Tisch Lindsay: Holidays Bill — Instruction to CommitteeCWH In Committee 
Tisch Lindsay: Holidays Bill — Instruction to CommitteeCWH In Committee 
[Volume:614;Page:10528] 
LINDSAY TISCH (National—Piako) 
: 
 I want to look at the compliance costs that will be associated with the introduction of this bill. It is interesting to note that many different figures have been floated around. Even this afternoon we have heard a number of different figures. But the true cost of the extra week’s leave to come in in April 2007 that this bill allows for has been projected to be in excess of $700 million. That is twice the amount that the Government disclosed. The Government said the figure would be $350 million. Treasury and the Department of Labour issued a statement in which they estimated it would cost employers about $350 million but the Cabinet papers show a different figure. In fact the Cabinet papers released under the Official Information Act show that the figure will be much higher than that and they also show that employees will be hit in the pocket as well. They will be hit in the pocket by about $350 million. So the total cost of these measures will be about $700 million and projections are that it could go out to about $800 million. 
It was interesting to note that the Minister of Labour Margaret Wilson defended the announcement saying that it had always been made clear that there would be unspecified flow-on costs. A minimum cost of $700 million is a huge cost in my opinion. Then she went on to say: “You don’t get something for nothing … The bottom line is that the monetary costs are very small compared to the total wage bill.” In my mind $700 million is a huge amount. It is not a small cost at all. 
That cost will be added on to the way we do business. It is just another part of the huge compliance costs and the regulatory regime that small businesses in New Zealand are having to face that are putting immense costs on those businesses. It has been reported that 267000 small businesses employ 595000 people. We are a nation of small businesses and the cost they will have to bear is such that a lot of small-business owners will ask: “Why would I bother? Why would I want to invest and why would I want to put my money at risk when I am having to carry these costs?”. 
If we look at what happens overseas we see that in the United States there is no mandatory figure for how much holiday entitlement workers have. Employers negotiate that with employees. Most businesses over there pay for about 2 weeks’ leave. If we look at performing countries where there is growth in the economy we see that they do not have many weeks of annual leave. They work productively and have bonus-based incentives. France which has the highest amount of leave at 5 weeks has a productivity rate so low that it is looking to restructure. France has a 35-hour week and 5 weeks’ annual leave and it is in dire straits. So are some of the other countries in the European Union. 
Hon Matt Robson 
: You should take your holidays. 
LINDSAY TISCH 
: The member over there wants to have holidays all the time. That is the way socialists operate. They do not realise where growth and wealth come from. They come from people who are prepared to invest and there are risks associated with that. 
Here is another interesting point that Mr Robson might like to consider: this extra cost will hit health boards and we know how cash-strapped they are. Here are some figures: the Auckland District Health Board said it expected to pay at least $1.25 million a year more and the Capital and Coast District Health Board has estimated that the bill will cost it an extra $400000 in pay for doctors and casual staff which will have to come from existing funding. The health industry is under extreme pressure but this bill says that the Government knows best and will introduce 4 weeks’ annual leave across the board. 
It will also bring in bereavement leave of 3 days—not 3 days per year but 3 days for a close relative as identified in clause 62; I will talk about that later on when we get to Part 2—and there will also be another day’s bereavement leave for a close associate. Workers do not have to produce a doctor’s certificate if they are sick until after 3 days. We are seeing a huge compliance cost regime that New Zealanders cannot afford. We will not achieve the 4 percent growth that this country needs to provide all the services we expect in health education police and security by giving out more annual leave provisions. 
I draw the Committee’s attention to another quite disturbing point which is in clauses 8A and 8C which give power to the labour inspector to determine ordinary weekly pay or relevant daily pay provisions. Clause 8A(2) states: “A Labour Inspector may determine the amount of the employee’s ordinary weekly pay or relevant daily pay as the case may be.” Huge power goes to the labour inspector.