Tisch Lindsay: Holidays Bill — Third Reading 
Tisch Lindsay: Holidays Bill — Third Reading 
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LINDSAY TISCH (National—Piako) 
: 
 I will start my debate by wishing everybody a merry Christmas because what I am going to say in terms of what will happen in the real world in the business community is far from encouraging. This bill is one that at the end of the day degrades employers and employees and increases the compliance costs of doing business. But that is understandable with this Government because it is anti-business anti-growth and anti anything to do with growth. Yet an economy that requires 4 percent growth to maintain and achieve the expectations of New Zealanders in health care in education and in everything else is simply not there. 
We are a nation of small businesses. The number of small businesses has been mentioned in previous debates—267000 small businesses employ fewer than 10 people. Over 90 percent of businesses are small businesses. A damning report has been published by the Ministry of Economic Development. The ministry has special responsibility for businesses in the small and medium sector and that information is of major concern to operators. It states that the profit income for small to medium enterprises—those that employ from one to five employees—is alarming in terms of the amount of money they are making. This is a report from the Government’s own ministry. It states that the average income in the sector is $31000 or looked at in another way less than the average wage. These are small businesses that will now have to meet the extra compliance costs as a result of the Holidays Bill along with the other 17-odd tax increases in the last couple of years. 
Dr the Hon Lockwood Smith 
: It’s 18. 
LINDSAY TISCH 
: This will be 18 and it will be the one that will blow the Government out. The report states that to earn the average income of $31000 an owner-occupier will be fully employed in his or her business and if that person works 37½ hours per week with the average amount of time off for holidays statutory holidays or whatever his or her actual average earnings per hour will be $17.22. If we take into account all the non-productive time that businesses have to comply with—the paperwork that goes with being in business—then the rate per hour is $15.37 which is not an attractive proposition. What we are seeing with this bill is an expectation that employees will have 4 weeks’ annual leave and on top of that they will have the 11 statutory holidays they currently have that they will be entitled to a provision of 5 days’ sick leave which can be accumulated over a number of years and a new provision of 3 days’ bereavement leave for a close relative which I will speak about later on as well as another day for a close associate. If we multiply those hours out they come to 320 hours of non-productive time. That is 320 hours taken off the 2080 hours that I would have to pay my employee—52 weeks a year times 40 hours a week is 2080 hours less 320 hours leaves me with 1760 hours of productive time that can be put into my business. That equates to 44 weeks in the year. If we take that away from the 52 weeks that have to be paid for under this bill employees will get the equivalent of 8 weeks’ leave. As John Key mentioned in European countries where productivity is so low because there are extensive holidays—Austria has the most generous scheme; France has a 35-hour week and 5 weeks’ annual leave which is very good for employees—the productivity rate is such that those countries are having to reassess exactly how they will operate in the future. 
Business is very fractious at the moment and this Government has done absolutely nothing to improve its lot. If we look at the 4 weeks’ annual leave provision we see that the massive cost that will be incurred on employers and on workers was underestimated at the initial introduction. In fact we were told that the cost would be only about $350 million. If we look at the real cost we see it is up to $800 million. An interesting statement that was put out was that the Department of Labour and Treasury figures issued when the extra week’s leave was announced estimated that the law change would cost employers $350 million. Cabinet papers released under the Official Information Act show that this measure will also hit employees in the pocket by another $350 million in lost wages conditions and trade-offs. That is $700 million. If we add the inflationary costs on to that we see that the figure that was mentioned earlier in the debate $800 million is unrealistic. 
A spokesman for the Minister of Labour Margaret Wilson defended the announcement and said that it had always been made clear that there would be unspecified flow-on costs. That is what was said. She said: “You don’t get something for nothing.” Well fancy that! We have always said that there is likely to be give and take when it comes to wage negotiations. The bottom line is that the monetary costs are very small compared to the total wage bill. The total costs that business will have to carry on this measure are far from small. The information I have supplied to members this evening shows that small businesses are struggling to make ends meet at the moment on an average income of only $31000 of take-home pay for the owner-operator. This extra compliance cost will be another nail in the coffin for them. 
If we look at the total scene—at what this actually means—we can see that it is a draconian piece of legislation. The provision that I want to draw the House’s attention to and which I spoke about at some length during the Committee stage debate is the unspecified bereavement leave provision—the 3 days of bereavement leave for a close relative and on top of that the 1 day for a close association. In talking about sickies and that will be the proverbial that will happen now sick leave and bereavement leave provisions will be unlimited. When one is running a business it will be very very difficult to be able to sustain a workforce and have that productivity and provide those employees with the best conditions. We do not begrudge anybody having extra leave but it is about choice. National’s position is very clear. A lot of people get 4 weeks’ annual leave now; that is fine. But why do we not say that it is about choice? If someone does not want the 4 weeks but would rather have the extra pay should that not be an option? In Auckland where the cost of living is so high people I have been talking to are saying that they would rather have the option to be able to decide whether they take the 4 weeks’ holiday or whether they have the extra pay that goes with it. When one has cost of living increases—and the cost of living is far greater in Auckland than what it would be in say a rural area—then that is one of the options that should be provided. 
At the end of the day this bill will be paid for by employees. There will be a wage cap. Someone has to pay and it is the employers who will have to pay for this not the Government. The Government is very generous in providing these sorts of conditions but at the end of the day it will be the employers who pay and the flow-on effect of that will be wage caps for employees. We will not see those wages and conditions that one would expect in the longer term carried through. The total cost of this legislation is unwarranted. It is National’s view that this bill is unnecessary and draconian and National members as we have done throughout the debates are voting against it.