those people those young people who are trying to get ahead by studying will be in the situation where every time they start a new job while they are 16 and 17 they are going to have go back down the ladder to 80 percent of the adult wage. 
The second thing this bill does is bring back youth rates for 18 and 19-year-olds which we have not seen in New Zealand since last century. We have not seen them in New Zealand since last century. What this bill means is that 18 and 19-year-olds who have been on a social security benefit for 6 months can be punished for having been on a benefit by being able to be employed at 80 percent of the adult wage. We are not talking about just unemployed young New Zealanders. By the way I need to correct Mr Banks and I will have some other things to say about his contribution the other day. But he was talking about young New Zealanders of 15 on the dole—15 and 16. They do not get the dole. They do not get the dole. Social security benefits in this bill cover the whole gamut of them all including the unemployment benefit but also things like the invalids benefit the sickness benefit and—what is it called Jacinda? 
Jacinda Ardern 
: The independent youth benefit. 
DARIEN FENTON 
: The independent youth benefit. It covers all of those and also young parents who are 18 and 19. So they will have been on a social security benefit. They drag themselves up to Work and Income get offered a job and it is at 80 percent of the adult wage. They say under this bill: “Oh I’m sorry Work and Income. I cannot manage on 80 percent. I can’t manage on $11 an hour.” But what this bill will allow is that if Work and Income has deemed that job to be satisfactory on its terms—and we all know how tough it has become recently how unfriendly and what an awful experience it is for so many people—it can then say to that 18 or 19-year-old: “Well I’m really sorry but you have to have a stand-down of 13 weeks.” So they get doubly punished—first of all by dragging themselves off a benefit. Most of them will have been on a social security benefit through no fault of their own. They will have tried hard to get a job. They apply for a job and when an 18 or 19-year-old says that they cannot afford to live on $11 an hour and they want to look for something else they get told by Work and Income that they are being sanctioned and they are going to be punished by having a stand-down for 13 weeks. 
There are other issues around this bill that have not been answered and were not answered satisfactorily in the Transport and Industrial Relations Committee. There are all the issues around discrimination for young people and I will put those aside for now and come back to them perhaps later in the debate. But on the issue of work discrimination discrimination on the basis of employment there is very strong advice from the Human Rights Commission that employers should not discriminate against people on the basis of their employment status—in other words if they have been or are on a social security benefit. 
What I think this Government is doing is leading employers down the garden path to believing that when someone comes to apply for a job an 18 or 19-year-old they will be able to ask them whether they are on a social security benefit. They will be able to ask them that because they want to be able to offer them 80 percent of the adult minimum wage—in other words $11 an hour—and then they are able to discriminate against those workers because they are able to find out the information and then the worker can say: “Well I’m sorry but I don’t want the job.” or the employer can say: “Well I’m sorry I don’t want you because we don’t want people who have been on a benefit.” There are real privacy issues involved in this that have not been satisfactorily answered. 
My question to the Minister in the chair is why we are doing this. Well I think we know the answer to that. The answer is that the National Government has no ideas about how to address our crisis in youth unemployment. Two years ago David Bennett that member over there stood up in this House and passionately opposed youth rates. There is a bookload of quotes from him about how they were inappropriate and I am looking forward to reciting them. We even heard from Simon O’Connor some quotes from the Catholic Church. I know the Catholic Church talks about the dignity of work and about respect and the dignity is about the way people are treated and how they are rewarded for their work. It is not about just having a job. 
Simon O’Connor 
: It was Mr Little who was quoting Pope Francis—your colleague behind you the one smiling. He quoted Pope Francis. 
DARIEN FENTON 
: And you quoted it back Mr O’Connor—you did. 
Simon O’Connor 
:  
Rerum 
Novarum 
—you should read it. 
DARIEN FENTON 
: Yes that is right. I have got many. I have read at length the various encyclicals of instruction from the Catholic Church because I have been engaged in having those debates with the Catholic Church about their workers over many years. But the Catholic Church and the church generally does not support the dignity of work if it means people are not fairly rewarded for their work are not fairly treated are not able to earn a living are not able to build a decent life and are not treated with respect. That is what this bill does. 
The other excuse is that this is somehow going to create jobs. That is the other excuse. As my colleague Andrew Little has so rightly pointed out cutting wages does not create jobs. There are no jobs unless there is work to be done. Employers do not take people on as some kind of beneficiary. They do not do it out of the kindness of their hearts. They do it because there is work to be done. And the workers who come along and do that work have a right to be respected and paid properly rewarded properly for the work they do. 
This bill not only will impact on 16 to 19-year-olds but also will impact on older workers. I have had many of them express concern to me about creating a market of young workers who are cheaper who are on $11 an hour and who will displace older workers. Indeed that has happened in the past. 
The worst thing about this bill is that we have tried these methods before in New Zealand. This is not a new idea. In fact it is a very very old National Party idea. It is a very old ACT Party idea that if you cut young workers’ wages it creates jobs. Just go back to the last time we had real youth rates in this country in the 1990s. When youth rates were $4.50 an hour when people were getting paid $4.50 an hour we had some of the highest youth unemployment that we have ever seen in this country. So this bill is not going to deliver on its stated aims.