Sowry Roger: Status of Redundancy Payments Bill — First Reading 
Sowry Roger: Status of Redundancy Payments Bill — First Reading 
[Volume:606;Page:4034] 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 The National Party will be opposing the introduction of this bill. First of all it is interesting that in the explanatory note the member states that he is bringing in the bill because he has been told that there are likely to be further meatworks closures. His explanation for that was: “Oh well that is what we said when we were in Opposition and drafted the bill up. Now we are in Government we don’t think there are going to be any closures but we still want the bill.” That does not make sense. If the member is so confident that there are not going to be any more closures of meatworks and that is the industry he is hanging the whole bill off why introduce it? It simply does not wash. 
Again this bill that the Government is so excited about introducing is another that sends every signal to every businessperson who takes a risk who creates a job who enters into something that might be a bit risky but has the potential to provide growth for the country not to do it. Now that the charm offensive is well and truly over every single time this Government can it says to business: “We don’t think you are valuable. We are not interested in you taking risks. We don’t want the jobs.” We are here today with the second piece of legislation in the last 4 hours that is anti-business and sends a signal to business that it is not wanted. 
I say to the member that I have worked with the families of people who have been made redundant as a result of businesses going out of work. In the case of the meat industry which he talked about I have worked with farmers who have also lost a considerable amount because their stock happened on the day to be going through the killing chain. The member nods and says he is worried about those people but where in the bill is the clause for them? Why did the member not put a clause in the bill that gave those people equal preference? Why did he pick out just one little bit? The salary that is due to a worker is given preference. Any salary that is due has a preference call. Any leave that is due has a preference call. Any holiday pay has a preference call. What the member is saying is that when his mates in the unions have negotiated—often by the use of industrial muscle—a pretty generous redundancy deal that should have preference over and above anyone who has stock going through the system for example in a freezing works. That is not right at all and I bet that the member will not go out and defend it in the rural parts of Southland. 
I want to say to the member that it is OK for him to stand up and say that he feels for farmers but he certainly has not put that in this legislation. I had a look to see what is in the schedule in which the member is trying to insert the redundancy clause. After paying the costs of the liquidator the liquidator must next pay the following: “all wages or salary of any employee whether or not earned wholly or in part by way of commission”… So employees get their wages—wages are the first thing the liquidator must pay. The second thing is all holiday pay owed to them at that time. The third thing is any compensation under the Workers Compensation Act. Employees have to be paid that. The fourth part moves on to one of the things that Governments are more interested in which is tax. 
Above all there is nothing for people who have genuine stock caught up in the process. The member is saying: “But above all that I want to put in that any negotiated redundancy gets preference over and above everything else.” If we are to get down to that level if I were a farmer and sending my stock away I would be looking for cash in advance. Business practices will be developed to try to bypass that redundancy clause and that will not do workers any good at all because at the end of the day the freezing works will say: “Well you can have a generous redundancy payment by which point we will have to have terms and conditions for farmers to bypass it; otherwise we will not have any redundancy payment negotiated into the contract at all.” That becomes the choice. I do not think that what the member is proposing is sensible at all. 
The member did not give the credit to the previous National Government that changed the law—I do not expect him to give us the credit either—to make sure that wages salaries and holiday leave were paid before the Inland Revenue Department got its slice. When I came into this House in 1990—Labour had just been in Government for 6 years and had done nothing—a major company in Porirua went into receivership and the Inland Revenue Department came in and had first dibs. The families on the Kapiti Coast in the Porirua area that were owed wages salaries and commission—because it was a clothing factory—got nothing. We changed the law so that wages and salaries did get paid out before the tax department was paid. 
The member would have done himself a service by at least acknowledging that change rather than saying: “That’s not enough; we want the union-negotiated redundancy clause put in there.” What that means is that all other businesses that have stock caught up in the process—it might not be a freezing works; it might be fabric or any of the other commodities tied up in the process—go bust. Their priority falls below the redundancy payment so their staff miss out. If I happen to have a lot of fabric and send it off there I am caught up in the process. My business and my staff miss out so that someone else can get redundancy. 
How good is that and how sensible is it to the process? Yes it is hard for families who go through that but the member should not pass a law that has a ratchet effect right through the economy. That is daft and it is one of the reasons that we will be opposing this legislation. Not only does it send a wrong signal to business it will mean that many businesses will have to move to a cash-upfront option. If someone is thought a bit risky the business will move to cash upfront and that person might be forced to go a lot sooner. It might help the minority in the strong unions that have a redundancy agreement but the people down the track who provide a whole lot of other services and who have stock plant and fixtures caught up in the business are in the category of small employers. They do not have redundancy agreements and when they get caught up in that situation they go under—all because some large firm with a large union has a generous redundancy scheme. I do not think that is right or worthy of the sort of priority the member is trying to give it. In the long run I do not think it will help this economy to grow at all. 
It seems that a lot of Governments long ago abandoned—quite secretly but now quite publicly—any idea of economic growth. I ask the member again and I ask Government members to think about the signal that this bill sends to people who are establishing and trying to grow businesses. This provision would be just another thing to worry about and have to deal with—particularly if they have a medium or small business that is dealing with some of those larger ones and are not sure about their own viability. One might ask them: “What is your redundancy agreement? Because if you have a generous redundancy agreement with your staff then I want to be paid upfront before I deliver any goods or services to you.” I think that is just crazy and we oppose it because of that.