Goldsmith PaulHon PAUL GOLDSMITH (National): Thank you Madam Chair for the opportunity to talk in this important debate on a highly relevant issue for many New Zealanders which is the way in which our workplaces in this country are organised and regulated and asking some basic questions of the Minister in charge. Because we're all conscious of the fact that these are challenging times in the economy facing New Zealand. We look around the world we see what's going on. We see inflation rising everywhere we see the retreat of globalisation over the last few years—which for a small trading nation such as New Zealand is a considerable threat and a real cause for concern. So our focus needs to be on strengthening our economy so that we can maintain our living standards so that we can allow New Zealanders to look after themselves and their families and be prosperous and a focus on that growth in the economy.When we look at the workplace relations rules there's an element which is focused on ensuring redistribution and fairness and security in the workplace relations rules that we have. There's also an element that should be focused on our international competitiveness and how we can do well internationally. I suppose the point I would—or the worry that I have about this Government's current trajectory is that it focuses very much on the redistribution side and very little on the international competitiveness side.So I'm very keen to hear from the Minister he having so far refused to accept that there is any connection between adding more and more costs on to New Zealand businesses small and large either through very substantial minimum wage increases—30 percent over the last three years—through adding extra entitlements such as an extra week of sick leave extra public holiday and his proposed fair pay agreements. He refuses to accept any link whatsoever between those additional costs and either an impact on our international competitiveness for those businesses that are seeking to trade with the rest of the world or on the cost of living for New Zealand consumers which as we all know today more than any is a highly relevant topic as New Zealanders struggle particularly those in the squeezed middle middle-income earners who are not the focus of any attention from this Government who are facing those higher costs that they are struggling to deal with. So I'm very keen to hear from the Minister whether he has rethought that and whether he does acknowledge any connection whatsoever between the many additional costs that he and his Government have imposed on businesses and either our international competitiveness or the costs of living facing New Zealanders.Then I want to get on to the question of the mandatory union deals that he is pushing through the House under the falsely named fair pay agreements. I want to know how he arrives at the characterisation that he makes of New Zealand's workplace relations framework the many thousands of businesses up and down this country as all engaged in a race to the bottom". I want to know where he comes up with this why he chooses to kind of characterise the efforts of New Zealand businesses as engaging in a race to the bottom particularly given the fact that our minimum wage for example is one of the highest in the world. There's no exaggeration in that; it is one of the highest in the world. Certainly in relation to the median wage it is very much amongst one of the highest in the world. So I'll be interested to understand where he comes up with the idea that in that context and with all the other provisions that we have in the New Zealand context there is a race to the bottom going on and that New Zealand workers are in this parlous state notwithstanding imperfections that we see all around the world and the desire for everybody to have higher incomes which is very much the focus of all Government activities.I suppose the point that we would make is that the best and only sustainable way to improve to generate higher incomes is ultimately to have more productive businesses and selling products that the rest of the world are prepared to pay for or our local consumers are prepared to pay for. That should be the appropriate focus of this Government rather than characterising all those New Zealanders who are engaging in enterprise as being engaged in a race to the bottom.CHRIS BAILLIE (ACT): Thank you Madam Chair. Just following on from Mr Goldsmith I just wonder if the Minister would like to comment on the OECD's economic division noting that centralising and co-ordinating negotiations over wages and working conditions has a tendency to compress pay differences among workers. As a result it can weaken the link between individual performance wages and working conditions and could negatively impact productivity growth given that last year there were approximately 160600 workers being paid the minimum wage in New Zealand compared to 2018 where there were only 71500. Thank you.Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): In response to the member who's just resumed his seat I'd note a couple of things. The first is that if one holds the view that we have undesirable income inequality in our country which I do then some compression of wages may not be a bad thing.The second thing that I would note is that the OECD through its labour work and social services directorate does recommend—and the Government has taken this advice on board—that the most effective functional productive and equitable labour markets do tend to have a degree of sector-based bargaining within them. And again I point the member and also Mr Goldsmith to the very clear international evidence that New Zealand with its highly deregulated labour market over the past 30 years has in fact had a lower rate of labour productivity than most economies who have sector-based bargaining including Australia. Mr Goldsmith's speech could have been a speech given by a National Party backbencher in this Chamber back in 1991 when they brought the Employment Contracts Act to this House and promised that going down that track would lift our productivity would lift our competitiveness within the world and none of it happened. We went in the other direction in fact.If we take Mr Goldsmith's commentary to its logical conclusion—he almost said it himself in fact; he believes that we become more competitive by having a lower wage economy. That is not the policy and that is not the vision of this Government. The most effective competitive innovative and dynamic economies around the world invest in their workers. This Government has a policy programme under way that is about making us a more innovative and productive economy: our work with regional skills leadership groups our work driving local economic development through infrastructure provision our work boosting apprenticeships to record levels our work reforming the vocational education system are all about driving those outcomes.Fair pay agreements consistent with sector-based bargaining systems around the world actually support the workforce and employers to come together to deal with some of the long-term challenges that we face whether it's around productivity whether it's around skills and training whether it's around critical work shortages which actually most employers identified to us is the biggest handbrake that they currently face on their future growth prospects. We actually believe on this side of the Chamber that workers and employers working together on those issues through sector-based frameworks is a good thing. That side of the Chamber has never been able to accept that workers have anything valuable to contribute to those discussions and that's just the fundamental difference between us and them."