Gilmore Aaron: Minimum Wage and Remuneration Amendment Bill — In Committee 
Gilmore Aaron: Minimum Wage and Remuneration Amendment Bill — In Committee 
[Volume:652;Page:1683] 
AARON GILMORE (National) 
: 
 I rise to oppose the Minimum Wage and Remuneration Amendment Bill. This bill started with good intent I believe to help some contractors who the Opposition thought did not due to perceived exploitation by business earn sufficient income. But the bill was extended by a Supplementary Order Paper to increase the minimum wage over 3 years to a target of $15 per hour. Having grown up in a minimum wage household I know that the use of the minimum wage is not the best way to raise wealth in a minimum wage household. This bill is about freedom of choice—the freedom for self-employed people or contractors to choose how and what they are paid. This bill will remove the incentive to work hard to take risks and be paid for it. Instead it transfers wealth from those people who work hard to those people who do not. This bill will not create one dollar’s worth of wealth for New Zealand. All it will do is transfer wealth from one household to another. This Government believes that should somebody— 
Paul Quinn 
: I know that lot over there wouldn’t know what hard work was Aaron. 
AARON GILMORE 
: —they would not know what hard work was—choose to be an employee then he or she should be provided a safety net that being minimum wage. Someone who chooses instead to be a contractor does so for good reasons—for employment flexibility for taking advantage of the ability to transfer and claim costs for tax-planning purposes or efficiency or even for temporary work. At the end of 2008 about 11 percent of New Zealand workers chose to be self-employed or contractors—11 percent. In fact the number choosing to be self-employed or contractors had risen by about 5 percent in the period from 2002 to 2007 during the time of the Labour Government. Statistics New Zealand released in November 2008 a document called  
Employment and earnings mobility of the self-employed. 
 This reported that the self-employed primarily agricultural and construction workers comprise over 50 percent of the self-employed or contracted staff in New Zealand. Those people are at the bottom 20 percent of that group but they are actually paid twice what the bottom end of workers are paid in New Zealand. It appears the category of contractors that this bill is focused on is a small minority. This bill is not focused on fixing any exploitation that exists or is widespread. It is fixed like a Trojan horse—simply to increase minimum wages across the board. 
Let us have a look again at the issue of exploited low-paid contractors and self-employed people. Incomes at the bottom 20 percent of the self-employed group in New Zealand are twice those of the bottom 20 percent of wage earners and salary earners in New Zealand. This begs the question of what this bill is all about—which is increasing the minimum wage of course. Many self-employed people take on a degree of risk and therefore bid for or negotiate their wages based on their expectations of what they may require. Some get it wrong and as a result for that contract they may be paid below the minimum wage. But on average most—as my figures from Statistics New Zealand point out—are earning well above the equivalent wages of wage earners and salary earners. By increasing the minimum wage and for certain types of self-employed people only this will simply lead to certainty of income for some at the cost of others. 
There is not a big money-tree to pay for all this. In effect this bill would result in a massive cost increase which for businesses in these tough economic times could not be covered. Some industries would also have an administrative nightmare in relation to things that they currently use contracts for because it is efficient for them to do so and results in a low administrative cost. Even worse there is some significant uncertainty about what occupations are in and what are out. A lot of work is still required within this bill to make any definitions sensible. Let us take a specific example. I think this bill is supposed to fix the “phantom newspaper deliverer”. I used to deliver newspapers—probably like some others in this Chamber—the Christchurch  
Star  
in North Beach in fact. 
Paul Quinn 
: Whereabouts was that? 
AARON GILMORE 
: The Christchurch  
Star 
 in North Beach. The Christchurch  
Star  
and the Christchurch Crusaders! We used to deliver $15 worth of newspapers; we would get $15 a night for the delivery of newspapers. There was a choice—we could spend all night delivering or it could be done in 10 minutes half an hour or an hour. I was a diligent young teenager and I used to work hard. I would get it done in about an hour. I could then run off to cricket practice and help in the community a little.