Gosche Mark: Minimum Wage (Abolition of Age Discrimination)Amendment Bill — Second Reading 
Gosche Mark: Minimum Wage (Abolition of Age Discrimination)Amendment Bill — Second Reading 
[Volume:640;Page:10721] 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 The bill we are debating today is not the Employment Relations (Probationary Employment) Amendment Bill that the previous speaker sponsored into this House and that was soundly defeated which it should have been. 
This Minimum Wage (Abolition of Age Discrimination) Amendment Bill deals with the reasonably straightforward issue of whether we pay young people of 16 and 17 less than an 18-year-old or over as the current law allows or whether we take that discrimination away. The Transport and Industrial Relations Committee grappled with the opposing views and—as select committees should do in this Parliament—we listened to both views. In the fine balance that this reported-back bill shows we have taken into account the strong opposition by some employers to doing anything and have listened to their fall-back position as I would describe it of saying that there is a genuine need to deal with the 16-year-old who has never worked before and is coming into the workplace with none of the informal skills that they require and that they think there should be a short period of time where they pay them a lesser amount. That is what this new entrants rate is all about. 
I know there will be people who are disappointed. We had some wonderful young people come before the committee up and down the country and they put forward a very sound case. Many of them told stories about being employed in supervisory positions as 16-year-olds and being responsible for supervising people older than them who happened to be eligible for the adult minimum wage and there was no logic in that. That was unfair and that is why the select committee has said those people should not be paid a lower rate. 
I listened to some of the speeches made earlier—unfortunately not all of them—and I listened to Rodney Hide’s final comments about complexity. Well it is not complex at all. The facts are that everybody has to keep time and wage records. That is the law. Nobody thinks it is wrong. Nobody thinks it is onerous; it is sensible. Maybe the ACT party is alone on that one. If we are running a business it is not hard to count up to 200. If we have kept a record of all the hours of work and they add up to 200 then we know that that person is then eligible for the full minimum adult wage. I do not think that is onerous. I do not think it is onerous to keep records of hours and wages. Those requirements are in the legislation they have been there under various forms of Government and they continue to be there. 
The reason people are paid youth rates out there in some situations notably the fast-food industry is because the employers can do it. The law allows them to. Employers expect this legislation to be passed and have been budgeting and preparing for it for a very long time. Some of them do not pay youth rates at all at the moment because they choose not to. But some of them do it purely because of the competitive pressures of the fast-food chain down the road paying lower wages even though they agree that their workers should get paid the minimum adult wage. In essence this bill allows a level playing field. It does not give anybody an out by having a legal minimum wage for 16 and 17-year-olds thus giving employers the excuse to pay lower wages. 
The interesting thing about hearing submissions on industrial relations as I have done for some years now is that the employer organisations do what I think is a good job in that they go out and survey their membership up and down the country. They came and told us there was not a lot of interest in this bill from most of their membership because those employers do not pay youth rates. I think about 85 percent of them do not pay youth rates. Who does? It is largely employers in the retail sector the hospitality sector and most notably inside that the fast food sector. Those people are concerned about this bill but 85 percent of employers in New Zealand do not give a toss because they do not pay youth rates. They do not see them as a necessary part of running their business. 
When I think about the words of the previous speaker Dr Wayne Mapp who said that if we require employers to pay young people more it will displace young people I say we should look back at the last time that happened. When we brought the minimum wage threshold down from 20 years which is what the threshold used to be to 18 was there displacement? Were fewer hours worked by young people as a result of our doing that? The evidence before the select committee said no there was not. Nobody could give us any evidence to show that young people lost work lost work opportunities or had reduced hours as a result of the last move made by this Government in this area. I do not expect there will be this time either. 
Really I think that the question that will be debated—and I know that it will be debated very fiercely at the Committee stage—is whether we should have the new entrants rate at all. I think the House should have that debate because the select committee had to grapple with it and it came to the majority view that members have now been presented with in the House to debate. I look forward to hearing the debate from those who like the Maori Party members would like to support the bill but without this new entrants rate. I look forward to hearing that debate because it is an important debate for us to have. 
But I also think that this amended bill has a fairly broad amount of support across the political spectrum. In reality the National Party if it could get over the fact that it has been in Opposition so long that it has to oppose things just for the sake of it would be supporting this bill. If those members were using their common sense they would be supporting this bill. If they had actually listened to the submissions before the select committee they would be supporting this bill on the basis that they would have done a bit of homework and found out that the unemployment rate out there 2 weeks ago when I launched a report in Auckland on the labour market stood at 1227 for 18 and 19-year-olds compared with 17000 when National was last in power. Then David Benson-Pope in the House last week I think reported that that figure had dropped to 990 unemployed 18 and 19-year-olds. If National members actually looked at those sorts of statistics and took notice of them they would know that a bill like this will not have very much effect at all on young people in that age group in terms of whether they are in employment education or whatever because most young people over the age of 17 are either in employment or in education right now. 
The other question that National raised in its minority report is an interesting one. It is about whether this bill would encourage people out of education and into work because they would get the minimum adult wage. Again I return to the evidence we heard about who is paying youth rates and I do not think that a lot of young people will rush out of school tomorrow in order to get a job at McDonald’s because suddenly the adult rate is being paid. Young New Zealanders are brighter than that. They would go to McDonald’s and work part-time to get them through study and to help their families out whilst they were still at school but I do not think they would rush out and leave their education behind because of a minimum adult wage being available to them 200 hours after they begin work. That could be in as little as 5 weeks. 
To the critics of that new entrants rate I say that the current situation is that a 16-year-old has to work for 2 years before getting the adult minimum wage. Under the bill after about 5 weeks of full-time employment young people can get on to the adult minimum wage. That is really where the argument lies as to whether the select committee was correct in putting forward that amendment. That matter will be determined by way of a vote in Parliament as the bill goes through the Committee stage. 
As I said if National members were not just playing politics on every single piece of legislation that came into this House if they started to engage the brain read the evidence and listen to the submitters—including the many employers that came before us—they would be agreeing with this bill and not mucking around and being stupid about sensible legislation like this. As we know living on $12 or $11.25 an hour or whatever it might be is a very tough struggle. Those workers who have finally got their boss that lousy outfit called Spotless Healthcare Services to pay them the wages that they deserve were living on $11 and $12 an hour. We as a Government think that is shocking and that is why we put so much money into the public health system to fix that problem. 
We do not think that people should be earning the minimum wage full stop in this country but we must always have a floor that employers cannot go below. A huge number of workers never ever earned the minimum wage in this country before the previous National Government brought in the Employment Contracts Act. We are fixing up the problem; bills like this one help.