Lubeck MarjaMARJA LUBECK (Labour): Thank you Madam Speaker. It's a real privilege to take a call on the Fair Pay Agreements Bill. I'd like to start with a quote from the report of the Fair Pay Agreement Working Group because this is a group that made independent recommendations to the Government on the scope and design of a fair pay agreement system. I can see some members on the opposite side of the House starting to smile because they knew very well that the work was chaired by the Rt Hon Jim Bolger and that is a person who is probably well-known to the other side of the House. He opened the report as follows: We believe we have designed a Fair Pay Agreements system which will be most useful in sectors or occupations where competition is driving a 'race to the bottom' in terms of wages and conditions." At the same time as the Fair Pay Agreement Working Group report there was independent research undertaken by Business and Economic Research Ltd. They stated on sector bargaining that it had in fact "zero economic risk". They called it a "fairer distribution of wealth". So what will fair pay agreements actually do? They will help turn around those decades of Government policies designed to increase flexibility of labour as a way to increase productivity. But what the policies actually did—and Mr Goldsmith you should be listening to this—is they absolutely failed New Zealand's workers. This productivity meant that the workers saw their share in the growth of the economy actually decline over those years and that was the pattern that was developed after the Employment Contracts Act (ECA) came in in 1991. Within a few years of the ECA coming in wages and conditions across many professions and industries actually reduced significantly. Now Mr Goldsmith mentioned the supermarket sector and I think we should specifically look at the supermarkets because if you compare for example 1997 which was after the Employment Contracts Act came in the wages were 11 percent higher in 1989. By 1997 part-time checkout operators earned 30 percent lower than before the Employment Contracts Act came in because what the law change did was it pushed the cost of operating on to the workforce through lower pay. Helen Kelly described this really well in the biography that's been written about her. It said "The breakdown of standard wages and conditions across the industry fuelled a race to the bottom. Supermarkets paying higher wages would point to their competitors paying less and argue they too had to cut labour costs." and that's what happened.So another good example that many will relate to—especially here—is of course the buses in Wellington. Bus companies had to compete against each other and they could only win the tender if they were the lowest cost and the tenders were really specific. They stipulated where the buses had to be and at what time and how many seats and what fuel and even what fabric had to be on the seat—as I learnt—but the only thing they didn't stipulate was the labour cost. The tender process was solely based on the lowest price and the company with the lowest wages won the tender. So the company with good union agreements and with good fair and decent working conditions couldn't win the tender and that happened in Wellington. The company with those fair conditions and good wages had to crush the wages and conditions of the workers just to stay in business. They could not win the tender and they could not stay in business unless they crushed and participated in what is called the race to the bottom—and that is the race to the bottom. So that is what fair pay agreements will do. They will stop this unfair competition on labour cost that will bring a line in the sand; an industry floor like many other countries have—and we heard that from Minister Michael Wood in his opening speech. If you look at productive economies successful economies they actually have sector-wide agreements. It's not a novel system; it's nothing new. It happens in those countries. For example think about the Scandinavian countries but also Australia. Now we know that the Opposition quite frequently would like to say that Australia's wages continue to outstrip New Zealand's and Kiwis' wages. Well they have sector-wide agreements. Fair-pay agreements have been in Australia for as long as I can remember. So now is the time to do something about it rather than spouting about other countries' wages being higher than here. Let's do something about it. It is very clear that any party that votes against these fair-pay agreements is essentially voting against our workers getting fair and good remuneration.It was a privilege to chair the select committee. We had a huge number of submissions—1796 to be precise—and they spanned across numerous sectors. The majority were individual employers but also we had many employees. We heard evidence of almost 30 hours from 120 submitters and we went all over the country to hear those. Three-quarters of all submitters were in support of the bill—this is very significant; 1340 submitters were in support of the bill—and 20 percent of submitters did not support the bill but many of those stated they did believe there needed to be some kind of concept of fair pay; they just didn't like this system. Really important: only 5 percent—5 percent—said that they didn't believe there needed to be a change and they said there was no problem. That's only 5 percent so my argument is that the Opposition MPs are part of that 5 percent that don't believe there needs to be a change. I'd like to end my contribution now the way I started in the words of the Rt Hon Jim Bolger chair of the Fair Pay Working Agreement Group who said "What we wanted to do in the report is in fact to stop us having some employers totally undercut others who are trying to be fair and decent." One quote from a submitter has stuck with me. They said "Growth isn't dependent on squeezing more and more out of the New Zealand worker." It's a privilege to commend this bill to the House."