McClay ToddHon TODD McCLAY (National—Rotorua): Madam Speaker thank you very much. In the second reading of this bill the Labour Party is now one step closer to delivering on an election promise which is to increase costs upon business by $2.8 billion a year. We've heard other speakers in the debate so far from the other side—indeed the Minister—talk about productivity gains but you don't increase productivity in an economy or in a business by imposing costs upon that business. You do so by reducing red tape and regulation and allowing those businesses to get on with what it is the economy needs them to do—run their businesses well create profits through productivity and competitiveness and of course look after their employees and pay them more.This is a piece of legislation that is very blunt in what it is trying to achieve as we have seen so very often from the Labour Party. Indeed we hear often from them Unintended consequences are not important." But if we look at everything that's happened during the previous three years in Government and since they have come to Government just six months ago there are unintended consequences that have a direct impact upon the very workers they say they are trying to help. I'm going to set that out in a way that pulls this together because the cost of this legislation upon businesses—not the taxpayer through the taxes they pay to the Government not on the Government itself but the businesses that will meet the cost of this—is $1 billion. When the Minister has said there will be greater productivity he is yet to show the House or any large or small business—and particularly small business—how extra productivity will be driven through this legislation or any anything else the Government has done around workplace relations to make up for the cost of that extra billion dollars. Because it has to be paid for and it will be paid for by businesses in New Zealand. The ones that will be most hard hit in paying this are the small businesses the mums and dads who work so very very hard to provide for themselves and their families and a few employees. They'll bear the cost of this not the Government but them.See the problem you have is if you keep imposing these costs upon businesses they actually have to do one of three things: they absorb them—well that doesn't work anymore because during COVID last year and lockdown businesses in New Zealand small businesses did what was asked of them by this Government they absorbed costs when they weren't able to open and they took on debt. Few if any of them have seen their turnover their income return to those levels sustainably that they were before COVID. So they've taken on that debt and in this case they can't absorb that cost. Secondly the thing that they do is they have to look to reduce their workforce. And yes the Government has said the unemployment rate that has come out today has fallen again but behind that is masked ongoing significant taxpayer and Government contribution to help and keep people in jobs and at some point—the Government can't keep borrowing and spending—that has to stop. So largely what a business does is it has to look at how it can economise and it reduces its workforce. It may not do it on day one but when it comes time when they lose a staff member who may leave or do something else they hesitate and they wonder whether they will replace—in many cases if the Government imposes extra cost they don't replace that person. They have to try and do more with the employees they have left or they must pass the cost on. So the $1 billion that this bill will impose upon businesses in New Zealand—as part of the $2.8 billion of a range of things the Labour Party promised to do before the last election that mean Kiwi businesses pay $2.8 billion extra every year—will have to be passed on. Who is it that pays this $2.8 billion when it's passed on? It is the consumer and it's the very people the Government is saying they're trying to help the most through the very fast increases to the minimum wage and these extra costs including looking at a doubling of sick leave. So I say to the Minister why did he go from five days to 10 days? Where was the maths or the science or the evidence behind that other than it was a good election slogan? Why did he decide to impose only $1 billion of extra cost? And actually where will the productivity gains be for the economy that pay that back? Because he's quick off the tongue but slow off the hip. He hasn't been able to demonstrate that. Finally when it comes to sick leave entitlement actually there is a disincentive here because what the Government has done is said that "Actually you can only carry over one year." Well currently an employee in New Zealand can carry over three years—not year upon year upon year—but there are many employees who don't use their full entitlement and they will grow them and they will carry that over in case it is needed at some stage. Because it's not a holiday it's not an entitlement for a payment it's in the case they are unwell so that they are provided for. What this legislation does is instead of carrying over three years or 15 days it doubles sick leave but can only carry over one year or 10 days. That is likely to have one of two consequences: that actually those who need sick leave that may have 15 days there—plus their five-year entitlement a year; so would have 20—actually wouldn't have that in the same way. Or there may well be employees that say "If I'm going to lose this because I can't carry it over any more I wonder if there is a way to use that." Now I actually believe it's better to find ways to encourage employers and employees to work well together because I'm yet to meet a good employer—and this country is full of business people who are good employers who care about their businesses and actually want to retain good staff; because it is much easier much easier to keep good staff members than it is as this Government thinks for good employers to get rid of them to then go and hire someone else because it may be easier or cheaper. I think we should find a system that trusts and encourages them to work it out for themselves rather than the blunt instrument of the Government of just saying "We made an election promise that we're going to double sick leave. We have not put any thought into it other than it sounded good at the time. There are consequences to this but don't worry it's good for productivity." Forget the $1 billion extra cost that is imposed upon these businesses because the Labour Government sees businesses as an ATM for paying the bills they want to run up. This is a country that has more small businesses per capita than any other country in the world. There is a reason for that because Kiwis are hardworking they're ingenuous and they want to do well. For so very many of them they are wonderful employers and they have amazing employees that turn up to work every single day. For the Government to come in and say "We have a suite of changes we want to sweep through without genuine consultation with the people that will be most affected because we made a promise before the election that will cost $2.8 billion."—and by golly the Government says they're going to keep this promise of an extra $2.8 billion of cost upon Kiwi businesses and therefore consumers the people they say they're trying to help that actually they do them a great disservice. The ultimate outcome of that will be higher costs passed on businesses that struggle more and employees that won't be better off because the employers will have fewer choices rather than more. We should be backing hardworking Kiwi businesses not putting costs on them; finding ways to reduce the costs upon them so they can employ more people and pay them more because almost every small-business person I've met wants to do that.But what they want the Government to do is get off their backs stop imposing costs upon them that make it harder for them. In fact the Government should be finding ways to reduce red tape to reduce burden to make it easier for them to support the good employers and the good employees—focus only on those who are not meeting their obligation and those that are actually encourage them to do more. This is not a positive piece of legislation for the economy and the day the Minister turns up and gives absolute evidence that there will be productivity gains not just a $1 billion cost on businesses particularly small businesses will be a day this House will wait a long time for."