Woods Megan: Minimum Wage (Starting-out Wage) Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Woods Megan: Minimum Wage (Starting-out Wage) Amendment Bill — In Committee 
[Sitting date: 19 March 2013. Volume:688;Page:8652. Text is incorporated into the Bound Volume.] 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am happy to take a call on Part 2 of the Minimum Wage (Starting-out Wage) Amendment Bill. In particular I want to talk about the transitional provisions in there and the rates that are going to be paid. I want to talk about those rates and what they mean and about some of the consultation that happened with other Government departments. If we have a look at this I think what we find embedded in the regulatory impact statement which lays out what other Government departments had to say about this is the real agenda here and how the rates that we see set out in this piece of legislation are not intended to stop with young people. They are not intended to be just youth rates. It is quite alarming to read through these when we look at what these rates might be. 
If we have a look at Treasury’s comment on this piece of legislation and the youth rates that are in here Treasury said that it “supports the introduction of a starting out wage but considers that extending eligibility to a wider group of potential employees who face labour market entry barriers would boost the employment impacts of the policy and also be better aligned with the Government’s welfare reform agenda.” So there we have it in very bold type from Treasury in terms of its comments on this. This is not a piece of legislation that is about giving young people a start in the work force. First it will not work—we know that; Government members have even given up arguing that it might achieve that. This is a piece of legislation that is about driving down wages. This is a piece of legislation that is nothing to do with raising wages raising the standard of living and raising the kind of life that New Zealanders can have in New Zealand. 
Then we had the Ministry of Education’s comment in the regulatory impact statement. Let us remember that this is a Government that talks big about an innovation-led economy and about how we are going to have a future that is based on investment. Well let us have a look at the stark reality of what the Ministry of Education had to say about youth rates. The Ministry of Education notes that “the starting out wage may impact on the incomes of students who are working part-time while studying or working full-time during school or tertiary holiday periods. This may impact on students’ ability to finance their current or future tertiary study.” 
This stuff is really worrying to us here on this side of the House. This is not the way to have the better New Zealand we want to have. If we put this together not only with the welfare reforms that Treasury pulled our attention to in the previous comment but with this Government’s lack of commitment to us having an innovation-led economy in terms of postgraduate allowance how are the rates that are prescribed in this legislation going to allow someone to undertake full-time postgraduate study with no access to an allowance having to supplement their loan but only able to earn $11 an hour? 
Let us have a look at the people who might be doing it. Postgraduate students are very likely to have families to support very likely to have other people whom their income is going to need to support. This legislation is going to undermine our ability to have more and more people gain qualifications that will make us a better country that will deliver us higher-paying jobs and that will lift the aspiration above minimum wage jobs which the Government seems obsessed with. The Government thinks that it is only minimum wage jobs that young people should aspire to. Well we here on this side of the House actually want something better for our young people something better than the $11 that is prescribed in this bill. Let us continue through the regulatory impact statement. Let us have a look at some more of what the Ministry of Education had to say. 
Simon O’Connor 
: What’s this got to do with Part 2? 
Dr MEGAN WOODS 
: The Ministry of Education is “concerned that the starting out wage”—i.e. the rates described in Part 2 of this bill—“proposal is at odds with the Government’s Better Public Services targets of increasing the proportion of people attaining NCEA level 2 at school and also the proportion of the population with at least level 4 qualifications aged between 25 and 34.” Again how does this tie in with the great rhetoric we hear from this Government? It does not because this is a Government that is not about raising the standard of living of ordinary New Zealanders. This is not a Government that is about getting more people into work. This is not a Government that is about backing our young people. 
Mr Sabin seems to think he can meet with a couple of his constituents match them up with an employer and hey presto we have solved the problem of youth unemployment. Well Mr Sabin 41500 young New Zealanders are unemployed and 90000 young New Zealanders are not in any form of education employment or training. You cannot solve this in your electorate office. This requires a political solution one that this Government is failing at because it is out of ideas and has nothing to offer except for the youth rates that it is offering in this bill. 
What we have is a Government that will not face up to the fact that it has not put forward any solutions. And then we have a look at what the Ministry of Business Innovation and Employment came in and said. This is the one piece of advice that the Government has latched on to. National has latched on to this and claimed that based on these rates that are prescribed in Part 2 of this bill the starting-out wage will create 2000 new jobs for young people over 2 years. This is based on the modelling and the estimates that the Ministry of Business Innovation and Employment gave National. But it does not take into any kind of account the kinds of jobs and at what expense. This is probably the same kind of modelling that is coming up with this number of 2000 jobs the same model that perhaps told us that we were going to have 177000 new jobs which this Government has failed to deliver on. 
This Government is willing to preside over increasing unemployment and more shockingly and disturbingly preside over increasing youth unemployment. We are at the level of Greece Spain and Portugal when it comes to youth unemployment. For 15 to 19-year-olds we are at 30.9 percent. We on this side of the House will not bury our heads in the sand. We know we have to do something about that. You need real solutions. Tinkering around with the rates such as are prescribed in this piece of legislation is going to do nothing to fix that. It is an absolute disgrace that this is all that this Government can come up with. 
Then if we turn to clause 6 of this piece of legislation which is around the Accident Compensation Act and how it interacts with this all this legislation is doing is it is a cost out model. Workplace health and safety training is going to be put at risk under this legislation. We are setting up an employment model that encourages employers to have a high turnover of employees. Put it together with the 90-day legislation and you have all the incentives in the world for employers to keep turning and churning through young employees and paying youth rates. One of the things that this Government needs to own up to is that this is a perpetual piece of legislation for our young people. They do not get subjected to youth rates just once. This is not a starting-out wage; this applies until the day you graduate in age to an adult wage. This is not about giving young people a start. This is not about— 
Sitting suspended from 6 p.m. to 7.30 p.m. 
The question was put that the amendments set out on Supplementary Order Paper 189 in the name of the Hon Simon Bridges to Part 2 be agreed to. 
Amendments agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 190 in the name of Darien Fenton to insert new clause 8 be agreed to.