Mapp Wayne: Minimum Wage (Abolition of Age Discrimination) Amendment Bill — First Reading 
Mapp Wayne: Minimum Wage (Abolition of Age Discrimination) Amendment Bill — First Reading 
[Volume:629;Page:1408] 
Dr WAYNE MAPP (National—North Shore) 
: 
 Sue Bradford certainly raised a series of what can only be described as emotional arguments. Her whole case—and it is in the bill—is built on the case that youth rates are a discrimination under the Human Rights Act 1993. I ask Ms Bradford this: can 16-year-olds vote? Can they enlist in the armed forces? Can they go to a hotel and drink? The answer to all those question is no. So in reality we do actually have proper and reasonable reasons why we have different rules for 16-year-olds 17-year-olds 18-year-olds and so forth. 
Sue Bradford’s second argument was that 16 and 17-year-olds have got the same life experience as older people and that they actually bring more skills to the workplace than older people. Well human experience tells us that that is not the case. Did not Ms Bradford watch television tonight? Did she not hear Mr Phil O’Reilly of Business New Zealand point out exactly the issue of additional training being needed for new workers? It is not just about skill; is it actually about life experience. The third argument she raised was that this bill will help schoolkids. I actually think that schoolkids should be studying. 
The problem with the bill is that it is potentially and actually going to be a perverse incentive. The 16 and 17-year-olds particularly those who would be taking on full-time work will get a perverse incentive not to continue at school. Instead they will try to get a job because of the increased wages. That is the wrong way to go. What we need to do is boost the skills and training of the youth of New Zealand. Frankly that means going to a polytechnic doing apprenticeships going to university or staying at school. We are talking after all about 16 and 17-year-olds—which is years 12 and 13. [ 
Interruption 
] Mr Cosgrove probably remembers that as forms 6 and 7. So perverse incentives will lead to bad outcomes. 
I wish to point out a crucial fact. Has the member considered in an analytical kind of way that the unemployment rate for youth in New Zealand even today is in fact 12 percent compared with 3.4 percent overall. Does that not tell one something? Even in times of—and I admit it—high employment people are still choosing older workers. Why? Because they are more experienced not just in skills but in life skills. That is hugely crucial in the way we grow up. When I heard the Green member speak it was as if 16 and 17-year-olds have all the maturity of someone aged 21 or 22. Common sense tells us that that is simply not true. Indeed that is precisely the reason we do not allow people of that age to drink—it is too risky and they do not have enough experience. So those are the kinds of arguments. 
Hon Clayton Cosgrove 
: Old Grandpa Walton! 
Dr WAYNE MAPP 
: I want to point out to the House and indeed to that carping member that this country has an incredibly difficult problem around productivity. Productivity in this country is low. We have heard members on the other side of the House go on about productivity. They talk about it all the time but they simply do not know what it means to actually boost productivity. I just want to share some statistics with colleagues in the House. The truth of it is that the minimum wage in New Zealand is the highest as a percentage of average incomes than any other country we would like to compare ourselves to. In New Zealand it is basically 50 percent. It certainly will be once the $10.50 rate comes into effect. What is the case in Australia? It is 46 percent. That is as close as it gets. In the United States—it is quite low admittedly—it is 32 percent. In Canada a country that we regularly compare ourselves to the average—because it is done on a provincial basis there—is 40 percent. In the United Kingdom which has had nearly 10 years of a Blair Government—a Government admired by the Labour Party—it is 38 percent. 
Members might say: “Obviously all those countries have got it wrong.” but they have not. Every one of those countries is wealthier than New Zealand. Every one of those countries has higher productivity than New Zealand. So this bill is essentially a naive attempt to try to close the wage wealth and productivity gaps by artificially boosting minimum wages and New Zealand First is guilty of succumbing to these emotional arguments as well. New Zealand First has bought into the $12 argument. 
Hon Member 
: Have they? 
Dr WAYNE MAPP 
: Yes they have. Do members want me to recite to the House the numerous items of guilt that New Zealand First has? No that would take too long so I will not bother. 
The point is this. The reason each one of those countries is more wealthy and more productive is that they put the stress on boosting skills. Australia for instance spends more as a percentage of GDP on tertiary education—and by that I mean apprenticeships polytechnics and universities—than New Zealand does. That is why Australia’s economy runs faster. It has in short made a different choice. It has decided not to encumber its businesses with increased minimum wages. Australia says: “Let’s give the taxpayer the opportunity to spend that money on boosting skills because that is the crucial thing that we have to do to boost productivity.” It is a lesson that members on the other side of the House simply do not get. So Labour in a craven kind of way caving in to its Green mates has said: “Well let’s send this bill to the select committee.” The truth is that sending the bill to the select committee ends up being the same as voting for it finally. I will be very interested to hear how Labour deals with this. 
The problem is if one artificially boosts minimum wages to levels that are frankly too high one ends up reducing profitability reducing opportunity and reducing the ability to put more money into improving skills. Now if the Government had a credible plan to spend some of its surpluses on boosting skills which is the crucial thing to boost productivity I would say: “Good on them!” because I know that works. It works in Australia it works in Britain it works in Canada and it works in the United States. Every one of those countries has a higher level of skills in its workforce than New Zealand does. That is why they are wealthier than New Zealand and that is why they have higher productivity. They have not gone down the path of having an unsustainably high level of minimum wages as the means to close the income gap. It is simply a false way of doing it. 
So I say to the Government that when one is talking about productivity one has to do the things that will actually boost skills. That is most crucial for young people. I ask members to go back to that figure I mentioned earlier—12 percent youth unemployment. Why does that exist primarily? It exists because that 12 percent is unskilled. That 12 percent does not have the life skills the technical skills or the employment skills to get into a job. If we change that we change their life skills. 
Finally I put it to members opposite that young New Zealanders make choices. People who take skills—an apprenticeship university polytechnic and the like—know they are making a life investment. They know they are deferring the immediate gratification of higher wages. Why do they do that—something I suggest that everyone in this room probably did? They do it because they know there are higher incomes down the track. That is the way to boost productivity and to boost life skills for youth workers.