Cunliffe David: Employment Relations Amendment Bill (No 2) — Second Reading In Committee Speaker Recalled 
Cunliffe David: Employment Relations Amendment Bill (No 2) — Second Reading In Committee Speaker Recalled 
[Volume:668;Page:15416] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is a pleasure to take part in this debate on Part 2 of the Employment Relations Amendment Bill (No 2) which contains the transitional provisions of such an innocuous-sounding bill. 
This bill is of course the fire-at-will bill. That is how it is known in the streets factories and workplaces of New Zealand and quite rightly so. It is the legislation that generalises the so-called pilot which allows workers to be sacked without cause or explanation in their first 90 days of employment and extends that provision to every single workplace in New Zealand. 
The Labour Opposition along with our colleagues in the Greens and others is of course fighting this bill every step of the way. It is appropriate in the debate on the transitional provisions to ask what kinds of workplaces and what kind of country this bill is a transition to. I will ask some specific questions about that issue. Is the legislation a transition to an ethically based system of industrial and employment relations? What would an ethically based system look like? Arguably an ethically based system would respect the rights of all members of a company whether they were directors management or employees. 
This bill quite simply does the opposite. This bill commoditises human beings: it treats human beings as commodities as a factor of production alongside timber bolts and oil. People are not commodities and they should not be treated like commodities. The idea that a New Zealander can be sacked without so much as the dignity of an explanation as to why when it will affect their entire future is not an ethical basis for law. It will affect not only their current earnings and mortgage but also their opportunity to get another job in another place because they will have to explain why they lost their previous one. 
Jo Goodhew 
: I raise a point of order Mr Chairperson. I am just wondering about the relevance to the part under debate. 
The CHAIRPERSON (Eric Roy) 
: I am listening and it is just inside the scope but I ask the member to bring it in please. 
Hon DAVID CUNLIFFE 
: Let us now consider the economics of this transitional provision. When this legislation comes in will it be a transition to a more productive workplace? It will certainly be a less ethical workplace. Here history provides a guide. During the 1990s there was an Act called the Employment Contracts Act. It was at the request of certain employer groups designed to make labour markets more flexible. What could be wrong with that? Flexible meant easier to hire and to fire and lower wage and labour costs. 
The economics of the Employment Contracts Act have been well documented. When the economy transitioned to that industrial law environment labour productivity went down. Why did it go down? Because the cost of labour fell relative to the cost of capital: more workers and fewer tools equal less output per worker per hour. That is a key reason why in the 2000s the New Zealand economy has been much less productive than for example our Australian colleagues’ economy. 
Mr English has in question time been debating with me Mr Anderton Mr Parker and others whether we are catching up with Australia. I will provide some data care of the Hon Jim Anderton which is a combination of OECD Australian Bureau of Statistics and Statistics New Zealand numbers. It measures real GDP per capita at purchasing power parity and it shows that in 1984 the gap between Australian and New Zealand workers was 13 percent. In 1990 it was 21 percent. In 1999 when Labour took office it had grown to 34.2 percent which is extraordinary. By 2005 under the previous Labour-led Government it had dropped to 29.8 percent. It held steady at 29.8 percent to 2006 but here is the kicker: by 2009 it had increased to 36.1 percent and in 2010 the gap between New Zealand and Australian incomes had risen to 37.4 percent. I ask how long it will be before it hits 40 percent. Nobody can argue that we are catching up with Australia. We are going in the opposite direction. 
The CHAIRPERSON (Eric Roy) 
: I caution the member that he is getting outside the scope of the debate which is on either the consequential amendment or the transitional arrangements. 
Hon DAVID CUNLIFFE 
: Thank you Mr Chairman. I appreciate your guidance on that. 
I have been trying to ask in this debate on Part 2 of the innocuous-sounding Employment Relations Amendment Bill (No 2) the fire-at-will bill what transition this bill implies for New Zealanders; for New Zealand workers who will be treated as commodities; and for the New Zealand economy which will have its labour productivity reduced as the incentive to use financial and technological capital goes down because commoditised workers will be cheapened. That is a nonsense economic strategy. We will never compete with the good old People’s Republic of China on wage rates. They pay 50c or $1 an hour; we pay a minimum wage of $13 an hour or thereabouts and of course we want to see that rise. We want to be a high-value high-income economy where people choose to migrate to live to give of their best brains and smarts and to build a brighter future. We do not want a transition to a sweatshop or a banana republic. That is what this transition—[ 
Interruption 
]. The junior Government whip soon to be the former member for Rangitata might sneer but everybody knows that this is a slippery slippery slope. 
Is it a transition to a productive industrial relations environment? That is the next question. I would have thought that even members opposite would acknowledge that New Zealand is in fact very fortunate to have a union movement that is responsible is far-sighted looks at the bigger picture and looks for the win-win situations. Gone are the days—although he had some redeeming virtues—of Jim Knox and the head-butting style of engagement. The New Zealand union movement wants to be social partners for a better future. This Government is taking that opportunity and rubbing unions’ noses in the dirt and telling them to swallow this. It is saying: “We won. You lost. Your workers get it in the neck with the 90-day fire-at-will bill—no ifs no buts no explanation. Down the road bucko.” 
I just lament the stupidity of this move. I lament the lack of humanity of the move. I lament the lack of the most basic understanding of economics that is embedded in this move. I lament frankly the short-sighted greed of employers who have lobbied for it and I lament the lack of spine of a Government that refused to stand up to those employers or perhaps believed it was the right thing to do. 
Debate on transitional provisions is the time when we ask ourselves what future we are transitioning to. What kind of future do we want for New Zealand? People all around the Chamber and those at home should be asking themselves because we are at a critical time in the economic and political cycle what sort of future we want to transition to. Will it be an ecologically responsible ethically based technologically advanced high-value economy with people choosing to migrate to New Zealand not away from it? Will it be a New Zealand where workers are paid good wages and salaries because we are innovative and smart and make great products that people want to pay a premium for with a reputation as a premium brand that leads the world in our chosen market niches? Is it that kind of future—which is clean green clever and wealthy—or is it the opposite? Is it a slippery slope to a banana republic where workers are paid pitifully by employers who cannot see beyond the end of their noses? 
Here is the tragedy in this transition. I think most employers are actually better than that. I think most employers would regard this as kind of a sideshow and quite unnecessary. That is the tragedy of it. The Government has kowtowed to a few ideologues to pass a law that is bad for workers bad for the country and even—in the end actually—bad for employers. 
Labour laments this bill. Of all the legislation that has been considered by this Parliament so far in this term this bill ranks right up there as one of the dumbest things—except the lunacy of the tax cuts but I will leave that aside—that this dumb Government has done since New Zealanders were dumb enough to elect it.