Minimum Wage Amendment Bill — In Committee 
Minimum Wage Amendment Bill — In Committee 
[Volume:608;Page:5135] 
Minimum Wage Amendment Bill 
In Committee 
Clause 1Title  
SIMON POWER (NZ National—Rangitikei) 
: 
 While debating the Minimum Wage Amendment Bill clause by clause we are struck by the fact that there are only four clauses in this thin small bill which has had a chequered history through this House. We are concerned at the moment with the title and in particular the reference in the title clause to the Minimum Wage Act being the principal Act. I know that my colleague the Hon Tony Ryall will be formally tabling an amendment to the title of the bill but interestingly and as has been said many times when debating the title of any bill it is incumbent upon that title to reflect accurately what is contained in the bill. Unfortunately the title Minimum Wage Amendment Bill does not reflect what is in the bill at all. 
I will give a bit of background to what the title should be. This bill essentially removes the exemption from the minimum wage provision that applies to those who undertake at least 60 credits of training per year towards a qualification on the national qualifications framework. What is disturbing about that is the fact that this bill could well affect the numbers who undertake apprenticeship training and the system of that training in this country. That is what concerns members on this side of the Chamber. For the bill to reflect that concern it should be called either the “Repeal Training Exemption Bill” or alternatively the “Undermine the Apprenticeship Training Scheme Bill”. 
The biggest worry for those on this side of the Chamber is that the whole point of that previous exemption was that the cost to the employer of providing practical training was recognised. It was if one likes the first step on the ladder for young people entering an employment relationship and provided a practical way of offsetting some of the costs to the employer of the risk of taking on those young people. What would be a substantial concern to members on this side of the Chamber is that the long-term implications of this bill could well mean a decline in the amount of training provided by employers. That would worry us. On-site training has been proven to be a productive way to bring young people into any workforce to offer an opportunity that would otherwise not have been available to them and as I said earlier effectively to give that young person the ability to get his or her foot on the first rung of that ladder. 
This legislation which is somewhat wrongly entitled the Minimum Wage Amendment Bill removes the exemption that allows that apprenticeship training to occur. The greatest concern on this side of the Chamber is the fact that that could have the reverse effect to what is intended by this bill which is one would imagine to reward young people for work done at a rate similar to the minimum wage. We say that simply to take away the exemption could leave employers in a situation where they just do not take people on and where training is not an option that they consider. 
Who is that going to help? Will that help the young person who is trying to get his or her first step on that ladder to employment? Will it encourage the employer to take that first risk to give that young person a go and to give that young person the crucial experience he or she needs? We hear so often from a young person: “I can’t get my foot in the door because they tell me I haven’t got the experience to do the job.” What is this Government about to do? It is about to legislate to take away one of the tools available to the employer to provide that experience to those young people. We on this side of the Chamber say that that is a grave grave shame. 
JIM PETERS (NZ First) 
: 
 I rise on behalf of New Zealand First to give support to the broad intention of this bill. I rise also because the minimum wage issue before us in the title clause is one that is worthy in respect of the issues covered by the last speaker at the lower level or at the higher level worthy in respect of giving a real opportunity to people in training. 
My experience in working with such schemes over the last 12 years has been by and large that employers—or would-be employers in the training sense—are doing their utmost to try to keep within the framework envisaged by the training schemes. My experience has been not so much with apprenticeships unfortunately but with training providers. This bill will give sustenance and opportunity with regard to the financial rewards that such training deserves. The only problem that New Zealand First has is not with the provision of training schemes such as we have here but with the vision of those that do not meet these criteria and with the numerous shonky training schemes that we know of around the country. One scheme in Auckland recently mentioned in this Chamber had met no such provision and the trainees or so-called trainees were working virtually as slave labour. That is also the issue for other training schemes I can speak about as well. 
The clause is correctly named because these young people—and mostly they are young although they may be in a second-chance situation—are deserving of a reasonable opportunity not just for training but also for receiving a wage commensurate with that. In particular this bill was conceived and put together in 2001 but in 2003 when the National Certificate of Educational Achievement and unit standards are far more accepted as the broad qualifications for trade training and training of any sort this bill is needed more now than it was at its inception in 2001. 
On behalf of New Zealand First and on behalf of our spokesperson the Hon Brian Donnelly I say that we support and commend the title. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 I want to make it very clear that the National Party in Opposition is opposing this bill. The reason we are opposing it is that it will cost jobs it will cost the taxpayers through increased benefits and it will cost business through additional compliance costs. Do members know how I know that? I know because in this piece of paper known as the bill the Government has told Parliament that that will happen. That is why the National Party is moving an amendment stating that the title of the bill should reflect what the bill does. 
Our amendment states that the bill should be referred to as the “Repeal of the Training Exemption Bill”. That is a fairer description of what this bill does. It could also be called “The Bill That is Going to Cost Young People Training Opportunities Bill”. That is exactly what it will do and I can justify that on the basis of the Government’s own report to this House. In the explanatory note to the bill under the heading “Statement of net benefit of this proposal” the Government says there will be an impact on the Government’s finances from increased benefit payments. That means the dole. That means that kids who at the moment are getting the training exemption—and the words “training exemption” should be in the title of the bill—are going to lose their jobs. The Government says so on page 3 of the explanatory note. 
On page 4 of the explanatory note our left-wing minority Labour Government says there will be a decline in the amount of training provided by employers. The bill states there will be a decline in the amount of training provided by employers. That is what this bill will do as a result of removing the minimum wage exemption for young people in training and what is more the Government’s own document says there will be additional costs on business. 
Members need to know what this bill does. Right now it says that young people who are learning skills the equivalent of 60 credits on the national framework will not be covered by the minimum wage. The reason they do that is that many of the job opportunities the on-the-job training opportunities for young people have an element of training that costs the employer and part of the deal is that there is a lower compensation for those workers because they are getting the added benefit of on-the-job training—and do we not need as much on-the-job training as possible? The Government’s own document says that all the money being spent on training schemes up and down the country is wasted because it is not contributing to people getting into work. 
The National Party is opposed to anything that will add increased costs to business cause inflexibility to the labour market and cost young people jobs. That is why we want to change the title of the bill. This bill is not about the minimum wage; it is about removing the exemption and that will affect a whole lot of young people—26000 young people the select committee was advised. The Government’s own documentation—the report that the Government has tabled in this Parliament—states there will be an adverse impact on the Government’s finances from increased benefit payments. That means that some of those 26000 young people will lose their training jobs and go on the dole. That is what the Government is telling Parliament. Is that the reason United Future members want to support this bill? Do they want to support it so that 26000 young people can lose their jobs? I will be shocked if United Future members support this bill. I ask them not to so that young people can have training opportunities. I ask New Zealand First members to give those 26000 young people an opportunity. I say to them: “Don’t don’t don’t support this bill.” because the Government itself says that young people will lose their jobs. This bill will add to the inflexibility and the rigidities in the labour market. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I rise on behalf of the ACT party to say that we are opposed to this bill and that we intend to support the amendment Mr Ryall has just given notice of. I know that titles are occasionally ruled out of order by the Chair as being frivolous but if the Chair were able to make such a ruling against the Government then I regard this as one occasion when the title—in this case the “Minimum Wage Amendment Bill”—could be ruled out of order because clearly it is not an appropriate title. The title that has been put forward by Mr Ryall more accurately describes the bill. 
The notion of supporting minimum wages was I guess illustrated by Mr Peters’ speech. He set out the romantic argument for it but it is not in fact logical. The reason this bill should go through—[ 
Interruption 
] It actually should be supported by the Greens. That is the party that has argued that there ought to be a minimum wage for students and it keeps on making that argument. Here we have a Labour Government that says to the quarter of a million adult students in New Zealand: “No you’ve got to pay for your own education. Take out a loan if you haven’t got enough. No we don’t support a minimum wage.”—and I agree with that position. However the Government is suddenly turning round to 26000 people who are getting training and saying: “But in your case we are going to tell the employer that you must be paid a wage even if that doesn’t give an economic return to an employer.” The reason that the National and ACT parties are telling the Government that this is a mistake is that we do have some knowledge of business. Sure employers want to extend and help with training but they are up against costs and are required to make a return on money that people have invested in their businesses. They are not there to be a charity. The Government itself admits that this bill will cost jobs. 
I ask members opposite those who can remember—and perhaps Mr Peters who is supporting this bill; even in the area of education one would have this experience—to think about their own adult experiences. Most people would concede that they learnt more not at university not at polytech not at school but at their first job. People’s first job is crucial to their careers—and it is the hardest job to get when they have no experience. That is the start people want. In the legal profession which I am sure will not be counted in this bill if a person wants to become a barrister that person has to approach a Queen’s Counsel very politely and say: “Please sir will you take me as your pupil?” [ 
Interruption 
] 
I raise a point of order Mr Chairperson. It is extremely disruptive for Government Ministers to come over to this side of the Chamber stand behind me and hold a long conversation as they try to get the Greens to support their legislation. A Government Minister and the chief whip are holding a loud conversation behind me while I am speaking. I regard that as totally thoughtless and disorderly and they should be asked to leave. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member. It is not in order for conversations to take place in the Chamber especially in the cross benches. They muffle the sound and make it very difficult for the speaker. I ask those members who wish to carry on a conversation to please do so outside the Chamber. 
Hon RICHARD PREBBLE 
: I was just telling the Committee that if one wants to be a barrister one has to approach a Queen’s Counsel and ask to be his or her pupil. Then one works like a slave for nothing. Why do people do it? They do it because the training is worth so much. No one is actually suggesting making a change in that area. However the more valuable the training the greater the risk to the employer. If a person is a pupil working for a barrister he or she is a danger to shipping. One has to watch every single thing that person does because one is responsible for their actions. The same applies to a trainee. That person has to be watched and the idea that we are helping young people by costing them the opportunity to get a job is nonsense. 
The Government itself does not actually believe this bill. It is being put forward for ideological reasons. The Greens might believe in it and if they do why is the Government not applying a minimum wage to students? 
Hon Rick Barker 
: What’s the fundamentalist monetarist approach to that? 
Hon RICHARD PREBBLE 
: Oh that is the fundamental monetarist approach! Well that is very interesting. That is why it is not doing it—it is a fundamental monetarist approach. It is very interesting to hear that from the rather confused Government members. They cannot actually work out why they are doing nothing for students but they say they are doing something for a number of trainees. 
LINDSAY TISCH (NZ National—Piako) 
: 
 It is very interesting is it not that here we have a Government that wants to talk about growth in the economy wants to have investment wants to do all the things that Governments want to do and wants to give out money yet here is an opportunity for employers to take people on take on trainees to be involved in business at the coalface learning those skills that are so important in business— 
Hon Rick Barker 
: What does this member know? 
LINDSAY TISCH 
: That member has probably never been an employer. He has probably never employed anybody so how would he know? He is just a union man. He would not have a clue. He has never employed anyone never invested and never put his money at risk. Now he is telling young people what is best for them. 
At the moment if I want to employ somebody who does not have the skills I am prepared to give that person a go. I will take people on and give them those opportunities. I will allow them to get that work ethic learn those skills build that expertise and get involved at the coalface. 
 But what does this bill do? This bill says no. The title actually repeals the exemption so the bill could be called the “Minimum Wage (Repeal of Exemption) Bill”. This bill repeals that opportunity for young people and it repeals the opportunity for employers who make an investment by going out there and taking on these people. 
This Government is anti-business anti-growth and anti-employer. This is just another huge compliance cost along with the Holidays (Four Weeks Annual Leave) Amendment Bill accident compensation levies and occupational safety and health regulations. This is just another anti-business anti-employer piece of legislation. What about the people involved? What about the trainees? They are the people we should be looking after. We have an opportunity to help them and what does this Government do? It takes away that exemption. 
Why would I want to take the risk of giving a young person an opportunity to learn some skills and to get some firsthand experience when this Government is saying that young people have to be given a minimum wage? There is a risk associated with it and part of risk management for people who are in business is to weigh up the pros and the cons. I am prepared to give someone a go; I am prepared to give someone the opportunity but I will not be stifled hamstrung and shackled in terms of what I can do in the long term. That is what the Minimum Wage Amendment Bill is about because it does away with the current exemption to make it an incentive for employers to take people on and to allow them to have opportunities. The bill removes that exemption. It is anti-business and anti-employer. 
As Tony Ryall has recommended the bill should be known as the “Minimum Wage (Repeal of Exemption) Bill”. That fairly reflects articulates and crystallises what this bill is about. If we look at the explanatory note we will see it states that a class of trainees will be exempt from the application of the principal Act. It goes on to state: “Currently trainees who are required in their employment to undertake at least 60 credits of training per year … are exempt from the principal Act.” That is fine. There are about 26000 trainees out there who will be affected by this. I will tell members what will happen if we move in and say there will be a minimum wage: employers will say “I’m not prepared to take the risk. I am not prepared to take these people on. I am prepared to give them a fair go at the moment because I have that opportunity.” 
As the Hon Richard Prebble said there is nothing better than hands-on training—that is where people learn life skills. That is where they get the best training they will ever have. They will not get that from either a training institution or a tertiary institution; it is when they are out there doing what has to be done that they learn life skills. This bill takes away that opportunity from these kids. 
I am concerned about the trainees—I am not worried about the employers because they will just find somebody else. I am concerned that this bill says: “Hey we’re not going to allow you to do this. We are going to make it difficult for you.” As the Hon Tony Ryall has said this bill should be regarded as the “Repeal of the Training Exemption Bill”—that is the true title. There is absolutely no way that this bill will help those 26000 trainees out there because it is anti-business. 
PAUL ADAMS (United Future) 
: 
 I rise to speak on behalf of United Future. I do not want to shock Tony Ryall but we are not supporting this bill and we will be supporting his amendment. 
Training is a very important aspect of all of our lives. Personally I think we are always in training; if we do not continue to train we will not continue to progress. I believe it is important that even a young child should be trained in the correct manner in which to live. We did that with our own children. For example they would get pocket money but they had to work for it. Their mum trained them in how to make their beds then she would give them a list of jobs for the week. Let us say their pocket money was $5; if they did their jobs they got the $5. But if their mum had had to make the bed instead of them then their mum would take the money for making the bed and they would miss out. 
What can often happen with those sorts of things from an employer’s perspective is that people will then start looking for a job that has a larger amount of training than working at a favourable rate and they will go and take that job so that they can get some form of income. Then when it is all over they will leave the poor employer who will have got no benefit from it. We do not support this bill because we believe that training is a privilege. If a person can come alongside somebody and be trained in the skills for life the payment will always follow after that person is trained if he or she is a skilled worker. So United Future is not supporting this bill. We maintain that money should be paid for work rather than for training and we will therefore not be supporting this legislation. 
DARREN HUGHES (NZ Labour—Otaki) 
: 
 I move  
That the question be now put 
. 
JOHN KEY (NZ National—Helensville) 
: 
 Like National speakers who have gone before me I rise to oppose this bill. This is absolutely hopeless legislation. It is another form of inflexibility in the labour market that we are becoming used to on this side of the Committee. Time and time again we see inflexibility driven into the labour market. 
The title of this bill should not be the Minimum Wage Amendment Bill; it should be the “Loss of Jobs For Some of Our Most Vulnerable Young People Bill”. This will attack the 26000 young people who rely on on-the-job training and the goodwill of employers to take them on and give them a chance. Members of this Committee should go and ask those 26000 people what they most want—do they want another dollar or another 50c potentially tacked on to their minimum wage do they want the opportunity to have a job through which they can show their skills and shine and grow into a wonderful career or do they want to go on the dole? The Government is telling us that as a result of this legislation some people will go on the dole. 
Hon Tony Ryall 
: It’s in writing. 
JOHN KEY 
: It is in writing. Is it good for the employers of this country to have a smaller pool of people to choose from and for them maybe to get people who have come from the dole and who have unfortunately had that experience rather than on-the-job training? I say no. Is it good for the young people of New Zealand who are out there excitedly looking for a job and who are prepared to put their nose to the grindstone and work hard? I say no. Is it good for the taxpayers of New Zealand who are having to fork out for the thousands of people who are on the dole under this Labour Government? There are 135000 people on the dole already and that number will be going up as a result of passing this bill whose title we are discussing here tonight. That number will be going up and it is in writing in the commentary. 
This should not be called the Minimum Wage Amendment Bill—that is a ridiculous title for this bill. It should be called the “Loss of Job Opportunities For Vulnerable Young People Bill”. 
Mr Hughes is a young man— 
Hon Tony Ryall 
: Is he on a training rate? 
JOHN KEY 
: Maybe Mr Hughes has pushed this bill through because he is scared that his rate will get dropped down because he is the youngest member of Parliament in this House and all of a sudden the boss—who is over in Paris at the moment—has seen that young members in the European Parliament get paid less. Darren Hughes has gone and spoken to Mr Swain and various other Ministers and said: “Look push through this bill before the boss gets back and all of a sudden my wage is down.” Mr Hughes mixes with a lot of young people. He knows the value of on-the-job training. He is learning his skills and his craft just like those 26000 other people are across the country. 
Hon Richard Prebble 
: He’s got his training wheels on now. 
JOHN KEY 
: He has his training wheels on right now but we hear he is doing a wonderful job and that is the kind of on-the-job feedback that comes through. He and his Government will rob young people of that opportunity. 
Hon Tony Ryall 
: He worked for Judy Keall. He should get double the rate. 
JOHN KEY 
: That probably says it all. This bill will rob those young people of that opportunity. 
I will go back to my earlier point. The young people of New Zealand would like an opportunity to have a job. I know that when I was in commercial practice I had many people who came in and offered to work for nothing. That opportunity to work for nothing was valued far more than whatever the wage was. They did not want to talk about whether there was a minimum wage. They did not care about whether the Minimum Wage Amendment Bill was appropriately titled; they cared about the opportunity to have a job. That was the most important thing because when they went to get another job their future employer looked at their resume to see what their past work had been—not what they had earned not whether the minimum wage had been applied and not whether they had got $5.85 an hour or $5.95 an hour but what experience and opportunities they had had. This bill will rob those young people of that job opportunity. That is a disgrace. Young people are being sent the wrong message when they are told that it is better to go on the dole than to be paid a little bit less. That is how the thinking that the dole is good for this country is indoctrinated. It is not good for this country—working is. 
GEORGINA BEYER (NZ Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
SHANE ARDERN (NZ National—Taranaki - King Country) 
: 
 It is with some pleasure that I rise to oppose the Minimum Wage Amendment Bill and particularly the title which is so misleading. 
There are some things that one learns through life experience that clearly one cannot get from attending all the academic institutions in this country. If ever there was evidence of that it is there in the current Government. The reason Government members are here now in the dead of night trying to ram through legislation that would be much better titled the “Minimum Wage Repeal of Training Exemption Bill” as proposed by the Hon Tony Ryall is that they do not have that life experience. One can have all the PhDs in the world but if one does not have some kind of life experience or a PhD in life experience then one is without any knowledge at all. 
One of the areas where people get that knowledge—and without a doubt this is so in the farming sector—is through on-the-job training. I know that that comes as a surprise to most of those on the Government side because none of them has experienced anything like that. I also know that some members of this Parliament are genuinely concerned about the exploitation of young people in the workforce and for that reason I have some sympathy with where they want to go but the bottom line is that what is being proposed in this legislation—particularly with the title it has been given—will achieve exactly the opposite of what they are trying to achieve. Even more young people will be unemployed and denied the opportunity to go out and earn a living and to be part of a constructive and credible workforce. 
One need look no further than the comments made recently by some major business interests in the country to find that employers will not take the risk—and I know that is absolutely so in the farming industry. I appeal to members opposite and to the Minister in the chair the Hon Paul Swain to take a call and tell me why a farmer with an $80000 tractor a $20000 feed-out wagon and the potential for a $20000 penalty for putting penicillin in the milk by accident or a penalty for allowing stock to wander in a way that they should not—and we have just seen a recent case of bad farming practices and the $200000 fine that went with it—would take on an untrained young person at the minimum wage that is likely to be prescribed by some socialist group based in Wellington. Why would people do that? What incentive is there for them to do that? Clearly people take a lot of risk in taking someone on. At the moment in the farming sector in particular people take that risk: they spend the money they spend the time in training and in some cases they even pay for those young people to go on to further academic and practical training through various institutions in the country because they need those young people to come through. Why would they take that risk if there is a huge financial penalty in doing so? I appeal to the Minister to take a call and tell us why he thinks that to be the case. 
The select committee was told that 26000 young people in New Zealand would be affected by this measure. The judgment call that any Government has to make is whether those people will benefit or whether they will not. The overwhelming evidence is that they will not. So why is the Government here at this point in time proposing a bill that clearly will not have the desired outcome? Why is it that this bill is named the Minimum Wage Amendment Bill when it will clearly achieve the exact opposite of that objective? I hope the Minister will take a call and clear that up for the Committee because I know that a lot of people are curious about that. 
Also I know that a large number of young people out there need some kind of encouragement to get from where they are into meaningful employment. One of the things that encourages young people to go into employment is when people from industry approach them and say: “You look as though you are capable. We’re not willing to take the risk under employment law but if you come and work for us for nothing for a few days or for a week or so on a trial basis we will take that risk and we will give you a go. We will give you that opportunity.” This legislation and its title in particular will stop that from happening. 
JILL PETTIS (Junior Whip—NZ Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 76 
Noes 40 
Motion agreed to. 
Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
The question was put that the following amendment in the name of Hon Tony Ryall to subclause (1) be agreed to: 
to amend subclause (1) by inserting after the words “Minimum Wage” the words “(Repeal of Training Exemption)”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 40 
Noes 76 
Amendment not agreed to. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 76 
Noes 40 
Clause 1 agreed to. 
Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
New Zealand National 26; ACT New Zealand 6; United Future 8 
Clause 2 Commencement 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 The National Party in Opposition will be opposing the commencement date in the Minimum Wage Amendment Bill. We have tabled an amendment that will defer the commencement date until after the election of the next National-led Government in 2005. With a commencement date of 30 November 2005 the next National-led Government will have an opportunity to repeal this bill. The reasons we want to defer the commencement date are set out very clearly in the regulatory impact statement that the Government itself has tabled in this Chamber. People listening on their radios tonight should know— 
The CHAIRPERSON (H V Ross Robertson) 
: The member knows he cannot refer to radios. 
Hon TONY RYALL 
: That is a new ruling is it not? 
The CHAIRPERSON (H V Ross Robertson) 
: Speaker’s ruling 39/1. 
Hon TONY RYALL 
: People who are listening tonight in the gallery will want to know that this bill proposes to remove the exemption whereby up to 26000 young New Zealanders receive on-the-job training and as such get a payment that is lower than the minimum wage. The Government has advised Parliament that the proposed change will have an impact on the Government’s finances which will come from increased benefit payments as a result of job losses over time. The Government has also advised Parliament that there will be a decline in the amount of training provided by employers and that that will have an effect on training and has further advised that that will increase compliance costs for employers and business in general. 
The National Party asks why we would want to deny young New Zealanders the opportunity to have on-the-job training to increase the number of people on the dole to reduce the amount of training in the economy and to make business compliance costs higher than they already are. The National Party asks why we would do that. I think it is clear that this Government is doing it as part of its continual programme of payback to the trade union movement. There is no doubt that this legislation is union-driven promoted by the hard left of the Labour Party. If one looks at the introductory debate we see that the Ministers Margaret Wilson and Laila Harré crowed about this bill. They represent the politically correct spa-pool liberals who make up the Government and they were the people who most promoted this bill. 
This bill is anti-business it is anti-growth and it is anti-training. Why would we want to support legislation that as the Government knows will put young people on the dole? The Government has told us that. It is on page 3 of the explanatory note. Why would we want to support legislation that will lead to a decline in the amount of training in the economy? The Government has told us that. It is on page 4 of the explanatory note and further on on that page is the advice that this legislation will add to the compliance cost for employers. The National Party says that those are compelling arguments made by the Government not to support this legislation. 
The National Party stands very clearly on the side of young people who want to have an opportunity and the chance to get ahead. My colleague Judith Collins will be attempting to take a call to outline to the Committee what the Government will be doing. What it will be doing will be forcing a whole lot of people to stop being lower-paid trainees and to become volunteers. They will become volunteers in the workplace and they will not get any payment at all. They will be on the dole. They will be volunteers in the workplace learning those skills and they will not get paid. That is the point. They will miss the opportunity to get some compensation while they are training because this legislation will drive significant numbers of young people into being volunteers in the workforce—where they will get no payment—and an increased number of people on to the unemployment benefit. What this country needs to lift its growth prospects is a National-led Government and a flexible labour market. 
JIM PETERS (NZ First) 
: 
 I rise on behalf of New Zealand First to support the commencement date as set out in the amendment. Briefly I say with regard to some of the comment that I have heard this evening that I wonder where some people have been for the last decade—particularly those people involved in the agricultural industry. There seems to be a misconception that workers out there in the dairy-farming industry in particular are being exploited. In actual fact the situation is by far the opposite of that. Anybody who is prepared to get out there and handle a cup or jump on a tractor is readily wanted and I assure the Committee is paid far above any minimum wage in order to be able to fill the intense demands of the dairy industry at the present time. It is the same for the meat industry and the wool industry. 
Again I come back to the fact that a balance is required which relates to the opportunity provided by the employer and the educational opportunities and further training that the young person—whether male or female—gets and the end result is a fair and equitable opportunity for those involved. Although I would hesitate to look at perhaps just one industry the land use industry one could also look at the hospitality industry or the supermarkets—that whole area of food servicing—where there is a history in earlier years of the exploitation of young people. Today that has been remedied slightly but in the same way a training opportunity needs to go with a fair job and a consistent and reasonable salary or wage. On behalf of New Zealand First and my colleague the Hon Brian Donnelly who is our party spokesperson on those matters I support the amendment. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I rise to support Mr Ryall’s amendment. I think it is an excellent amendment although I do have a quibble with it which I will raise with Mr Ryall in a moment. 
I also want to express my disappointment—but not surprise—that the New Zealand First Party continues to be economically illiterate. The fact of the matter is that by supporting the paying of minimum wages to trainees that party will limit the number of people who can get training. 
Jim Peters 
: Rubbish! 
Hon RICHARD PREBBLE 
: The member says “Rubbish!”— 
Mark Peck 
: I agree. 
Hon RICHARD PREBBLE 
: —and so does Mr Peck yet they are supporting a bill that states that. If they cared to read the explanatory note of the bill which I ask Mr Peck whether he has read— 
Mark Peck 
: You bet! 
Hon RICHARD PREBBLE 
: He says that he has read it. Does he not agree with the explanatory notes of the bills of the Government that he belongs to? 
Mark Peck 
: I agree with everything in the bill. 
Hon RICHARD PREBBLE 
: There was an incoherent answer to that question but let me draw to the member’s attention that on page 3 the explanatory note states: “The proposed change may have a small adverse impact on the Government’s fiscal position. The fiscal impact would come from increased benefit payments that may occur as a result of potential job losses over time.” That is there in the Government’s own legislation. One could bet that Ministers hated every word of that; that is how far they could get it watered down. I guarantee that if we could see the first draft it would be much harder— 
Shane Ardern 
: Much harder. 
Hon RICHARD PREBBLE 
: Those former ministers know what I am saying. But the Ministers could not get the officials to take that comment out because the officials know that this bill will cost jobs. I say it is a great shame that New Zealand First and the Labour Party back bench are economically illiterate. 
I have a comment and a quibble to make to Mr Ryall who wants to move the commencement date from November 2003 to November 2005. My quibble is twofold. First 2005 is far too soon. But Mr Ryall then says that November 2005 will be after the election of a National Government. The second part of my quibble then is why is he so pessimistic? This is a minority Labour Government. It cannot even handle the power crisis and it has the economy going down the gurgler. I am coming to the commencement date; it is a question of whether that date could be safely made November 2004. This is a minority Government. It is supported by the Greens but at some point they will take a stand over genetic modification and it is also supported by the United Future party but at some point the members of that party will look at the polls and say that they are going down the gurgler with that lot. 
 No MMP Government has lasted for the whole full term. New Zealand First will not save the Government. The member could take a risk and make the commencement date November 2004. I think the Government will last about another year. But when we have a second winter power crisis and people realise that the Government says we have market prices but that the Government actually owns 70 percent of the generators—we do not have enough generators—and owns all of the grid and that this is a Government crisis we could see this Government fall. 
I say while ACT will vote for the National Party’s amendment it is a bit on the pessimistic side. The National Party should be a bit more optimistic. We should be getting ready for the possibility of an early election. I see signs of this Government falling. One of the reasons for that is this bill itself. The reason the Government will fall is that it is economically illiterate. This Government has no idea whether it has done well economically. It has benefited from things it had no control of and now that the economy is going sour on it the Government has no idea what to do about that. If it has then let us hear one idea in terms of what it will do about the power crisis. We have not heard one idea. We heard the Government say on the  
Holmes 
 show that we should wait for some weeks for it to give us an answer. 
John Key 
: They’re in the dark. 
Hon RICHARD PREBBLE 
: Yes the Government is in the dark. The Government itself acknowledges that by passing this bill it will deprive young people of training. November of this year is far too soon to introduce such a harsh measure and November 2005 is still too soon. We will support the amendment. 
LINDSAY TISCH (NZ National—Piako) 
: 
 This is an interesting commencement date. When we read the bill we see that it was to have come into effect on 30 November 2001. The points that have been made this evening have shown that the Government is anti-business. It is anti-investment and it has no idea of what it is to run a business. In fact 85 percent of all businesses in New Zealand are small businesses employing less than five people. 
When an employer takes somebody on at the end of the day there has to be a reward. I raise a point of order Mr Chairman. A member on the Government side of the Chamber is using a cellphone. 
The CHAIRPERSON (H V Ross Robertson) 
: The use of cellphones in the Chamber is not permitted. I have been assured that the cellphone is not being used in the Chamber. The word of all members here is accepted unreservedly; their word is their bond. 
LINDSAY TISCH 
: I raise a point of order Mr Chairperson. The person whom you are referring to is not the person I was referring to. The person— 
Jill Pettis 
: Stop wasting time! 
LINDSAY TISCH 
: The member says that we are wasting time. It is a very important precedent that members do not use cellphones in the Chamber. I have brought that to the attention of the Chairman. If the member would like to stand and apologise then I will accept that. It is not me who is wasting time; it is the member who has been using the cellphone who is wasting time. I have asked for a ruling and have suggested that an easy way out is for the member who was on the cellphone— 
Hon Richard Prebble 
: How about naming the member? It will make things a lot easier for everyone. 
LINDSAY TISCH 
: It was Steve Chadwick who is sitting in the front row. If she would like to stand and apologise for using the cellphone we can then get on with this very important bill. 
The CHAIRPERSON (H V Ross Robertson) 
: If the member used a cellphone in the Chamber that is unacceptable. The member will stand withdraw and apologise if that was the case. 
Steve Chadwick 
: I withdraw and apologise. 
LINDSAY TISCH 
: The point I was making was that if I am prepared to employ somebody—and it will cost me money to employ that person—then there has to be a return. I would expect that the return that I will get from that person’s contribution to my business is that he or she has to pay his or her way. That is just the basis of employing people. This Government expects that every time I want to employ people they will think I will exploit them. I have never paid minimum wages to the staff whom I have employed over the years. I have always paid them more than the minimum because they have been worth more than that. 
At the moment people will take staff on and give them a go but they expect a return on that investment—that is if they are employing people for whatever the figure is per hour those people will need to contribute. Employers are prepared to put in the time and the training. However under this bill that initiative will be taken away. There are young people who are prepared to go and knock on doors and to ask employers for a job. Employers have said they are prepared to give them a go because they have shown some initiative. This bill states that people cannot do that because if they do they will be exploited. But if employers want to have people working for them and to get the best return from them they will look after their staff. 
This bill takes that away. The tenure of this bill simply states to young people who are out there looking for a job that if they go when there is no protection for them through minimum wages when employers have a training budget and put effort in and to spend time with them— 
Jill Pettis 
: This member hasn’t mentioned the commencement date once. 
LINDSAY TISCH 
: I mentioned the commencement date right at the beginning of my speech. If the member did not interrupt so often she would actually hear what I was saying. The member does not understand the basis of business. That is the trouble with this Government: it has no idea what makes the world go round. Government members have never been in business themselves they have never invested a dollar and they have no idea— 
Jill Pettis 
: That’s totally incorrect. 
LINDSAY TISCH 
: That member has never employed anyone. Government members have absolutely no idea of the costs—of what is involved in employing staff. [ 
Interruption 
] 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the honourable member. I refer members on my right to Speakers’ ruling 51/5. If those members want to make a speech they can take the call next time and do so. 
LINDSAY TISCH 
: I would appreciate them taking a call. I would like the Minister to take a call as well. It seems to me that every time people want to go for a job they need protection because otherwise the view of this Government and its members is that every time people go for a job they will be exploited. That is what the bill states. The Government does not allow for the initiative of young people seeking to have a go. 
That is why it is so very important that the commencement date as the Hon Tony Ryall has mentioned should be after the next election. That will allow those trainees who are out there now to appreciate and be able to show exactly what is involved in obtaining a job and to show how the current system works. What is happening today is that employers are not prepared to take anybody on because it will become too difficult. We have the Holidays Act the 4 weeks’ holiday amendment bill paid parental leave and the Resource Management Act. People will say they are not prepared to take on a young person. They will ask why they should carry all the risk all the time. Employers will contract work out. There is huge demand out there now and people are saying they will not give young people a chance by taking them on. Employers are saying they are not prepared to train young people because once they have taken them on they will have to meet these compliance costs. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I move  
That the question be now put 
. 
JUDITH COLLINS (NZ National—Clevedon) 
: 
 The commencement date of 2001 in this bill has already passed. That is just another example of a date that is completely out of date and a bill that is completely out of date. As my colleague Mr Lindsay Tisch has said not all employers are exploiters. In fact one would hardly ever find an employer who is an exploiter these days; the situation is quite the opposite of that. 
One of the interesting things with this bill is the date and I would like to speak now to the amendment that the Hon Tony Ryall has put up. I disagree with him because I think we will just give this legislation another few months after we win the next election on 30 November 2005. I disagree with a commencement date in November 2005. I have already checked this with my colleague the Hon Tony Ryall and he is happy with my suggestion that we move the commencement date to 1 April 2006. 
The reason for that is that we will have so much legislation to repeal. I do take Richard Prebble’s point about that. We have to accept Richard that we will have to do that. 
The CHAIRPERSON (H V Ross Robertson) 
: The member must not refer to a person by his or her Christian name. 
JUDITH COLLINS 
: We will have so much legislation to repeal that I think the commencement of this legislation will have to wait until 1 April 2006. Now why would we want to do that? For a start as has been pointed out we have the official record that states that the costs will be too high and there will be a decline in the amount of training provided by employers. We will have to tell employees who need training that they might not have a job. 
It is very interesting on looking at a bill like this to see just how much consultation has taken place. Maybe more time is needed for consultation. The consultation has been with the Ministry of Economic Development the Ministry of Education the Ministry of Pacific Island Affairs the Ministry of Women’s Affairs the Ministry of Youth Affairs Skill New Zealand Te Puni Kokiri and Treasury. Well I do not think any of those agencies are employers. Not one of those agencies has ever mortgaged its house put its house on the line to go and set up a business— 
Shane Ardern 
: Gone broke! 
JUDITH COLLINS 
: It is true that not one of them has ever done that. I raise a point of order Mr Chairman. My understanding is that a running commentary of interjections is disorderly. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Yes I refer members to Speaker’s ruling 51/5(3). I have already referred the Government member on my right to it. I now refer the member to Standing Order 85. That member has her first yellow card. 
JUDITH COLLINS 
: So we have a situation where there has been insufficient consultation. Not one of the agencies consulted with has ever been or actually is an employer. They are all Government agencies. 
Jill Pettis 
: And councils! 
JUDITH COLLINS 
: I raise a point of order Mr Chairperson. The member on the Government side of the Chamber is continuing with the objections obviously contrary to your advice. I think that is disorderly. 
The CHAIRPERSON (H V Ross Robertson) 
: If the member was doing that the member will stand withdraw and apologise. 
Mark Peck 
: I withdraw and apologise. 
JUDITH COLLINS 
: It was not that member Mr Chairperson. 
The CHAIRPERSON (H V Ross Robertson) 
: Will the member stand withdraw and apologise. 
Mark Peck 
: I stand withdraw and apologise. 
Jill Pettis 
: I stand withdraw and apologise. 
The CHAIRPERSON (H V Ross Robertson) 
: Would Mr Peck please be seated. Jill Pettis— 
Jill Pettis 
: I did stand withdraw and apologise. 
JUDITH COLLINS 
: So there really has not been enough time for any consultation with employers. I would like to know whether anyone has actually asked for the views of any of the freezing works or of any of the lawyers who as Richard Prebble has very very carefully advised take on a lot of people to receive training in their offices. Who has actually asked anybody—anyone who actually employs people—for a bit of consultation? In fact no one has even consulted with the youth whom we are talking about—the people actually receiving the training. That is one of the points. The date that we are talking about in the bill will not be possible because it has already passed for a start. Secondly I say there has not been enough consultation with anyone whose job is probably on the line. 
One of the points I would like to raise—and I would like to hear from the Minister on this—is whether the Minister has considered the effect of this legislation on volunteers. One of the things that will happen is that a prospective employee will be told the employer does not want him or her as an employee because the employer cannot afford to pay the employee while he or she is training with the employer but that he or she will be taken on as a volunteer. And that is the point: this bill does not protect volunteers. The people who are currently receiving some money while they are training with an employer will turn into volunteers—unpaid workers who will be on the dole or on some sort of training allowance. That is what will happen. The very people who have had jobs even if they were not very well paid but who have done that because they were being trained will have to lose those jobs become volunteers and add to the dole list. In fact any smart employer and any smart person wanting to be trained will get around this legislation. 
SHANE ARDERN (NZ National—Taranaki - King Country) 
: 
 I rise to speak on the commencement date of this bill and I think it is probably time that somebody pointed out to the Committee that despite the fact that the Prime Minister the Rt Hon Helen Clark can have a view on major international events I do not think she has the ability yet to put in place legislation—which we are debating in the Committee here today on 29 April—that has a commencement date of 30 November 2001. I see there is a Supplementary Order Paper and I think that that is absolutely why the public of New Zealand need to know what it is that they have governing this country at the moment. The commencement date of this bill has well and truly passed and we have Supplementary Order Paper 245 to amend that date to a time that hopefully the Government might be able to achieve. That Supplementary Order Paper states “the day after the date on which this Act receives the Royal assent” which could be anywhere in the never-never—who knows? 
My colleague has put a date on this legislation of 2005 and another member has amended that to 2006. I think that is sensible because at least people will have some indication of when this bill might become law even though most people will be opposing it. They will at least have some idea of when it might come into law. 
But this bill demonstrates to the Committee today that we have a Government that introduces great socialist ideas and goes out and puts up a kite to find out what the public polls are saying. During the knowledge wave conference in Auckland Labour members sampled the business sector to see what it was saying. They found out that the business sector was not very happy with where the Government was going so they buried this legislation somewhere on the Order Paper and forgot about it. Then in the middle of the night when they did not think anybody would be taking any notice—and certainly nobody is listening on the crystal sets in Taranaki - King Country or on the cowshed communication systems at the moment—they try to rush this bill through with a commencement date of 2001 and with Supplementary Order Paper 245 to amend that to the never-never—until it receives the royal assent. This is legislation that politically the Minister in the chair knows will sink like a lead balloon. 
We have here a Government that goes out to the business sector and pretends to be friendly to know what people want and to know what will generate growth in the economy. It talks the talk but comes back to the Parliament here and returns to its true natural socialist roots which we have all known it would eventually do. We have all known the Government would have to do that; it could not keep up the facade for very long. Eventually the Government would have to come home to its roots; that is what always happens. Here we have a bill with a commencement date of 30 November 2001 which is long gone and with a Supplementary Order Paper to state that the bill will come into force when it receives the royal assent. 
The National Opposition opposes this bill and is recommending amendments. We are recommending amendments to the commencement date. The Hon Tony Ryall has put forward an amendment that will change that date from 30 November 2001—and I am sure the Minister will be happy with that because even the honourable Minister will have trouble getting this legislation in place by 2001—to 30 November 2005. 
 The reason for that is very obvious to those who are taking an interest in this bill tonight and who are listening in to this debate on various mechanisms. It is because that date will be after the next election and there will be a change of Government. Most of those people know that the new Government will repeal this legislation. There will be a flood of repeals as has been mentioned before. But so be it; that is what happens. There will be a new Government this silly legislation will be kicked into touch and the new Government will be able to bring in sensible legislation that will allow the 26000 young people whom we are speaking of here—that is quite a substantial figure—to go through what has been a traditional pathway to a successful career that is hands-on workforce training. 
JILL PETTIS (Junior Whip—NZ Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 82 
Noes 32 
Motion agreed to. 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
New Zealand National 26; ACT New Zealand 6. 
The question was put that the amendment set out on Supplementary Order Paper 245 in the name of the Hon Margaret Wilson to clause 2 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 74 
Noes 40 
Amendment agreed to. 
Labour 52; New Zealand First 13; Green Party 9. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
The CHAIRPERSON (H V Ross Robertson) 
: The amendments in the names of the Hon Tony Ryall and of Judith Collins and Shane Ardern to clause 2 are out of order as they are inconsistent with the previous decision just taken. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 2 be agreed to: 
to add the following subclause: 
(2)Notwithstanding any order made under subsection (1) no minimum rates of wages will apply to classes of workers who are employed under contracts of service under which they are required to undergo training instruction or examination for the purpose of becoming qualified for the occupation to which their contract of service relates. 
A party votewas called for on the question  
That the amendment be agreed to. 
Ayes 32 
Noes 82 
Amendment not agreed to. 
New Zealand National 26; ACT New Zealand 6. 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
A party vote was called for on the question  
That clause 2 as amended be agreed to. 
Ayes 74 
Clause 2 as amended by Supplementary Order Paper 245 agreed to. 
Noes 40 
Clause 2 as amended by Supplementary Order Paper 245 agreed to. 
Labour 52; New Zealand First 13; Green Party 9. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
Clause 3 Prescription of minimum wages 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 I want to state very clearly that the National Party in Opposition is strongly opposed to clause 3 and to this bill. Clause 3 is the operative feature of the bill which will enable the Government to overrule employment and training contracts entered into by 26000 young people and enforce a new minimum wage on those undertaking training. The National Party is opposed to that and we base our case on other documents than the explanatory notes to this bill. The test for this bill is what will it do to training in New Zealand what will it do for opportunities for young New Zealanders and what will it do to business compliance costs? 
Let us check each of those three features off using the advice that the Government itself has provided to Parliament. The Government has told us that this bill will cost jobs. It has advised us that there will be an increase in benefit payments as young people currently in training go on the dole. It has mentioned that itself in its own explanatory note so it has failed that test—this bill will cost jobs and put kids on the dole. The next issue is what the bill does for business compliance costs. The Government itself says there will be increases in ongoing compliance costs as a result of this legislation so it fails that section as well. The third test is what the bill will do to the amount of training provided by employers in the New Zealand economy and the advice here is that there will be a reduction in the overall level of employment-based training in New Zealand. 
Three strikes—this bill should be out! It should be out because it will cost young New Zealanders their jobs; it is anti-business anti-training and anti the growth this country needs. My colleague Mr Shane Ardern the MP for Taranaki-King Country and I have moved amendments that will limit the power provided by clause 3 to allow this Government to set minimum wages and remove the trainee exemption for young people. I am asking the other parties in this Chamber to consider supporting those amendments because we should be able to neuter the part of the bill that will cause the problem—that will cost young people their training opportunities and add business compliance costs. 
The problem with this Government is that it does not realise that to get a high-performing growing economy in this country we have to back the productive sector. We have to back the people who are creating the jobs and the wealth this country needs. The one thing we do not need to do to those people is tie them up with added bureaucracy complexity and inflexible labour laws and training rules—and that is what this bill does. 
The National Party in Opposition wants to be very clear with the Government: we will oppose this bill vociferously through its continuing stages in the House and it will be repealed with the change of Government. When we get rid of this two-term left-wing minority Labour Government and have a Government that is prepared to back the productive sector and have pride in and support the New Zealand business community this bill will go. We know from the Government’s own advice—and I notice the junior Minister from the Hutt Valley taking notes of this—that this bill will cost jobs. It will put people on the dole and it will add to compliance costs. A lot of the people affected will be Maori and that will open the gaps not close them. Nanaia Mahuta should take a call to tell us why Maori should support other Maori losing their training opportunities. They should not do it and that is why we urge them not to support this bill. 
Hon PAUL SWAIN (Associate Minister for Economic Development) 
: 
 Methinks the Opposition doth protest too much. Basically it is the old whinge whine grizzle and groan. What happened when the Government adjusted the adult minimum wage? We heard that it would be the end of civilisation as we know it and that dole queues would increase. What actually happened? Unemployment went down. Then the Government adjusted the youth minimum wage. Again we heard that it would mean the end of civilisation and increase the dole queues. What happened? Again the dole queues went down—to their lowest level in decades. The reason was that a progressive Government was working in partnership with business to ensure that people’s potential was realised. 
This bill says that those aged between 16 and 17 who are doing more than 60 credits or more for a recognised training programme will be able to receive the official youth minimum rate which stands at $6.80 per hour. Those members on the other side of the Chamber are saying that the 16 or 17-year-old who goes into training and does 60 credits should get less than the person who is going out and doing an ordinary old job. That argument is totally fatuous and anti-training. Those members are anti-growth and anti-business. 
This bill will lead to the improvement of skills training in this country which is what we need. Those members opposite abolished the apprenticeships system. The single biggest thing this Government has done for the Labour market is to reintroduce the apprenticeship system whereas the previous National Government abolished apprenticeships. This bill will lead to important advantages in training. We have heard it all before from the Opposition—the crocodile tears the whingeing the whining the wailing about the increase in the dole queues. What we have seen is the reverse. This is an example of a good Government doing another good thing for the progress and development of the New Zealand economy. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I must take issue with one of the comments the Minister made about how this Government has created a new apprenticeship system. As the Minister well knows the training and qualifications of people under the Modern Apprenticeships scheme are exactly the same as under the Industry Training Act. There is no difference whatsoever. Nevertheless that is not what I am here to talk about. I came down to the Chamber to take a call because having listened to some of the speeches made in the debate on the first two clauses it is pretty obvious that people are not very clear what this bill actually does. In fact prior to this legislation there was an exemption. 
Richard Prebble claims that New Zealand First is economically illiterate. The theory he espouses has already been tried in 19th century Europe Britain and elsewhere. The effects were clearly chronicled by Charles Dickens Benjamin Disraeli Elizabeth Gaskell and all of those sorts of people. Every responsible Government should set minimum standards against the exploitation of workers and National recognises that. The National Government set a minimum wage and had it all through the 1990s. However there was a loophole that affected people on training agreements. I am not talking about training such as Mr Tisch provided for his workers but about formal training agreements under industry training organisations. Under those agreements there was no minimum wage but the record shows that most employers did not exploit their workers under those circumstances. They paid them minimum wages or even more. But a small proportion of employers did exploit their workers and was no protection for them in that circumstance. This bill provides that protection. It is not for 16 and 17-year-olds; it is for all people who are in training agreements and aiming for 60 or more credits. 
I see Jill Pettis making funny gesticulations across the Chamber. It is probably better that she uses sign language than yells out so I am quite happy for her to do that. The point is that this bill clearly recognises that there is a cost to employers in allowing people off for that training. They are therefore not required to pay the minimum wage they would pay to an adult. They are required to pay a lesser minimum wage in recognition of the fact that there is a training component in the employment they offer. However there is at least a minimum rate to ensure that workers are not exploited. A small number of employers had been doing that in the absence of any mechanism to ensure that it did not happen. 
Hon Richard Prebble 
: Name one! 
Hon BRIAN DONNELLY 
: There was plenty of information about it but once again I say that it was the exception rather than the rule. New Zealand First agrees with this measure because it at least provides minimum protection for those who are caught in that loophole. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I rise on behalf of the ACT party—partly to respond to the remarks just made by Brian Donnelly of New Zealand First but also to say that ACT will vote to support the Hon Tony Ryall’s amendments. I think the case he has made against this bill is a very good one. 
My colleague from New Zealand First said I had accused his party of being economically illiterate. He then cited two sources to support his economic arguments. The first was Charles Dickens. I hate to be the first to break it to the member but Charles Dickens was a novelist and Oliver Twist is not a true story. 
Hon Member 
: Isn’t it? 
Hon RICHARD PREBBLE 
: No! Shock horror!—it is not a true story. The member’s next source as an economist was Benjamin Disraeli. I hate to break this to him as well but Benjamin Disraeli was a Tory and he never ever voted for a minimum wage bill. It just shows how much difficulty we have when New Zealand First has as economists a novelist and a Tory Prime Minister. I say to the member that the evidence is overwhelming and that a great deal of research has been done on this matter. 
I heard the Minister imply that the fall in unemployment numbers was because his Government had lifted the minimum wage. If Government members opposite really think that why do they not lift it further? If they really think that lifting the minimum wage has resulted in more employment why are they stopping at the level they are? Even the Minister in the chair Mr Swain does not believe that. When he reads his own bill—and presumably he has not put a false document in front of us—he knows that his own officials have said that the effect of this bill will be to destroy jobs and training opportunities. 
I also make this point to the member: yes we can say that dole numbers have fallen but if we then look at the total number of able-bodied adults on benefits we find that that figure is going up. We have disguised unemployment occurring under a Labour Government. The Minister shakes his head. It is a great shame that Ministers do not know that and have to rely on the ACT party to tell them. If we look at the sickness beneficiary figures I would have to say to the Minister that the severe acute respiratory syndrome (Sars) has already reached New Zealand. Alternatively we need another explanation of why people are becoming more and more ill under a Labour Government. Of course it is disguised unemployment! 
I want to point out to members opposite that clause 3 is a measure of a centrally planned economy. It states: “The Governor-General may by Order in Council prescribe the minimum rates of wages payable …” and then follows a series of classes. That is a centrally controlled economy. We are having a group of Ministers sitting in the Beehive and deciding how much money people will be paid. That is the measure that this Government is putting forward. 
Then we have New Zealand First members saying to us that a small number of employers are exploiting their workers. Well we have free speech. I have asked Mr Donnelly to get up and name these scoundrels. Members opposite should let us know who they are. No they are not prepared to do that because they have not found any. They are making it up because it sounds a good thing to say: “Oh most employers are good but there are some scoundrels.” Well who are they? They are very odd scoundrels are they not? According to this bill they are actually providing young people with training opportunities and yet some members say they are exploiting young people. 
If we are going to pay a wage to people who are training then why is the Government not extending that payment to university and polytechnic students? Why are Government members not saying that those students are being exploited? They are not getting paid. Why is the Government applying a double standard? 
JOHN KEY (NZ National—Helensville) 
: 
 I rise on behalf of the National Party to oppose this bill in particular clause 3. This bill makes a mockery of the saying “good things come in small packages.” because it contains less than 200 words yet all of them are bad. The bill is anti-business anti-growth and not good for New Zealand. Mr Swain the Minister who was in the chair earlier took a call. He was as misguided as the very bill itself. The Minister told the House that the bill would lead to an increase in employment and training. That is what he told us. He was on his feet—the only time he has been in this entire debate—and he proclaimed to the House that the bill would lead to an increase in employment and training. I have this message for the Minister. He should read the advice his Government had from his own officials because that advice does not say that the bill will lead to an increase in employment and training. It does not say that it will build on the 26500 young people in New Zealand who will be affected by this bill. It does not say that it will add to making this a more employer and employee-friendly market. It says there will be a fiscal cost to this legislation and the Government will have to pay out more on the dole. 
Hon Rick Barker 
: Rubbish! 
JOHN KEY 
: Well that is what the legislation says. The Minister should read it. It says exactly that in the explanatory note—that the fiscal position of the Government will deteriorate as a result of passing this bill. The Ministers are reading it for the first time. The explanatory note states: “The proposed change may have a small adverse impact on the Government’s fiscal position. The fiscal impact would come from increased benefit payments …”. That is not what the Minister told us when he took a call. The Minister—the former Minister of Commerce—told us— 
Hon Tony Ryall 
: Junior Minister from the Hutt Valley. 
JOHN KEY 
: The “junior Minister from the Hutt Valley” told us that this bill would lead to an increase in employment and training. That is just not right. That is not what the officials have told the Minister. That is not what the officials are telling us in their own document in the Chamber tonight. The Minister told us that when they put a minimum adult rate into the provision that somehow managed to help the economy. I hate to break it to the Minister but I will tell him what has made the economy stronger over the last 3 or 4 years. It has not been the minimum adult wage and it will not be the minimum wages inflicted on employers across the country because of this bill. It is for three reasons: the lower Kiwi dollar higher global commodity prices and good weather down on the farm. If the Government has not actually noticed a number of those factors have reversed and—guess what—the Minister of Finance is going around the country telling people that the picture is bleak going forward. 
Hon Richard Prebble 
: He has no idea how to fix it. 
JOHN KEY 
: He has no idea what to do about it. He did not even want to pass the Minimum Wage Amendment Bill because if members have a look at the commencement date they will see that it was 2001. The bill is 200 words and we have had to wait 2 years past the commencement date to even get it somewhere near the House. That is how good for New Zealand businesses it is! 
This is a Government that cannot define when our economy will go back into the top half of the OECD. It cannot tell us even though it told us for a while that it would be in the next decade. But it has reneged on that little promise. It cannot define when our country will be back up there at a civilised standard for all New Zealanders. The Government cannot define that but it can define a minimum wage because it is so misguided in its economic policy that it thinks this bill will somehow take it to the land of milk and honey. 
Well this is not the future for the young people of New Zealand who rely on a vibrant economy and a flexible labour market. Relying on this Government to provide a labour market that will give them opportunities are 26500 young New Zealanders—much to their peril. As a result of this bill they are losers because by this Government’s own advice from its officials some of those people will lose their jobs. If we go around and ask them what they would rather have—the job opportunity at any rate and the opportunity to grow a career and show their skills and merit or the opportunity to be guaranteed to earn $6.80 an hour—I think that they will take the opportunity to work over the opportunity to earn $6.80 any day. If we look at the legislation at clause 3 and at what it is telling the Committee— 
JILL PETTIS (Junior Whip—NZ Labour) 
: 
 I move  
That the question be now put 
. 
LINDSAY TISCH (NZ National—Piako) 
: 
 It is interesting that the Government has not decided to take a call on such important legislation. Members know that it is businesses that create jobs. It is businesses that create wealth and growth in the economy. That is where employment comes from. I would have thought that this Government—which says it is business-friendly but in fact is anti-business anti-employer and anti-anything that we actually get growth from—would have stood up in support of this legislation. As my colleagues have said tonight this bill will allow by Order in Council a change to the minimum wage conditions of employees. That is what it says. The explanatory note goes further to state—and this is the point that John Key and Tony Ryall have made and I want to read it out because the Minister when in the chair seemed to refute the fact that it would happen—“The proposed change may have a small adverse impact on the Government’s fiscal position—” 
Hon Rick Barker 
: “May”! 
LINDSAY TISCH 
: This is what it says; I am reading it word for word. The member cannot say “No.” I am reading what it says. 
Hon Rick Barker 
: It says “may”. 
LINDSAY TISCH 
: I tell the Minister I am reading what the officials have got here. It then goes on to say—and members should take note of this because this is important; I have underlined it in my notes because that is how important it is—“The fiscal impact would come from increased benefit payments that may occur as a result of potential job losses over time. It is therefore unclear what the overall fiscal impact would be.” Simply what this bill will do is move people away from training opportunities and they will go on to unemployment queues— 
Hon Tony Ryall 
: Scrap heaps! 
LINDSAY TISCH 
: —on to scrap heaps. They will be left. There is no place for initiative. We have young people out there who are prepared to have a go. They are prepared to knock on the doors and employers are prepared to give them a go. They will say “Yes—” 
Hon Tony Ryall 
: You’ve done it. 
LINDSAY TISCH 
: They have done it. I have done it myself. I have been prepared to give people a go. At the end of the day though there must be a cost benefit to this so I am prepared to give people a go just as are hundreds of other employers around the country. There are 250000 small business employers out there employing fewer than 5 people. That is where the market is. They are prepared to give young people a go. But the important thing is that if I am going to take somebody on there has to be a return. I am making an investment in those people. I am prepared to put them through a training course. For example if I am a retailer I may put them on a Kiwi Host course so that they understand what customer service is about in the business. I am prepared to give them those opportunities; at the same time I know that that investment in their future will pay off and I will be able to recoup that because they will be able to add value to the business and make my business grow. Unfortunately this bill does not do that at all. It is anti those opportunities to take on people. 
Who would want to take on staff in this current environment? I have mentioned before in previous debates that with compliance costs that businesses are having to face today there is no incentive. We are now seeing so many businesses that are retrenching. Business confidence in the latest surveys is at a 15-year low. Look at what was on television tonight with power prices. Goodness gracious who wants to be in business when we have a Government that does not understand the basis of doing business does not understand where the wealth comes from where the growth comes from and at the same time it wants to bring in those minimum conditions that are anti-business anti-employers and anti - young people? The worst part is that young people are affected by this legislation. It is those 26000 young people who are looking to us for an opportunity to give them a start. Those are the ones that will be on the scrap heap. Those are the ones that we should be nurturing and looking after because they are the future. 
The bill states—and the Minister disagreed with that—that it will increase benefit payments and the fiscal impact will come from increased benefit payments. If that means more people will go on a benefit then there is something radically wrong with legislation that allows that to happen to our young folk. National will not be supporting this bill. 
HELEN DUNCAN (NZ Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 84 
Noes 32 
Motion agreed to. 
Labour 52; New Zealand First 13; Green Party 9 United Future 8 Progressive 2. 
New Zealand National 26; ACT New Zealand 6. 
The question was put that the following amendment in the name of Shane Ardern to clause 3 be agreed to: 
to amend new section 4(1) by omitting the words after the word “payable” and substituting the words “to workers defined in order of reference to the age of workers excluding those undergoing training or instruction”. 
A party vote was called for on the question That 
the amendment be agreed to. 
Ayes 40 
Noes 76 
Amendment not agreed to. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 3 be agreed to: 
to amend new section 4(1) by omitting paragraph (b).  
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 40 
Noes 76 
Amendment not agreed to. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 76 
Noes 40 
Clause 3 agreed to. 
Labour 52; New Zealand First 13; Green Party 9 Progressive 2. 
National 26; ACT New Zealand 6; United Future 8. 
Clause 4Workers to whom Act does not apply 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 The National Party in Opposition is strongly opposed to the proposals in clause 4 as we are opposed to this bill in general. The Minimum Wage Amendment Bill will remove the exemption that young people on training have from the youth minimum wage. The reason that they are exempted is that part of their remuneration is the training they are receiving from their employers. The Government’s own advisers and in turn the Government itself have advised the Parliament through the explanatory note to the bill that there will be an impact on the Government’s finances as a result of this bill by dint of the fact that a number of young people will lose their jobs and move on to the unemployment benefit. The Government has further advised that the amount of training that will be provided by employers in the economy will reduce and we have been advised further that there will be added compliance costs. 
Clause 4 removes those previous categories of workers to whom the Act did not apply. In the past the minimum wage never applied to apprentices who were employed under the Apprenticeship Act. It never applied to people who were being employed as apprentices under the Maori Housing Amendment Act under the Railways Corporation the Defence Act the Post Office or the State services nor to anybody else who was under a contract for training instruction or examination or to the inmates of any charitable institution. With this bill we are removing all those exemptions. The National Party says that this will cost young people their jobs. We know that about 26000 young New Zealanders are affected by those agreements and the concern the National Party Opposition has is that not only will we cost a number of young people their jobs we will also deny the opportunity for more young people to enter into those sorts of training contracts. 
 We think this is symptomatic of the fact that this is a Government that does not understand business and does not appreciate the pressures on those running business; nor does it appreciate what drives job growth in the economy. What drives job growth in the economy is flexible labour markets and strong consumer demand lower interest rates and lower taxes. Those are the prescriptions that the economic recovery that we saw in the country in the early 2000s has been based on. It has been based on sound economic policies that were put in place by the previous Government and this Government has to realise that bit by bit it has been unpicking the formula that has been delivering the goods for this economy. 
I say to this Government that there is always a time lag with economic policy and legislation and the costs of the decisions that this Government has made tying up the labour market with added flexibility and setting much higher minimum wages than is necessary will be visited upon the economy over the next 3 or 4 years. There is always a time lag and the costs will be visited upon the economy in the next 3 or 4 years. It will be the responsibility of the incoming National Government to tidy up the mess that this Government is giving New Zealand by simply hamstringing the New Zealand economy the producers the people whom we rely on to generate wealth in this country. 
This Government is undermining every opportunity for that and it is undermining the opportunity for young people to get jobs. We know that that is the truth because the Government has told us that in its own explanatory note on the bill and that is why the National Party has strongly opposed this bill from day one. We know that it will cost jobs. A number of those 26000 young New Zealanders will lose their jobs as a result of this bill and we know that because the Government has told us. The Government has told us that some of those 26000 young New Zealanders will lose their jobs and go on the dole. This Government has told us that more young people will lose that opportunity 
JIM PETERS (NZ First) 
: 
 On behalf of New Zealand First I rise to support clause 4. Firstly it is consistent with the thrust and intention of the other clauses in the bill. Secondly as one who has recently come from employment and recently been involved in a number of both industry training organisations and other training opportunities I say to my colleagues on my right that this is not the opportunity this is not the right way to conduct the economic debates that they intend to conduct or are conducting. This is a sane sensible equitable way of giving balance both to the employer and to the employee in the training sense. We support this clause. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I say to Mr Peters as kindly as I can that both he and Mr Donnelly have come out of the education sector. They make the mistake of thinking that because they have been in educational training organisations they therefore know the situation that exists with regard to employers. I say to Mr Peters that the Government is making a very grave mistake in picking on 26000 out of the 250000-odd people who are in training and saying that because this particular group is employed in the private sector they are going to have their wages fixed by the Government but the Government does not of course apply that to those people who are in the training organisations that Mr Peters used to have some experience of. 
Then when we look at this particular clause I think the Government is making a mistake in removing section 9(c). For those who have not bothered to have a look at it clause 4 states: “Section 9 of the principal Act is amended by repealing paragraph (c).” What does paragraph (c) state? It states: “Persons of any class prescribed by regulations under this Act who are employed under contracts of service under which they are required to undergo any training instruction or examination for the purpose of becoming qualified for the occupation to which the contract of service relates:”. 
Even if the Government wants to be able to apply some minimum wages to certain people in training it is making a mistake to take away the ability to have certain classes of people still being prescribed by regulation as not being covered by the minimum wage. There could well be some classes that the Government would like to exempt. I would be interested to know from the member. Is it intended to apply this to lawyers? I gave the example that lawyers at the moment have a longstanding tradition—I do not know how far back it goes but it probably runs back hundreds of years. If one wants to be a barrister one is trained as a pupil. Are they going to be prescribed or not? If they are not why do we not at least keep that ability? I have never heard of any young barrister complaining about the situation. It is just a reality that one works one’s way through. I think that clause 4 is not needed. 
The Government should still be able to keep the power by regulation even if it wants to have its centralised Government-knows-best approach. Why remove section 9(c) of the principal Act which enables the Government to decide to exempt by regulation any class of training people from being included within the minimum wage? I think the Government has done it as a drafting point. I do not think it is required. If the Minister thinks it through there is absolutely no reason we could not keep section 9(c). 
Why is the ACT party taking this view? We do it because as the Government’s own advisers have told the House this bill will cost young people their opportunity to get training. Mr Ryall is absolutely right. Who are those young people who are going to lose out? It is the very people whom Labour says it supports. Young Maori are going to miss out; young Pacific Islanders are going to miss out. It will be those people who have the most difficulty even getting into training and they will be the first out. 
But of course the Labour Party and its trade union mates have made many many speeches saying that they are in favour of full employment and are in favour of extending justice but in fact when it comes to the crunch they have always been in favour of the closed shop they have always been in favour of privilege and they do not extend those opportunities. It is one of the great shames that when we look at it the Government’s performance in education and in training is worse when it comes to Maori. Why Maori support this Government is beyond me. The Government cannot even produce any evidence that it is closing the gaps. I say that this clause is going to work against the very people whom the Government says it supports. That is not just my opinion. It cannot be dismissed by members opposite. 
JOHN KEY (NZ National—Helensville) 
: 
 I rise on behalf of National to continue to oppose this hapless legislation. Clause 4 talks about the people in this country to whom employers will apply a minimum wage. They are young people 16 and 17-year-olds who are in apprenticeship schemes across the country. 
Why is the Labour Government pushing through this legislation? It is not because it is right to do so; the Government’s own advisers have told the Government that this legislation is wrong. The Government’s own advisers have told the Government that this legislation will lead to a reduction in employment for very young New Zealanders. The Government’s own advisers have told it this legislation will fiscally cost it more money. So Government members are not enacting this legislation because it is right. They are not doing it because they have a lot of evidence that one day this legislation may be right. At the Transport and Industrial Relations Committee the officials could not actually produce a lot of evidence because they had not done a lot of empirical research on what the results of this legislation would be. They just knew it would be wrong. That is why they wrote that up in the commentary on the bill—they just knew that fundamentally it would add to unemployment and add to the Government’s fiscal costs. So Government members did not proceed with this legislation because they knew it was right. They did it and they are doing it for one reason alone: they hold an ideological view that this legislation will be right. 
Well I have a message for the Labour Government: it should go back and look to see when the number of people on apprenticeships started rising in this country. It was in 1992 when the Employment Contracts Act was passed by the previous National Government and flexibility started coming back. Government members are shaking their heads but they should go and look at the numbers. Since I have been in this House I do not know how many Labour members have been on their feet telling us what a wonderful job they have done by having more people in apprenticeships across New Zealand. We have heard speech after speech—and they have been right. The number of apprenticeships has been rising but not because there has been a minimum wage. The Government’s own advisers tell it there will now be fewer apprenticeships and would have been fewer apprenticeships if the previous Government had had legislation like this in place. 
In 1992 when flexibility was introduced right across the labour market New Zealanders of all ages of all educational backgrounds and in all areas of employment had a better opportunity of gaining employment. What this Government is doing will reverse that. So I do not think I want to hear any more Government members on their feet in the weeks ahead telling us why there will be an increase in the number of apprenticeships. There will be no such increase. The Government’s own advisers are telling us that because they know there will not be an increase. 
This legislation will apply to very young New Zealanders—to 16 and 17-year-olds. One thing we know about 16 and 17-year-olds is that they are leaving school without a full education through to year 13 or what was the seventh form in my day. They are leaving school without the equivalent of School Certificate—the National Certificate of Educational Achievement—very possibly. They are certainly not leaving with University Entrance or with a bursary. They would not have had time to do that so they are leaving school without the full set of educational skills in their toolbox. They are leaving without those skills. They are taking a statistical risk against all advice given by the Department of Labour in this country and by agencies in every country in the world that the probability is that they will be paid less and that their chances of gaining employment will be less than if they had gained higher educational qualifications. Their only hope for employment is to gain some skills that will provide them with a chance to convince future employers that they are good at a job. That is their only hope. 
What does this legislation tell us? It tells us that it is more important that those young people are guaranteed to receive $6.80 an hour than to have the chance to get a job. I say that that is completely wrong. If I was a 16-year-old New Zealander leaving school without the full educational skill-set in my toolbox I would not care whether I was receiving $6.60 $6.70 or $6.80 an hour. What I would want is to know that I would have the opportunity to be able to earn a good wage in the years to come because I would know I did not have the educational skills to fall back on. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: 
 I move  
That the question be now put 
. 
SHANE ARDERN (NZ National—Taranaki - King Country) 
: 
 I rise to speak in opposition to clause 4. I know that this will come as a surprise to the Government! The reason is that it repeals section 9(c) of the principal Act which deals with people who are in training. That is what clause 4 does. I would like either of the Ministers in the Chamber but particularly the Minister in the chair the Hon Rick Barker who I know has a genuine concern for young New Zealanders in the workforce to take a call and explain to us why he believes that passing this legislation here tonight in the dead of night is going to help young New Zealanders. 
The Government’s own advisers have said that the proposed change may have a small impact on the Government’s fiscal position. The fiscal position would come from increased benefit payments that may occur from passing this legislation. That to me says there are going to be more young New Zealanders on an unemployment benefit than there are now. Maybe the Minister can clear this up for me but that is how I read it. That is what is says in this legislation we are looking at. I would like the Minister or some of the Labour members across the Chamber to take a call and explain to us why that will not happen. All the evidence to the select committee and all those who spoke on behalf of the 26000 New Zealanders who will be affected by this said that that will be the outcome. There will be fewer people in training fewer people in employment fewer people in the productive sector and fewer people given an opportunity to go forward and be productive New Zealanders—not more. Yet as the Hon Richard Prebble said the very vulnerable people whom the Labour Party purports to represent and look after are those who will be the most adversely affected by what is being proposed here tonight. 
It is beyond the comprehension I think of wider society which may be taking an interest in this legislation that a Labour socialist Government would do this—a Labour socialist Government that is predominantly occupied by former trade unionists and people who are supposedly going to look after those people. That fact was never brought home more clearly to me than when I was walking down to the Chamber tonight with the Hon Matt Robson. There is not a member in this House who is more philosophically at odds with me than the Hon Matt Robson but he is not a bad guy; he is quite a nice guy. 
John Key 
: Keith Locke? 
SHANE ARDERN 
: Oh Keith Locke is probably an exception. The member is right. I take that point. There is one member who goes further than Matt Robson; I accept that. Matt Robson and I do not agree on much but he is quite a nice guy. What a sorry sight he was coming down to the House tonight—and he was one of two. That is how the socialists treat their own. When one looks at this legislation one can see how that happens. Who would want to be protected by this lot? That is what they do to the people whom they purport to protect. They go about the country talking to businesses and spinning the spin—the Prime Minister is an expert at this. They talk to businesses about how they are pro-growth— 
John Key 
: With her allies in France. 
SHANE ARDERN 
: That is exactly right. She has been overseas drumming up business with the French and selling dairy products in France. I agree with that; my colleague is absolutely right. She is meeting the coalition of the European unwilling. As we speak tonight the Prime Minister is drumming up dairy business with the French. 
Here we are with a Prime Minister who purports to represent the business sector of this country after having been told by the majority of businesses that this legislation will be detrimental to growth and detrimental to young people and training. We should pause for a moment and consider that. My colleague touched on a very good point: the number of people who have come into industry training through employment because they have been given an opportunity via a very minimum entry point has increased amazingly. 
LYNNE PILLAY (NZ Labour—Waitakere) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 82 
Noes 32 
Motion agreed to. 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
New Zealand National 26; ACT New Zealand 6. 
A party vote was called for on the question  
That clause 4 be agreed to. 
Ayes 74 
Noes 40 
Clause 4 agreed to. 
Labour 52; New Zealand First 13; Green Party 9. 
New Zealand National 26; ACT New Zealand 6; United Future 8. 
Bill reported with amendment.