Holidays Bill — Instruction to CommitteeCWH In Committee 
Holidays Bill — Instruction to CommitteeCWH In Committee 
[Volume:614;Page:10507] 
Holidays Bill 
Instruction to CommitteeCWH 
Hon MARGARET WILSON (Minister of Labour) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Holidays Bill that it take the bill part by part and consider any schedules as one question 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
In Committee 
Clause 1 Title 
Hon ROGER SOWRY (National) 
: 
 I want to start this debate by stating very clearly that the National Party will be opposing quite vigorously the Holidays Bill. This bill although it has been before the Transport and Industrial Relations Committee deserves proper scrutiny by the House and it will certainly be subject to that as we work through the Committee stage of it. 
It is hard to think what change of name to give a bill called the Holidays Bill that does a number of things—for example paying people who work on public holidays double time even though they might already have that built into their contracts. In the House we have argued many times that a bill should be given a label that indicates exactly the things it does so that the public when they look at legislation know exactly what it does. 
But I want to pick up a suggestion that was made by the Restaurant Association of New Zealand. The association represents all the restaurants around the country—large and small. It appeared before the select committee and suggested that the title of this bill was wrong. It suggested that this bill should be called the “Government Restaurant Tax for Public Holidays Bill”. That is what it believed. The Restaurant Association of New Zealand when appearing before the committee pointed out that it believed on a survey of its members that 40 percent of the restaurants in this country would have to close on public holidays. 
Jill Pettis 
: Aw! They always say that. 
Hon ROGER SOWRY 
: The member for Whanganui groans and moans. Let us see what the restaurants in Wanganui say when she visits them tells them they will now pay extra for opening on a public holiday and asks them whether they will open or will put on the bottom of their menus that little thing that used to appear there back in the 1970s—that if one eats out on a public holiday a surcharge applies. 
Jill Pettis 
: That’s all right. 
Hon ROGER SOWRY 
: The member for Whanganui says that is all right. On her salary that is fine. She will just pay the extra on a public holiday and to heck with all the families who are not on that salary and who want to go out and have a special treat on that day—that is too bad. She can roll her eyes; she does not care a jot about that. But the Restaurant Association of New Zealand does care about that. It talked about this bill and its suggestion was to change the title to the “Government Restaurant Tax for Public Holidays Bill”. I have moved an amendment based directly on the Restaurant Association’s submission to the select committee. 
Interestingly one of the Labour members on the select committee—who took very little interest in the bill—the new member Ms Mackey was very interested in this bill. When people were talking about the title she was reading— 
Jill Pettis 
: She’s not on the committee. 
Hon ROGER SOWRY 
: She was. She was sitting there as a substitute. The whip sent her along and she was riveted by the bill. She was so riveted that once or twice she was in danger of missing turning the page of her  
New Idea  
magazine that she was reading during submissions. While the Restaurant Association was making submissions she was reading  
New Idea 
 that great women’s magazine which has absolutely nothing to do with the select committee. But she is a keen hard-working member of Parliament who clearly wanted to take part in the submissions. 
I point out in moving an amendment that the Government change the title to the “Government Restaurant Tax for Public Holidays Bill” as suggested by the Restaurant Association of New Zealand that the association also said that a large number of jobs would be lost because of this bill. 
SIMON POWER (National—Rangitikei) 
: 
 I start my number of calls on this bill by making a contribution to the title debate. Following on from my colleague Roger Sowry I say that what is interesting about this bill is not the fact that it attempts to tidy up a mishmash of legislation with regard to holidays including public holidays and sickness and bereavement-based leave but more particularly that it is part of an ongoing agenda that this Government has of essentially telling workers and members of the New Zealand public how to live their lives. 
Jill Pettis 
: The Employment Contracts Act didn’t do that did it? 
SIMON POWER 
: The member is right; it did not. The fact is that the Employment Contracts Act allowed members and others who were working to negotiate arrangements that suited them. 
This particular legislation does two things in the main. First interestingly it attempts to balance workers’ home lives with their work lives. Members may call me old-fashioned but I thought that workers were able to do that—that people were quite capable of making those decisions for themselves instead of needing legislation to tell them how to live their lives and how to balance the difference between work and home life. This bill is part of an ongoing patronising finger-wagging agenda that this Government is determined to impose on the working people of New Zealand. First the Government says people will pay more for their sherry and port. Second it then comes along and says that if they are lucky enough to be able to afford the petrol to drive to a rural tavern in order to balance their home life and their work life under the new smoke-free legislation it will not allow them to have a cigarette in their home life while they are balancing that with their work life. 
Second this bill takes away choice from workers. This bill should be called the “Part of a No-Choice Agenda Bill”. What it does sneakily before the Christmas break descends upon Parliament is to give commands to those who have a working relationship by stating when they are to take their holidays how many annual holidays they are to take and how they are to balance their home life with their work life. Members on the Opposition side of the Chamber say that grown adults in New Zealand are capable of making those decisions for themselves and that they do not need an interfering we-know-best cringing “lefty” Government to come along and tell them how those relationships should be conducted. I will tell members who will suffer as a result of this legislation particularly with regard to 4 weeks’ annual leave: the workers themselves. 
This is the “Penalise the Young Working Couple Bill”. Instead of young working couples having a choice as to whether they take a fourth week of annual leave and instead of those couples having a choice as to whether they wish to earn a bit of extra money to reduce their mortgages and pay off some debt this legislation will require that the young hard-working couples of New Zealand take 4 weeks’ annual leave whether they want it or not—primarily because this Government continues to run an agenda that says it knows best as to how people should balance their lives. Members on the Opposition side— 
Hon Chris Carter 
: We do. 
SIMON POWER 
: The Minister in the chair said that Government members do know best and that is a damn good summary of this Government’s attitude towards the working lives of New Zealanders out there. I say to the Minister that he does not know best and God help us on the day that he continues to think that he does. 
Adult New Zealanders who are out there working know how to balance their home lives and work lives. Adult New Zealanders know that if they want to take 4 weeks’ 3 weeks’ or 5 weeks’ annual leave they can work that out during the time of their employment relationship. They do not need to be told by Jill Pettis to take 4 weeks’ annual leave. They are capable of sorting those matters out for themselves. This bill is a “No-Choice Agenda Bill”. 
MOANA MACKEY (Labour) 
: 
 I rise to support the Holidays Bill despite the fact that I did not sit on the Transport and Industrial Relations Committee which looked at the bill at any point. I refute any inference by the uninformed member over on the Opposition benches that I sat on the select committee and looked at the bill at any stage or that I would ever insult any submitters—unlike some members of the Opposition on select committees that I do sit on who suggest that I would be rude enough to read a magazine during those committee meetings. I am pleased Opposition members seem to think I am such a threat that they need to damage my untarnished reputation in the House. 
John Key 
: A life of blameless excellence. 
MOANA MACKEY 
: I will take that as a compliment and say thank you to Mr Key. I rise to support this bill and commend it to the Committee. It is about time that workers in this country had a fair say. 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting this bill and I am very pleased to speak on behalf of the Green Party in this title debate. This title is a very accurate one because the bill is about holidays. I find it to be quite amazing what the previous National Party speakers have said because a holiday means being able to have the choice to not work to benefit oneself by taking part in recreational activities with one’s family and to have some relaxation after the hard work of the year. The idea of a previous speaker Simon Power that somehow this bill tells people how to live their lives is wrong. This bill gives people more opportunity to have variety and relaxation in their lives and is very badly needed. I think the National Party is living in the past. We are just catching up to some of the more advanced countries in the world in respect of increasing paid leave from 3 weeks a year to 4 weeks a year. That brings us up to date with the Western European countries in particular which have much longer holidays than New Zealand has. The workers of New Zealand will welcome this legislation. Simon Power said that people want to have the opportunity not to have a holiday but to work more. I do not think that is the case at all. It would be very hard to come up with working people who would not want a holiday when they could have it and be paid for it and in that sense this is a very progressive bill. It will increase the quality of life that we have. 
This bill came about through the hard work and effort of a lot of people. Unfortunately the Labour Government initially was not very keen on 4 weeks’ leave but I think the pressure of some Labour members and others convinced it. The Green Party has very strongly campaigned for 4 weeks’ leave and we had Matt Robson’s member’s bill which kick-started the whole process. A lot of credit goes to Matt Robson for putting that bill into the ballot and following it through when it was picked out. A lot of people worked together and the various unions—the Engineering Printing and Manufacturing Union and others—were very instrumental in having 4 weeks’ leave included in the bill. The Green Party thinks that the starting date for that should be well before 2007 and we will support amendments to that effect. 
This is a very good bill. I think the provisions on sick leave are advanced too. I know from working in various jobs it was absurd that when workers were sick for one day the employer required them to run off to the doctor and get a medical certificate for that day off. They had to struggle out in the rain and sometimes the snow to get a medical certificate and then became sicker and were off work for about a month. That was a stupid provision and that has at least been loosened up by providing for 5 days’ sick leave and by only requiring a medical certificate after 3 consecutive days off. 
The provision for bereavement leave is very good too. It has been very traumatic for a lot of workers who have less than sympathetic employers that if they have had a bereavement situation they have not been able to get bereavement leave. The provision for casual workers to have bereavement leave is very good too because much of our workforce is now casualised and it is important that people can get time off work to attend the funeral or tangi of a relation and can use that leave accordingly. 
I think the accrual provision for sick leave of up to 15 days in the following year is very important as well because otherwise it encourages workers to go off sick and use up the 5 days’ leave that they have annually and we do not want to encourage that. We want workers to stay at work if they are properly well—to have that motivation—but also not to lose out on the accrual of leave. 
I think the scaremongering by previous speakers that 40 percent of restaurants will close on public holidays etc. is just stupid. The opposition to the bill—this is the strange point—in the Transport and Industrial Relations Committee and I think in the House— 
The CHAIRPERSON (Hon Clem Simich) 
: This bill has been to the Transport and Industrial Relations Committee. The member should come on to the title please and not mind the Opposition. He should just come on to the title. 
KEITH LOCKE 
: Yes this bill is about holidays and I think it is important that we all have holidays. 
LINDSAY TISCH (National—Piako) 
: 
 I am pleased to take part in this debate because this is an anti-business anti-growth and anti-employee piece of legislation. That is what it is. Although it may be seen to give more good deals more holidays and more conditions to employees at the end of the day they will be the big losers. 
I have a number of names for this bill. One could be the “Extended Holiday Bill” because employees working in a business for 52 weeks of the year at 40 hours per week would want to be paid for 2080 hours. That is fine. I would want to be paid for 2080 hours. But the bill prescribes 3 weeks or 15 days of annual leave—15 days of annual leave at 8 hours per day is 120 hours. Then we have 11 statutory holidays at 8 hours per day which makes 88 hours; and 5 sick days at 8 hours per day which makes 40 hours. We now have 3 days of bereavement leave—and this is why it is the “Extended Holiday Bill”—at 8 hours per day which is another 24 hours plus another 1 day for a close associate which makes 8 hours. If we add all those things up it makes 280 hours of non-productive time—or we could say holiday time—out of my 2080 hours. 
What am I left with? As an employer I am left with 1800 hours of productive time. If we divide the 280 hours of time that this bill prescribes by 40 hours per week it equates to 7 weeks of time that I will give my employee. That is why I say that this bill should be entitled the “Extended Holiday Leave Provision Bill” or the “Extended Leave Entitlement Bill” because 280 hours taken out of the 2080 hours I have to pay equates to 7 weeks. As an employer that is 7 weeks of non-productive time that needs to be factored into my costing and pricing exercise. 
The other point I want to make is that the bill could also be regarded as the “Sickie and Bereavement Leave Bill”. One submitter thought this bill was absolutely outrageous because of the provisions increasing sick leave and not requiring employees to provide a medical certificate until after 3 days. He thought it was outrageous that someone who was working for him and was sick did not have to produce any evidence by way of a medical certificate. It was 5 days in the original bill and the select committee rightly brought it back down to 3 days. Even so 3 days is just an opportunity to extend that out and take advantage of the employment situation. 
The other matter I want to mention and the reason I have called the bill the “Sickie and Bereavement Leave Bill” is that nebulous 3 days of bereavement leave—not 3 days per year—which by my calculations means that it is open-ended. As clauses 62 and 63 state where one has close relatives one can have bereavement leave of 3 days. If that period of leave is multiplied the effect on a number of industries could be absolutely diabolical. Once again it is a straight-out abuse of the system. 
A fast-food operator in my area said to me that if this bill came in in its present form—with the bereavement leave provision and on top of that the extra day for a close associate so that we are talking about 4 days—he would seriously consider packing his bags and going to Australia. If he had to put up with this provision in terms of that fast-food business of 53 staff in a 7-day-a-week operation plus the extra compliance costs of working and paying statutory holidays with staff taking a day off in lieu as well one can imagine the huge compliance costs that such 7-day-a-week businesses would have to account for. The point I am making is that the title of this bill should be the “Sickie and Bereavement Leave Bill” because that is really what it is about. 
Mr Power made the point that the legislation should be about choice: employers should be able to negotiate with employees. 
Dr MURIEL NEWMAN (ACT) 
: 
 I rise on behalf of the ACT party to oppose this Holidays Bill. I know that comes as a surprise to the Labour Party but I remember when Max Bradford tried to review the holidays legislation back in the 1996-99 Parliament and that member over there was one of the ones calling out that Mr Bradford was “trying to sell off Christmas”. Well this Labour Government is trying to buy votes at the next election. This is the most blatant electioneering-bribe bill I have seen coming through this Parliament because the major provision will not come in until 2007. So I thought a very good amendment to the title would be the “Holidays Labour Party Election Bribe Bill”. I know that would probably get ruled out of order but I believe it states the bill as it is. That is all that this bill is—a bribe by the Labour Party to buy the votes of workers at the next election and I think it is a disgrace. 
The reason for trying to amend the Holidays Act was to clarify the entitlements. When it came around to holiday time there used to be something like 20000 calls a year to the Department of Labour to clarify entitlements for workers but the key part of any review of the Holidays Act was to allow flexibility and choice for workers. So if workers wanted to take extra days’ leave that was their choice but if they wanted to take the money and work through the holiday period then that was their choice as well. There were a lot of New Zealand workers who needed the money at various times in their lives and they wanted that choice. This Labour Government has taken away all such choices. 
It is interesting to see that a lot of the advice the Labour Government received during the submission process was that the provision in the bill for 4-weeks’ holiday will cause employers to pass on lower wage rates to workers as they go forward. Employers will also try to recoup costs through higher prices so again another amendment to this title could be the “Holidays (Lower Wages and Higher Prices) Bill”. That is exactly what will happen. Workers will take their 4 weeks’ holiday a year but later on will find that their wages will not go up as quickly as they had hoped and consumers will find that a large amount of the cost of this bill—which is estimated to be some $700 million a year—will be passed on to them in higher prices. 
I like the previous speaker’s idea that this bill could be called the “Extended Holidays Bill”. There is certain merit in that but I also thought another amendment to the title could be the “Labour Government Knows Best Holidays Bill”. This bill shows the arrogance of a Government that thinks it knows best on anything to do with the lives of ordinary New Zealanders. 
Another amendment that would have merit would be the “Union Movement Holidays Bill” because it is a clear indication of the other arm of Government. It is not just the Labour Party that is governing this country right now it is also the union movement and every industrial relations amendment that comes through this Parliament is now driven by the union movement. So I thought that “Union Movement Holidays Bill” would be a very clear indication of where the power lies within the Labour Party. 
This is another piece of legislation that is anti-business anti-growth and anti-employment and it is quite sickening that we can have a Government ruling this country that is so anti-business. It means that while times are good things bubble along—and we have been seeing that with our economy which is growing at a reasonable level. But now that Labour is bringing in so many changes when the economy turns down—as we all know it will—we will go into a slide that this country will have trouble climbing back out of. The changes to industrial relations that Labour is bringing in with the union movement right behind it will cause that. 
BRIAN CONNELL (National—Rakaia) 
: 
 It is a pleasure to be able to take a call on the Holidays Bill. In passing I say that I was very pleased to see Miss Mackey come to the Chamber and clear up that misconception that she was reading a magazine at the Transport and Industrial Relations Committee. Knowing her mother as well as I do I take her at her word though I suggest that reading  
New Idea 
 should be compulsory for members of the Labour Party. 
When I took a call on the second reading of this legislation I described the bill as garbage. In fact I think I said it was the garbage of garbage. I wish now as I speak to the title that I had taken a little more time to tell Parliament what I thought about the legislation. I think the title is something of a misnomer because a better title would be the “Compliance Costs Bill”. Essentially adding compliance costs is what this bill is doing to hard-working New Zealanders. We have to get past the point where the Government views employers as having deep pockets in which they can trawl for extra bits in costs because that view is driving business people to the wall. 
The other title that comes to mind with this legislation is the “Nanny State Bill” and I think Muriel Newman alluded to that. Whatever happened to the notion of flexibility? Whatever happened to the notion of employer and employee just sitting down and discussing what was best for them? Why do we feel we suddenly have to legislate and tell people that we know best that it is our way or no way? Essentially what we are saying is that we understand the business of employer-employee relations better than they do. I say that simply has to stop. That is why I think a better title for this bill is the “Nanny State Bill”. 
The other thing that I think is important to reflect on is that this bill is an amalgam of a couple of bills. In some sense I think this bill could be titled the “Holiday Giveaway Bill” because essentially it is a sell-out to the Progressive party. It is the worst type of election bribe. It is cheap politics. This Government will do anything for a vote despite it knowing that it is not good for the long-term prosperity of this country. It is wrong and Labour knew that it was wrong. Treasury reports which Cabinet had knew that it was wrong which is why I have suggested the title “Holiday Giveaway Bill”. Essentially the Government is giving away things that it knows are wrong. The bill is a sop to the Progressive party essentially so that the Government can get its support and can maintain the charade of this minority Government. Steve Maharey knew it was wrong. He said: “We won’t introduce 4 weeks’ holiday in this term.” and Michael Cullen backed him up. That is why I say it is the “Holiday Giveaway Bill”. It is wrong and members of this Government should feel very apologetic. 
I said earlier that this bill would drive up compliance costs which is why I would call it the “Compliance Costs Bill”. I believe that that is what it is. We ask ourselves this question: “Who asked for this legislation?”. 
Lindsay Tisch 
: Good question. Who did? 
BRIAN CONNELL 
: Employees did not ask for it. Employers did not ask for it. This Government with its nanny “we know best” state of mind just proclaimed that this is what they will have. The costs that it will drive into business in this country are prohibitive. 
Jill Pettis 
: Don’t be ridiculous. 
BRIAN CONNELL 
: They are yelling out over there saying that is not true. Well it simply is true. The title “Compliance Costs Bill” as I think the bill should be named is really a truer reflection of what this Government is doing to business in this country. This is just the tip of the iceberg. We are going to see more and more of this nonsense. I for one am prepared to stand up and say that it is just wrong absolutely wrong. The cost of this measure is horrific absolutely horrific—$800 million. 
JOHN KEY (National—Helensville) 
: 
 I can understand why the very youthful member for Otaki Mr Darren Hughes would be in support of this bill. It was not that long ago that Mr Hughes was at school. He is used to long holidays. Schoolchildren get about 6 weeks’ holiday at Christmas. My kids broke up from school just yesterday and they are looking forward to a very long holiday. But my children having 6 weeks off is not a huge cost to the country. Unfortunately the Holidays Bill which legislates for 4 weeks’ holiday from 2007—it is such a great idea that the Government does not want to bring it in until 2007—will come with a very very large price tag indeed. That is why I think an appropriate name for it would be the “Anti-Business Anti-Growth Bill”. 
It is very interesting that when the Holidays Bill was going through the select committee it was welcomed by a great many employers and employees up and down the country. People looked forward to the opportunity for some clarity in terms of legislation that had been in place for over two decades that had caused quite a degree of confusion and that employers and employees alike genuinely found quite difficult to navigate. If the bill simply addressed issues dear to the hearts of employers and employees up and down the country such as sick leave bereavement leave whether time and a half should be paid and the issues of casual workers and part-time workers the name “Holidays Bill” would be very appropriate and “Holidays Act” would be a very appropriate name for it when it became legislation. 
But that is not how this bill has ended up. This bill has ended up like so many of the Labour Party’s promises to be hollow and untrustworthy. If I were not in this Chamber in this great place respected by all New Zealanders I would be thinking of another word that rhymes with “sly” or “tie”. That is the kind of word I would be thinking of to describe the actions of the Prime Minister of New Zealand the Rt Hon Helen Clark when she went up and down the country and made a promise to the employers of New Zealand. They looked her in the eye and said: “Helen can we trust you?”. “Yes you can.” she said. They said: “Helen are you going to put in 4 weeks’ annual leave? Like Nike will you ‘just do it’?”. She said: “No. You have my word. I will not do it.” 
That is why a very appropriate title would be the “Anti-Growth Bill”. What will happen in 2007—it is such a wonderful idea that we need to wait 4 years before it becomes law—is a huge price tag will be put upon the people of New Zealand. This Government is actually using the money of the employees to pay for their own bribe. This bill is robbing food off the table of the lower-paid workers of New Zealand. I see that the entire Labour Government all 52 of them are in the Chamber this afternoon to hear my address. They are looking to the floor with shame because they know that this bill is robbing food off the table of lower-paid workers. That is why it is the “Anti-Growth Bill”. This bill will stop growth and it will stop employment. The very people who need a hand from a Government that knows what it is doing are being dealt a very cruel blow indeed. They will have to buy their own election bribe in 2007. If that is not anti-growth I do not know what is. 
This bill started with the Prime Minister of New Zealand promising employers that she would not introduce 4 weeks’ holiday and it has ended I regret to say with a press release from the Prime Minister telling the people of New Zealand that the cost would be about $350 million. The National Party used the Official Information Act to get the documents from the Minister of Labour’s office. Lo and behold what did we find but that the true cost would be $800 million. That is what this measure will cost—just shy of a billion dollars. 
DAVID PARKER (Labour—Otago) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand Labour 52; Green Party 9; Progressive 2. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Motion agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: We have one amendment to clause 1 in the name of the Hon Roger Sowry. Ordinarily that amendment would be out of order because it is not a serious description of the bill in a narrow sense but in his contribution he did relate this amendment to the bill. 
The question was put that the following amendment in the name of Hon Roger Sowry to clause 1 be agreed to: 
to omit the word “Holidays” and substitute the words “Government Restaurant Tax for Public Holidays”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 36 
New Zealand National 27; ACT New Zealand 8; Independent: Awatere Huata. 
Noes 84 
New Zealand Labour 52; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 76 
New Zealand Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
Noes 44 
New Zealand National 27; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Clause 1 agreed to. 
Part 1 Preliminary provisions 
Hon ROGER SOWRY (National) 
: 
 A substantial number of submissions were received on this part particularly around the costs that it will impose on businesses up and down the country. I know that Labour members do not care about that but I want to go through some of the costs that people talked about regarding this part which relate directly to the cost of having to pay time and a half and double time for public holidays. 
The first example is one given by the Restaurant Association of New Zealand quoting Panda Catering—a catering company that many members will know because it caters at a range of corporate events around the country. In fact it has the catering contract for many of the stadiums and rugby venues around the country. We were given the example that at a rugby game on a public holiday of which there are many the wages rate that Panda would have to pay will go from $15 an hour to $37.50 an hour under this bill. That will mean that those costs simply have to be passed on through higher costs for the food and drink that is sold at the event. 
Again that might not interest the Labour members who are sitting there— 
Jill Pettis 
: I remember when I was a kid— 
Hon ROGER SOWRY 
: The member for Whanganui does not give a toss about it because she would be up there pigging out in the corporate box but for people who are there in the stadium having to go and buy a hot dog is an extra cost. 
Jill Pettis 
: At least I would get an invite. That member doesn’t even get an invitation. 
Hon ROGER SOWRY 
: That is just so typical of the socialist from Whanganui: she is OK to hell with everybody else. 
The rest home industry came before the select committee and quoted extra costs of 1.5 percent on its payroll nationwide. I am glad the Minister of Health is in the Chamber and I hope she will take a call because the rest home industry went to the Ministry of Health and said that this legislation would add 1.5 percent to its wage bill—that is without the 4 weeks leave; that is just the cost of Part 1 which is the double-time cost—and that its wage bill was the largest cost in running a rest home. The Ministry of Health went and talked to the Minister and the Minister said: “Too bad. No adjustment to your contract.” I ask the Minister whether that is right. 
Hon Annette King 
: You talk through a hole in your head. 
Hon ROGER SOWRY 
: The Minister says that is wrong. Is the Minister denying that? 
Hon Annette King 
: I have never met them. 
Hon ROGER SOWRY 
: The Minister needs to listen carefully. They did not say they had met her; they said they had met the ministry and the ministry said: “No adjustments in contract.” 
Hon Annette King 
: The member needs to be honest. 
Hon ROGER SOWRY 
: So the Minister is saying that the rest home industry lied? That is fine. When I have finished my speech I will take that up in a phone call to the rest home industry to find out whether the ministry did say that. The Minister says the industry lied so perhaps it will get the 1.5 percent increase and perhaps the Minister could get on her hind legs and say that. I bet she does not. The ministry will not reimburse rest homes. The rest home industry told the select committee that it will mean offering fewer services to people who live in rest homes. 
Golden Bay Cement came before the select committee and its representatives told us that this bill would add $250000 to their payroll. They said that cost would be passed on to every builder and tradesperson throughout the country. Air New Zealand came before the select committee and this is an interesting one. Air New Zealand is largely Government-owned and it believed that this part of the bill would add several million dollars to its cost structure. 
What does the member for Whanganui think about that? She does not care because taxpayers pay for her to fly around. It does not matter to her. When she flies to the corporate box she does not care about the cost of getting there or about the cost of eating or drinking while she is there. She does not care at all about that because as far as she is concerned someone else is picking up the tab. 
But it is even worse for Air New Zealand. Its representatives made the point that clause 7 was completely unworkable. Clause 7 states that the average ordinary weekly wage of employees must be calculated before they go on leave. However what is the ordinary weekly wage of air hostesses who work different shifts all over the place? They do not have one. So in this bill the Labour Government has decided that an ordinary weekly wage is the weekly wage that employees were paid for the last 4 weeks. The incentive then for every air hostess who is going to take a holiday—or on anyone who works variable shift work—is to work the maximum amount before taking any holidays. If they work the worst shifts—if they work the dog shift—for the month before they go on holiday it means that when they are on leave they will get the maximum amount of pay and it will cost the company the maximum amount while those employees are on leave. I wonder whether the Minister will take a call and tell us about the economic logic of that for companies that pay people for shift work. 
That does not affect just Air New Zealand which the Government probably does not care about because it thinks that is fine it also affects Tegel Foods which is another company that came to us and talked about that very issue. This bill runs totally opposite to what the Government chirps on about in relation to work-life balance. That goes out the window. All shift workers know that before they take a holiday—whether they are a cleaner at a hospital or work at Tegel Foods or for Air New Zealand—that if they swap their shifts around and work nights if they work the graveyard shift for the month before their holiday they will stack up maximum wages. If they then take their leave the company will have to pay them the maximum wage from those 4 weeks while they are on holiday. 
 So much for work-life balance! What will it do to the Minister of Health’s budget when cleaners start realising that this is the way to maximise their holiday pay and they start to see that they can get substantial increases in holiday pay by swapping shifts? What will that do to the budget in her hospitals—and does she care? Probably not. 
But for private enterprise up and down this country that matters a great deal and I hope the Minister will take a call on this particular part and explain to businesses why they should have to put up with these rules. I know that businesses have gone to Labour members and asked them. Labour members said: “Well make a submission. This is what the select committee has done.” and they try to hide behind the majority of the select committee. [ 
Interruption 
] We will not see Jill Pettis going into the rest homes in Whanganui and saying: “You’re not going to be reimbursed for the extra 1.5 percent costs.” What she will say is: “Well look I will argue the case in Wellington but you know things are tough.” We will not see her owning up to the extra costs she is putting on restaurants and rest homes. We will not see her owning up to the Whanganui District Health Board for the extra cost that will drive up its deficit. We will not see her fronting up to the manufacturing sector in Whanganui—a sector that works shifts—and saying: “Well these are the extra costs that I’m putting on your business and I think it’s fair.” 
I want to also talk about Tranz Rail a company that the Government for a while wished to own. Tranz Rail also appeared before the select committee on this part and talked about the cost of locomotive drivers on a salary. Now because they drive the train or unit on a public holiday Tranz Rail ends up having to cop the extra costs. To escape from this Tranz Rail has to be able to prove that at the time of the salary negotiations any double time was taken into account. That is impossible for Tranz Rail to prove. 
DAVID PARKER (Labour—Otago) 
: 
 I want to respond to the suggestion made by an earlier speaker that the commencement date for entitlement to 4 weeks’ leave—about 1 April 2007—is inappropriate. We have heard members saying that this is just a blatant election bribe but it is quite the reverse. The Labour-led Government made a promise not to introduce 4 weeks’ leave effective from this term of Parliament. A member’s bill brought the matter before a select committee. As a consequence it was incorporated into the legislation but with effect from 1 April 2007 so that it does not take effect during this term of Parliament. 
If perchance the Opposition were lucky enough to win the next election— 
Jill Pettis 
: But it won’t. 
DAVID PARKER 
: —which it will not it would have the opportunity to reverse it. If we win the next election it can be taken that we have a mandate for this new law. So it will then quite properly take effect from 1 April 2007. Rather than this bill being an election bribe it is the most proper way to deal with the issue. 
SUE BRADFORD (Green) 
: 
 The Green Party welcomes the Hon Matt Robson’s amendments to Part 1. Those amendments bring back the date of implementation of 4 weeks’ statutory annual leave for all workers by 2 years from 1 April 2007 to 1 April 2005—a very reasonable amendment if I may say so. Like many unions community-based organisations and individuals who made submissions to the Transport and Industrial Relations Committee on Mr Robson’s original member’s bill the Green Party believes that it is actually way past the time that as a society we should accept and endorse the right of all workers to have 4 weeks’ annual leave. Waiting until 2007 to introduce that provision effectively means that for many it will be late 2007 or early 2008 before they become eligible for the extra week’s leave. 
The delay until 2007 is unnecessary and uncalled for. What is more it is the workers in the worst situations who will be hardest hit by the delay. Already some 40 percent of State workers have at least 4 weeks’ leave a year while technical and professional staff in the private sector often have the ability to negotiate 4 week’s leave or even a lot more. It is the people in the lower-paid casual and less skilled parts of the workforce and new entrants to the workforce who are most likely to have to wait the extra 2 years to see any extension to their statutory holiday entitlement. People on low wages need an extra week’s holiday just as much as people on higher wages and salaries. It is one of the less comprehensible aspects of modern thinking that somehow the people in those echelons of the workforce where they have more interesting and fulfilling work are somehow more worthy of extra pay and extra time off than those who struggle hour by hour day by day and week by week to survive on $8.50 or $9.50 an hour doing work that often offers very little personal interest or satisfaction. 
The nature of work has changed a lot in the last 30 years too since statutory leave was last extended to 3 weeks a year. Firstly women are now much more a part of the working world which means that for family life it is even more critical that working parents are able to maximise their time with their children especially during school holidays. Secondly when we look at some particular sectors of the economy we see that a number of industrial sites now operate 24 hours a day 7 days a week 365 days a year while in the retail area many shops are open 7 days a week from early morning and into the night and particularly so at times of the year such as the one we are in at the present. At many such sites employees are often expected to work overtime as well. Those workers are working longer hours often at antisocial times and their need for a longer period of rest and recreation and time with family and friends is even higher than it was in the past when hours of work were far more restricted and confined. A third change to the nature of work since the 1970s when 3 weeks’ leave was introduced has been the growth and acceptance of structural unemployment. Despite the current and very welcome drop in unemployment we still have hundreds of thousands of people out of work in this country by a number of measures—and that includes hidden unemployment. Giving all workers an extra week’s leave is one small part of the solution to unemployment. As well it will simultaneously help to deal with the corollary problem of overwork which has also become systemic and which exists alongside unemployment and underemployment. 
An extra week’s leave in 2005 rather than in 2007 would bring New Zealand more quickly into line with the many other countries overseas that already offer their workers 4—or even more—weeks’ leave each year as of right. An extra week’s leave will also help workers to become more productive with positive impacts for employers including I am sure reductions in absenteeism and sick leave. This Labour Government has commendably talked a lot about improving the work-life balance in the last couple of years. If Labour was really serious about sustaining high labour market participation at the same time as supporting improved productivity and a greater quality of life for workers and their families it would join the Green Party and the Progressives today in voting for 4 weeks’ leave for all workers from April 2005 not from April 2007. 
Dr MURIEL NEWMAN (ACT) 
: 
 I would like to start by talking about the purpose of this bill which is to promote a balance between work and other aspects of an employee’s life. I would like to ask the Minister in the chair Chris Carter how he thinks that compelling people to have 4 weeks’ holiday a year instead of giving them the choice of having higher wages and taking fewer holidays and so on will promote a better balance between their work and way of life. Before I got into Parliament I worked in a company with about 1000 workers and when it came to Christmas time a whole lot of them wanted to take every single hour of work that they possibly could because at that particular time in their lives the money was far more important to them than the holidays. What we should be doing in this Parliament is passing laws that give workers freedom of choice and the freedom to negotiate with their employers so that they can either have more money or more holidays. 
We do not need this sort of legislation; this is like blinking Stalinist-type legislation that takes every bit of choice away from the workers. Yet the Labour Party tries to pretend that it is pro-worker! Well there is a huge anomaly there. I would like the Minister to explain to the Committee how taking away the ability of workers to choose between having more leave or higher wages and more hours of work is in their best interests when the latter is what they want to have. There is a huge anomaly with regard to this legislation. It is the latest in a long line of anti-business legislation that has been passed by this Government. What is worse it is an open political bribe because the bill passes into law 4 weeks’ holiday a year but that does not come into force until 1 April 2007. What sort of Government passes laws that do not come into force until 2007? 
John Key 
: Trying to buy an election! 
Dr MURIEL NEWMAN 
: It is a nonsense. It is simply as the member says a way of trying to buy votes at the next election. 
One of the elements of this bill that I find quite confusing is that I understand that the provision regarding 4 weeks’ holiday which is the major part of this bill did not have proper scrutiny at a select committee. Maybe some of the members who were on the Transport and Industrial Relations Committee which dealt with this bill can clarify that but I understand that the select committee did not properly look at the 4 weeks’ leave provision. That provision is being rammed through by the Labour Government and it has not been subjected to an open public debate through the select committee process. It has not been subjected to proper scrutiny by the select committee. So we have another example of the Government trying to pretend that that provision in the bill has been through the proper process when in fact that is misleading and deceptive. It is another example of the Labour Government not coming clean with the people of New Zealand. 
Maybe the Minister could take a call to explain to the Parliament why a provision as important as this provision giving the workers of New Zealand an extra week’s holiday a year has not been through the proper scrutiny of a select committee. I wonder whether the Minister can look up so I can catch his eye and get him to indicate whether he will take a call to tell us why the select committee did not properly address that issue. Maybe I have that wrong. Maybe the Minister can take a call to tell us whether the select committee that dealt with this bill dealt with the issue of 4 weeks’ holiday a year. Could the Minister take a call and tell us whether that was— 
Jill Pettis 
: He is not allowed to. 
Dr MURIEL NEWMAN 
: Maybe Ms Pettis could say that more clearly. I did not quite hear her. 
Dr Muriel Newman 
: I told him he was not allowed to. 
Dr MURIEL NEWMAN 
: The Minister is not allowed to take a call! Is that what the member from Whanganui is telling this Committee? If that is the case it is outrageous. Does that mean the Minister who is sitting in the chair has been told by the member in charge of this bill that he is not allowed to take a call? He is the Minister in the chair and I want him to take a call. 
PAUL ADAMS (United Future) 
: 
 I know that we have already taken a call and spoken on the title of the bill but I wonder whether it should just be the “Workers’ Holiday Bill”. Where does the poor small-business owner get his holidays in all of this? 
The purpose clause states: “The purpose of this Act is to promote balance between work and other aspects of employees’ lives …”. Well I have learnt in life that sometimes it pays to know whom one is talking to. Around us here in Parliament we have 120 seats. How many members in this 120-seat Parliament have ever employed somebody? Let me see the hands. One two three four five six seven eight nine—11 members out of 120 have actually employed somebody in business. So we have a bit of a challenge when we are dealing with this issue. If I spoke at a car club about increasing the speed limit I would get an entirely different sort of response from what I would get if I were speaking at a local trampers’ club. 
Peter Brown 
: I raise a point of order Madam Chairperson. I am very interested in what United Future has to say about this bill but the survey the member has just conducted is absolutely ridiculous. I did not put my hand up and I have been an employer and an employers’ advocate. Can you ask him to get back to the bill? 
The CHAIRPERSON (Ann Hartley) 
: That is a debating point. The member is entitled to do that in his speech if he so chooses. 
PAUL ADAMS 
: I am very happy to acknowledge Peter Brown’s hand and will increase the number to 12. 
Dr Muriel Newman 
: I raise a point of order Madam Chairperson. The member should be aware of the fact that when he was doing what he just did which was to take a survey of the members in this Chamber he was indirectly reflecting on the number of members who are in this Chamber. He knows very well that not every member is in this Chamber right at this moment in time. So that survey was a complete and utter nonsense and the member was going against the Standing Orders. 
The CHAIRPERSON (Ann Hartley) 
: No the member did not refer to particular members as being absent. 
PAUL ADAMS 
: In coming back to the bill I want to point out that small-business owners in this nation are also people. I think this legislation is very unfair and very unwise given we are trying to get a work-life balance—which we would support—into the lives of all New Zealanders. When we have 85 or 90 percent of small-business owners carrying the burden of the types of increases proposed in this bill I become concerned. 
Let me take for example the provision regarding 4 weeks’ holiday. One must look at who already has that entitlement and then look at the cost of that sort of thing. Obviously I have always found that staff members want to retain their relativity. So we cannot ignore the costs of an additional weeks’ holiday which is what this legislation intends and say that that is not a cost. Well my friends I can assure members that when staff members who already have an additional week of leave by way of relativity see that all workers are to get an extra weeks’ leave they will argue it is fair for them to retain that relativity. For an employer that is a very difficult argument to fight against. I think that the costs of this legislation to the small-business sector will be substantial. I hear the concerns and the cry of the small-business sector. I really wonder whether the Labour Government does listen to that. We hear that Labour is trying to become more business friendly. Well I say this legislation is terribly unbusiness-friendly legislation. 
There are many other factors that come into a work-life balance. Unfortunately we have developed a 24-hour 7-day-a-week world and we probably all enjoy that world—being able to go out to a restaurant at any time of the day or night and having a 24-hour corner store to get the milk from. I do not see anything particularly wrong with that. But some people need the ability to get staff to maintain the business over those hours. Then we start to get into the issue of paying time and a half for this and time and a half for that and in the end the situation becomes very difficult and very challenging for many small-business owners. So much as United Future would love to see people have 4 weeks’ holiday we ask why the Government does not consider—if it is looking at parity with Australia—also dropping our taxation rate to 30c in the dollar so that we can be on a par with the Australian rate. Those employers over there do not have to pay our taxation rate. They pay a lesser taxation rate so therefore they should have more disposable funds that they are able to use to pay for an extra week’s holiday. 
We are not au fait with an extra week of holiday but we are saying that there must be a balance to the equation. One cannot always expect the small-business owner to be giving out and expect him or her to take that. To be honest the Government will put a straw on that camel’s back that will break its back and then what would we do with all the unemployment that we would have in the nation? 
Hon MATT ROBSON (Deputy Leader—Progressive) 
: 
 It interests me that the bill as a whole covers a wide range of reforms for holidays. They have come about through a very intense scrutiny of what is wrong with the present legislation. In particular attention is paid to making sure that there is clarification and that helps employers and employees. There are reforms such as those involving public holidays so that those who work on public holidays get full holiday entitlements. People will be paid at time and a half on public holidays. I welcome that in particular because there have been decades of driving back the conditions that working people won over a long period of time to compensate for their working hours that are outside the normal social hours. There is a social side to employment as well as a working side—that is when people are working if they do not have proper conditions we are actually taking a large part of people’s lives that they are contributing to their area of employment and that in philosophical terms is the alienation of labour. 
This bill gives many people who work a lot of their life back by giving them firstly better conditions and secondly 4 weeks’ leave. I am interested that always when there is a social reform the parties of the right—the conservative parties from United Future to National—talk about the economy as though the people are absent. One of the aspects of the economy is to ensure that those who contribute to its profitability are given their due reward as well. It is 30 years since the bulk of low-paid and unskilled workers have been brought into a system that everybody else has granted himself or herself—4 weeks’ leave. I defy any members in this Parliament to say that in total they do not give themselves 4 weeks’ rest a year. I would be very interested to see any people in this Parliament who do not particularly if they add in the flexibility they have as members of Parliament to organise their working lives. This reform is bringing workers in many of our enterprises into line with others who granted themselves this benefit a long time ago. 
On the question of the economic viability could members name one country that is comparative to New Zealand has 4 weeks’ leave and has gone backwards economically because of this reform? There is no such country that has done that. I have in the name of the Progressives an amendment which I ask people to vote for that puts this measure of 4 weeks’ leave—this just reform that gives to other parts of our society what many members of this Parliament and professional people have given themselves for a long time—in place as from 1 April 2005. I am pleased as a coalition partner that the Labour Party has come to support this bill—it is a Government measure. The Greens and the Progressives were lonely on this when we first brought it in but we now have a majority with Labour and New Zealand First joining in. It is a good and constructive step but if the date this measure comes about is 1 April 2007 then we are condemning a section of our workforce never to get this for two reasons. Firstly some will pass away because it is a health measure as well. There is an aspect of getting more recreation that helps people’s general well-being Secondly by asking people to wait that long we are actually taking from them that part of the recreation side of this measure that is for the benefit of their health. So placing it 2 years further along means that we are denying a section of our workforce the right that so many of us have right now. I ask members to think very very closely about that particular clause clause 2(1) and to bring it in on 1 April 2005 so that the benefit flows to that section of the workforce that is excluded. 
In terms of being family-friendly I once again particularly want to issue the challenge to United Future to tell us about how knocking back 1 week extra for families under pressure is a family-friendly vote—it is absolutely the opposite—and secondly the concern for small businesses. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I think it is fair to say that when New Zealand First discussed this bill it had as tense and as a difficult a time coming to its conclusion as it has had on anything. Basically we see parts of this bill as being business unfriendly. We recognise some of the points made by the Hon Roger Sowry. I think that Paul Adams made a few points although I have to correct him on a few others. 
At the end of the day the holidays legislation in this country needs clarification and it needs to be made fairer both from the employees’ point of view and probably from the employers’ point of view. Paul Adams referred to Australia. I think he inferred that the conditions there are inferior to those in New Zealand. Let me say to the honourable member that the gross wages are higher the tax rates are fractionally higher and the net wages are higher. I have done the research. In Australia people get 4 weeks’ leave a year as against 3 weeks here. The people who do not get currently get 4 weeks’ leave are generally the low-paid lesser skilled people and young people. All of those folk would like to leave this country permanently in significant numbers—not every one of them but people from every one of those categories. I know some personally. They say that the wages in this country are low compared to Australia the UK Asia and many other places in the world and that is an attraction to go elsewhere for higher wages. They also say that the holiday entitlement and what one might call the general conditions of employment are inferior in this country to those in many of those places. A few years ago young people in particular would go to Britain Australia or wherever for an OE but now many of them do not want to come back and they know that from the time they leave. We cannot hold on to our young folk on lifestyle alone. We cannot depend on lifestyle as being the sole factor for young people to make their career here. 
Simon Power 
: Is the member voting for or against the bill? 
PETER BROWN 
: We have made an assessment that we need this bill in this country right now. 
Simon Power 
: What about the minority report? 
PETER BROWN 
: Our minority report? I will come to that. 
Brian Connell 
: The member said it was business unfriendly. 
PETER BROWN 
: Will the member get back to his own seat? We said the bill is business unfriendly and we still believe it is business unfriendly. We still believe that this will give an incentive to some employers—[ 
Interruption 
] Madam Chair if these guys do not get back to their own seats— 
The CHAIRPERSON (Ann Hartley) 
: Please give the speaker a fair go. 
Opposition Member 
: What’s the member going to do? 
PETER BROWN 
: The member wants to know what we are going to do. I will tell the member what we are not going to do. We will not repeal the 4 weeks’ leave provision when it comes in like those members will and we will not have the unemployed queuing outside post offices—like those members. That is what we are not going to do. Those members are like clowns in a circus. We will not sell all our assets like National’s new leader wants to. We will support this bill not because we believe it is perfect but because we believe that New Zealanders particularly young New Zealanders and low-paid New Zealanders have a right to better holiday conditions than they currently enjoy. We believe that in the fullness of time the flaws in this bill will emerge. We worked on a Supplementary Order Paper to produce tax concessions and we would like to couple that with this bill. However we realised that that would put us in the invidious position of having those concessions vetoed by the Minister and we would then have to face the truth—whether we wanted the bill or the bill depending on tax concessions. We came to the conclusion that there is a need for better holiday entitlements in this country. I say to Mr Adams that the sun will come up in the morning even when this bill comes through. It will come up and it will be a bright day not only for that member over there but for the low-paid as well. 
DARREN HUGHES (Labour—Otaki) 
: 
 I move  
That the question be now put 
. 
BRIAN CONNELL (National—Rakaia) 
: 
 I am delighted to take a second call on this bill. I am very clear about what National’s position is on this bill. I say to Mr Brown that we do not support it. Read my lips: we do not support this bill. [ 
Interruption 
] That means immigrants as well. We do not support it so let us be very clear about that. When I think about this legislation and Part 1 in particular I have a vision about the Labour Party. It is a vision of a witches’ cauldron. I see a whole heap of witches hanging around the outside of the cauldron thinking up nasty legislation that they can throw into it. Admittedly there are good-looking witches like Jill Pettis there as well but underneath it all she is still a witch and she is asking how they can hurt the employers of New Zealand just a little bit more. 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. That is not acceptable. 
BRIAN CONNELL 
: I apologise. 
The CHAIRPERSON (Ann Hartley) 
: It is not acceptable to refer to a member like that. Would the member please withdraw. 
BRIAN CONNELL 
: I withdraw. I did not mean any offence. I am sorry if I gave any. Nevertheless I am concerned that we have the Status of Redundancy Payments Bill the Smoke-free Environments Amendment Bill the Employment Relations Law Reform Bill and now we have the Holidays Bill and I have to pose the question of just how much more we can expect the business people of this country to take because they are not a bottomless pit. How much more can we ask those people to contribute before they say “Enough!” 
This bill is a step backwards. In fact it is a step so far back that if we keep doing it we will rediscover dinosaurs. I do not mean the nimble fleet-footed ones like the allosaurus; I mean the slow sloth-type ones that we are encountering at the moment. Indeed we are in great jeopardy of going back so far with this legislation that we will be in an era where we are completely uncompetitive. 
This legislation is appalling. It is ill advised poorly thought out and poorly conceived. The purpose sounds OK and I shall go through that. Clause 3 “Purpose” states: “The purpose of this Act is to promote balance between work and other aspects of employees’ lives and to that end to provide employees with minimum entitlements to—(a) annual holidays to provide the opportunity for rest and recreation:”. That sounds fine and I agree with the genesis of that. But if it is so good why can we not just let employers and employees get together to make those decisions themselves? Why do we have to legislate? If it is such a good idea that everyone inherently says: “Yes that’s fine.” why do we have to legislate? It is entirely not practical and it assumes that every business in this country is exactly the same. It assumes that the conditions that people need in order to make their livelihood in Auckland are exactly the same as those in Southland but the reality is just not like that. Clause 3(b) states: “public holidays for the observance of days of national religious or cultural significance:”. That sounds fine but when we get to— 
Pansy Wong 
: Chinese holiday! 
BRIAN CONNELL 
: I bet it does not happen—not under the New Zealand First Party anyway. I bet it does not happen there; absolutely not! Public holidays sound fine do they not but let us look at the affordability and willingness of some employees to take leave. The police department is a classic example. Does the Committee know that some members of our police force have 6 months’ outstanding leave right now? 
Simon Power 
: Why can’t they take it? 
BRIAN CONNELL 
: It is not that they cannot take it; it is that they do not want to take it. The last thing they want is an extra week’s holiday. Do members know why? Because they enjoy their jobs; they want to be there. What they would like is the ability to cash out some of those entitlements but this legislation does not give them that flexibility. Why not? 
Pansy Wong 
: It would be too logical. 
BRIAN CONNELL 
: Yes it would be too logical. Just imagine the financial impact on the police force when this legislation comes into force. The contingent liability of our police force will go through the roof. That is why I say this legislation is ill conceived and poorly thought through. Comparing the economies of other countries and saying that we should have the same as them is just absolutely naïve. Other countries are not New Zealand. The conditions we need to put in place should be relevant to New Zealand. In case members do not know this is a small economy. 
MARK PECK (Labour—Invercargill) 
: 
 I move  
That the question be now put 
. 
SIMON POWER (National—Rangitikei) 
: 
 I would like to make a further contribution in light of some comments made by members of United Future and New Zealand First. I will then raise an issue that I am concerned about in respect of new clause 5A “Relationship between Act and employment agreements” contained in Part 1 that essentially cuts to the quick as to the sanctity of contract and the employer’s ability to negotiate directly with the employee. 
But first I pass on a couple of comments about some of the comments made on Part 1 by members of United Future—a strange group of members of Parliament. Presumably if United Future is voting against this legislation because it is not business friendly and the worker who is self-employed or employing one or two people will be hit hard by this legislation then United Future will be keen to continue that thread of debate and will withdraw its supply and confidence in the Government for all legislation that is unfriendly towards businesses. 
Members of United Future are chipping in now. They have decided they will get a bit interested in this debate. At least United Future—and I hesitate to say this because I am not keen to give its members too much credit—has a view on this. What I cannot understand is New Zealand First’s view on this bill which as best as I can sum it up goes like this: “We think it is business unfriendly. We’re not happy about it. We know it’s going to damage business but we’ll give it a crack—even though we know it’s going to damage business and we know that it will damage workers’ rights.” It’s the “Let’s give it a whirl!” party. 
Members of New Zealand First should remember that view when we are on the platform at the next election: “We know it’s bad for business but we’ll just give it a whirl.” I shall remind members of that when it comes to the election in 2005. 
Specifically I now turn to clause 5A and ask the Minister in the chair whether she would be good enough—because historically she has been good enough to take calls in the Committee stage—to answer a couple of questions for me. Subclause (1) of new clause 5A “Relationship between Act and employment agreements” states that each entitlement is a minimum entitlement. Subclause (2) states: “This Act does not prevent an employer from providing an employee with enhanced or additional entitlements … on a basis agreed with the employee.” Why can that principle not just apply to the entire employment relationship? What is it about Labour members that they think the employer is automatically in negotiating an employment agreement with the employee going to undermine the employee’s rights and ability to negotiate freely with the employer? What is it about the employer that Labour believes that it is fine for the employee to negotiate directly on enhanced entitlements but what makes employers so much in the gun that if those minimum entitlements are not there they will not be able to negotiate for those? I find that a very odd strain of logic. 
Jill Pettis 
: Because miserable gits like David Bennett make them wait for 10 years. 
SIMON POWER 
: But it goes on. Perhaps the officials could help the Minister— 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. The member cannot say that. 
SIMON POWER 
: What did she say? 
The CHAIRPERSON (Ann Hartley) 
: The member cannot refer to a member like that. 
SIMON POWER 
: I did not take any offence. 
Jill Pettis 
: I said “Miserable gits like David Bennett make them wait 10 years.” 
The CHAIRPERSON (Ann Hartley) 
: I am sorry. I thought the member was referring to the member. 
SIMON POWER 
: The member cannot say that. I have taken offence now. The member should apologise for that. 
The CHAIRPERSON (Ann Hartley) 
: The member should stand withdraw and apologise. 
Jill Pettis 
: I withdraw and apologise but I got it on the record. 
SIMON POWER 
: She was quick off the mark there; she was quick out of the blocks! New clause 5A(3) states: “However an employment agreement that excludes restricts or reduces …”—those minimum entitlements which people cannot negotiate—“(a) has no effect to the extent that it does so;”—OK that makes sense to me—“but (b) is not an illegal contract under the Illegal Contracts Act”. So only those portions that disrupt the minimum entitlements have no effect—in other words this bill wipes them out—but the rest of the contract stands. I ask the Minister in the chair the Hon Judith Tizard whether that is right. Is the contract still enforceable—although the Illegal Contracts Act does not apply—and certain mandatory parts of the contract cannot be contracted out of? I think it is a question worthy enough that the Minister should put down her Christmas card signing get to her feet and answer as to whether the Illegal Contracts Act does make it an illegal contract. It is a very worthwhile question to be asking. I see Matt Robson nodding his head. He thinks it is a fair point. So let us hear from the Minister. 
Hon HARRY DUYNHOVEN (Minister of State) 
: 
 I move  
That the question be now put 
. 
STEPHEN FRANKS (ACT) 
: 
 There is a point in the Holidays Bill that I do hope can be clarified by the Minister in the chair the Hon Judith Tizard during the Committee stage debate. It is a technical point; the sort that the Committee stage is intended to deal with. Clause 7(1)(b) states that ordinary weekly pay for the purposes of calculating annual holiday pay includes—“(iii) the cash value of any board or lodgings provided by the employer to the employee;”. It then states in clause 8 what the cash value is. It goes on in a redundant way to state that clause 7 “includes the cash value of any board or lodgings provided by an employer to the employee—(a) as agreed by the employer and employee; or (b) as determined by a Labour Inspector …”. 
We find words similar to those in clause 7 in clause 12 “Meaning of gross earnings” but paragraph (a)(vi) states: “the cash value of any board or lodgings provided by the employer as agreed or determined under section 8:”. Now there is a difference in wording. Usually in reading statutes if one finds a difference in wording where one thought they would be the same the courts try to put a meaning to it. I do not know what the meaning may be but I would really like to know. Is it something more substantive than drafting clumsiness or maybe an accident of the tortured history of this bill? What happens when the employee is continuing to use the cash value—or is continuing to use the board and lodgings provided—but is on holiday? Because it appears to me that this says the employee must be paid holiday pay including the cash value and then receive on top the board and lodgings. 
I am sure the members who sat on the Transport and Industrial Relations Committee and the officials would have thought of it but it looks to me as if it is a doubling-up. If so there is time for the Minister to put an amendment forward to make clear if that is not intended. If it is intended then that is consistent with the cavalier approach in this bill to just doubling-up irrespective of cost. 
In looking at Part 1 this really is evidence of the projection. The previous speaker got to it when he said: “Why would you do this?”. Why would they pass something that the advice tells them costs hundreds of millions that reduces the employment of those who most need jobs that patronises people and treats them as if they cannot work out their own arrangements that will change the nature of holidays in New Zealand again? Because things that people wanted to go and do—like shopping or go down to the restaurant for a treat—will suddenly be out of reach of some of those who cannot afford it. 
It will not matter of course to the people who can pass their costs on. It will not matter to the people who get the cost of living adjustments—like Labour members opposite who were sneering and talking about this as “trifling”—but it will matter to the people for whom a few dollars—the 1 or 2 percent difference—really matters. 
When I look at the way this has emerged it is the Hon Margaret Wilson’s bill and I think she loves being Lady Bountiful with other people’s money. There is no more refined pleasure than wandering around being Lady Bountiful with other people’s money especially when one can hide that fact and bribe people with their own money and their own time. When she can put in these definitions that are as vague as her “good faith” definition in the Employment Relations Act— 
Simon Power 
: Look where that got her! 
STEPHEN FRANKS 
: Exactly! She had to rewrite it—and it will be worse next time. One finds that a bill that was supposed to make it easy and simple to understand to allow the woman sitting at home trying to make up the wage book for her husband’s business the guy who is sitting down late at night after having worked all day trying to do the wages and the holiday pay calculation then having to dig into this kind of legal drivel that defines “ordinary weekly pay” “relevant daily pay” then goes on and defines “gross earnings”. I am a lawyer. I have spent 20 years reading the law. If this is simplification God save us from any more! Having sat here for the last hour and a half trying to understand what it is going to mean if one is working through the wage book trying to make up the entitlements I cannot tell what it means. 
JILL PETTIS (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
Hon DAVID CARTER (National) 
: 
 Thank you for the opportunity to speak to Part 1. Now that the Minister in the chair the Hon Judith Tizard has finished her Christmas card list I want to ask—[ 
Interruption 
] Sorry she has found three more friends. When she has finished those cards I want her to answer a very specific question about clause 3 “Purpose”. I will read it out so she can think about an answer: “The purpose of this Act is to promote balance between work and other aspects of employees’ lives and to that end to provide employees with minimum entitlements to—(a) annual holidays to provide the opportunity for rest and recreation:”. 
My concern is that those words suggest to me following the rash of anti-business legislation as we head towards the summer of discontent that Margaret Wilson has not yet finished and that more nanny State legislation will be coming in earlier next year telling New Zealanders how they are to spend their annual holidays. That is an easy question for the Minister to take a call on and if she fails to do so then I think my suspicions will be confirmed. Clause 3 states that the purpose is to provide “minimum entitlements to annual holidays to provide the opportunity for rest and recreation:”. 
Pansy Wong 
: No smoking. 
Hon DAVID CARTER 
: We know that people are not allowed to smoke. We know that shortly they will not be allowed to eat hamburgers and all sorts of things. But my point is that a lot of people when they take their holidays do odd jobs around the house—paint the house tidy up the garden etc or whatever mum tells them to do. But will they be allowed to do that when a bill as specific as this is telling people they must take their holidays for rest and recreation? 
Simon Power 
: To get balance! 
Hon DAVID CARTER 
: To get balance. I want the Minister to take some time to explain what that means. Because I am very concerned that there will be further anti-business legislation further opportunities for this current Government to tell people how they are to spend their holidays. This is a simple question for the Minister to answer for us. 
Take the hospitality industry for example. I spent time yesterday with Don Brash in Christchurch and we spoke to a number of people in the hospitality industry who are really struggling—firstly with the anti-smoking legislation and secondly because what they thought was going to be a Holidays Bill that would simplify matters for the industry has now ended up on their plate looking significantly different from what the Prime Minister Helen Clark went around the country talking about prior to the last election. It is significantly different from what Steve Maharey had taken the opportunity of assuring the House about only a year or so ago; all of a sudden at the last minute we have the imposition of 4 weeks’ annual pay without the public of New Zealand knowing when it voted at the last election that that would happen. 
The very people who will pay for this are the workers on the lowest income levels in New Zealand. This sort of legislation must be paid for by somebody. The Government with its anti-business legislation thinks all employers are fat cats. It thinks that all people in business have plenty of money to accept the costs associated with the 4 weeks’ annual leave. That just goes to show to New Zealand particularly to the business sector that the Government does not understand industry. The likely effect is that further pay rises will be significantly minimised because the employer must somehow cover off the additional week’s leave that has been granted by this legislation. 
It is a relatively easy question for the Minister to answer as to why in clause 3 “Purpose” it has specifically detailed what the Prime Minister or the Hon Margaret Wilson or some other member of the sisterhood thinks is what people should be doing on their annual holidays. I do not see any need to be as specific as that. I did not have an opportunity to sit on the select committee; there may be a reason—let us hear it. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 I rise and ask one question of the Minister: do the socialists know any bounds at all? Do they have any boundaries at all or do they just think that business is a bottomless pit for more and more costs and more and more politically correct legislation loaded on it? It is a simple question and I am sure the Minister does not have to have too much knowledge of the detail of the bill to be able to answer that. Do they know any boundaries or do they think that business is just a bottomless pit or do they absolutely dispute the figures put out by Treasury that there would be an extra cost to New Zealand business of $800 million by passing this legislation? That is a simple question. 
Will the Minister also answer the question: how will work-life be enhanced by this legislation? It is totally beyond me how a Government that purports to represent poor lower socio-economic hard workers can think that by introducing an extra week’s leave into the legislation and all the other requirements that are set out in this bill that will somehow or other enhance the lives of those who are in the most vulnerable position when it comes to negotiating their pay rates. 
The next question would be: does the Government believe that further pay rounds in the next 12 months to 2 years up to 2007 will be enhanced by this legislation? Will those people get higher increases or lower pay increases? That is quite a simple question. Will the lower-income workers in the country get a higher or lower pay increase as a result of this legislation? The answer is obvious—they will get a lower pay increase. 
This in effect is a wage freeze. There is no doubt in my mind about that. All small businesses in this country which have this $800 million worth of extra costs now dumped on them will be looking at ways to try to maintain their bottom line. I pause and ask the Government to consider business in New Zealand. Business in New Zealand is a unique structure compared with anywhere else. The average business in this country employs no more than nine people. It is small business by any international comparison. 
Opposition Member 
: It’s five. 
SHANE ARDERN 
: My colleague says it is five. I guess it depends on where one draws the line on what is small business and what is not. But let us say it is between nine and five—it does not make any difference. By comparison with the rest of the world that is significantly lower. The question then is: will this enhance employment opportunities amongst those small businesses? When it comes to work-life balance we already have a situation in small businesses around New Zealand where the bosses or the self-employed people who have taken the risk who have put their capital on the line already are working far too many hours on average. There is no work-life balance. They do that in the sort of hopeful belief that some day they will have a bit of capital behind them and they will succeed despite the fact that statistics show us that overwhelmingly those businesses do not ever end up in that situation. Those people do it because they are self-motivated and want to do something they can feel good about. Often they do it because they enjoy employing people and providing an opportunity for people who would not otherwise have an opportunity. 
Can the Minister answer this question: will their ability to do that be enhanced by this bill or not? Overwhelmingly the answer is “No”. Overwhelmingly those on the other side know it and overwhelmingly that is the reason they are using this as an election bribe—no more than that. That is why it will not be introduced until 2007. Government members know that it will have a detrimental effect on growth in this country. 
I want to talk for a moment about the industry that I belong to myself—the dairy industry. That accounts for 20 percent of this country’s export earnings. We have the largest single manufacturing site of dairy products in the world in Hawera—in the electorate of the honourable member for Whanganui. The former Kiwi site built a new powder plant in the mid-1990s. It cost $120 million. 
JANET MACKEY (Labour—East Coast) 
: 
 I move  
That the question be now put 
. 
LINDSAY TISCH (National—Piako) 
: 
 I want to look at the compliance costs that will be associated with the introduction of this bill. It is interesting to note that many different figures have been floated around. Even this afternoon we have heard a number of different figures. But the true cost of the extra week’s leave to come in in April 2007 that this bill allows for has been projected to be in excess of $700 million. That is twice the amount that the Government disclosed. The Government said the figure would be $350 million. Treasury and the Department of Labour issued a statement in which they estimated it would cost employers about $350 million but the Cabinet papers show a different figure. In fact the Cabinet papers released under the Official Information Act show that the figure will be much higher than that and they also show that employees will be hit in the pocket as well. They will be hit in the pocket by about $350 million. So the total cost of these measures will be about $700 million and projections are that it could go out to about $800 million. 
It was interesting to note that the Minister of Labour Margaret Wilson defended the announcement saying that it had always been made clear that there would be unspecified flow-on costs. A minimum cost of $700 million is a huge cost in my opinion. Then she went on to say: “You don’t get something for nothing … The bottom line is that the monetary costs are very small compared to the total wage bill.” In my mind $700 million is a huge amount. It is not a small cost at all. 
That cost will be added on to the way we do business. It is just another part of the huge compliance costs and the regulatory regime that small businesses in New Zealand are having to face that are putting immense costs on those businesses. It has been reported that 267000 small businesses employ 595000 people. We are a nation of small businesses and the cost they will have to bear is such that a lot of small-business owners will ask: “Why would I bother? Why would I want to invest and why would I want to put my money at risk when I am having to carry these costs?”. 
If we look at what happens overseas we see that in the United States there is no mandatory figure for how much holiday entitlement workers have. Employers negotiate that with employees. Most businesses over there pay for about 2 weeks’ leave. If we look at performing countries where there is growth in the economy we see that they do not have many weeks of annual leave. They work productively and have bonus-based incentives. France which has the highest amount of leave at 5 weeks has a productivity rate so low that it is looking to restructure. France has a 35-hour week and 5 weeks’ annual leave and it is in dire straits. So are some of the other countries in the European Union. 
Hon Matt Robson 
: You should take your holidays. 
LINDSAY TISCH 
: The member over there wants to have holidays all the time. That is the way socialists operate. They do not realise where growth and wealth come from. They come from people who are prepared to invest and there are risks associated with that. 
Here is another interesting point that Mr Robson might like to consider: this extra cost will hit health boards and we know how cash-strapped they are. Here are some figures: the Auckland District Health Board said it expected to pay at least $1.25 million a year more and the Capital and Coast District Health Board has estimated that the bill will cost it an extra $400000 in pay for doctors and casual staff which will have to come from existing funding. The health industry is under extreme pressure but this bill says that the Government knows best and will introduce 4 weeks’ annual leave across the board. 
It will also bring in bereavement leave of 3 days—not 3 days per year but 3 days for a close relative as identified in clause 62; I will talk about that later on when we get to Part 2—and there will also be another day’s bereavement leave for a close associate. Workers do not have to produce a doctor’s certificate if they are sick until after 3 days. We are seeing a huge compliance cost regime that New Zealanders cannot afford. We will not achieve the 4 percent growth that this country needs to provide all the services we expect in health education police and security by giving out more annual leave provisions. 
I draw the Committee’s attention to another quite disturbing point which is in clauses 8A and 8C which give power to the labour inspector to determine ordinary weekly pay or relevant daily pay provisions. Clause 8A(2) states: “A Labour Inspector may determine the amount of the employee’s ordinary weekly pay or relevant daily pay as the case may be.” Huge power goes to the labour inspector. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 174 in the name of the Hon Matt Robson to clause 2(1) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 11 
Green Party 9; Progressive 2. 
Noes 109 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 177 in the name of the Hon Margaret Wilson to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 76 
New Zealand Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
Noes 44 
New Zealand National 27; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 76 
New Zealand Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
Noes 44 
New Zealand National 27; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 1 as amended agreed to. 
Part 2 Holiday and leave entitlements 
Hon ROGER SOWRY (National) 
: 
 Part 2 of this holidays legislation was the part that attracted the most submissions. I shall put aside the 4 weeks’ leave provision that has been put in it because that was a separate bill and I want to talk about it separately. Suffice to say that bill was not really taken seriously by the vast majority of the submitters. They basically said they were opposed to it they took the Prime Minister at her word that it would not be introduced in this term and they moved on to talk about the substantive legislation. I guess one could say “More fool them!” because the Prime Minister broke her promise broke her word to business and turned round and introduced that legislation. The 4 weeks’ leave provision would not be in this bill if the Prime Minister had kept her promise but she did not. She said one thing before the election and did another thing straight after the election. 
Hon David Carter 
: The “Maharey principle”. 
Hon ROGER SOWRY 
: It might be the “Maharey principle”; in fact Mr Maharey was involved with it because he said the same as the Prime Minister did and he broke his promise as well. I know that business is feeling particularly aggrieved with the Prime Minister who can so blatantly say one thing before an election then do something completely opposite after the election. I think that is probably a behavioural trait that we will see a lot more of from this Prime Minister. 
 This part of the bill contains a couple of clauses though that were particularly opposed by submitters. They are the clauses around sick leave. The bill as introduced required that somebody taking sick leave would not have to produce a medical certificate until he or she had been away from work for 5 days. Apart from a couple of trade unions and the Labour members on the Transport and Industrial Relations Committee who seemed to think that provision was all right all of the submitters opposed it. They said that allowing 5 days’ sick leave before an employer could ask for a medical certificate was an absolute nonsense. 
I am glad that in the end the Minister of Labour saw fit to change that. The Labour members on the select committee were in no mood to change it at all but they had word from on high—the Minister negotiated that it would be changed from 5 days down to 3 days—and as Labour members meekly do they voted for what Cabinet had decided. It makes one wonder actually what the purpose of the whole select committee process is if the Minister sits in the splendid isolation of her office decides these things and imposes them on the Labour members who were supposedly listening to submitters. 
That aside the legislation is better than it was in that the period is now 3 days but that is not good enough. In National’s view the period of time in clause 61 “Proof of sickness or injury” should be 1 day. An employer should be able to ask members of staff to provide proof of sickness when they are away on sick leave if he or she needs to do so. 
We heard from employer after employer who told us that they generally do not do that. Generally someone takes a day off and that is fine; the employee rings in sick the employer accepts that the employee is sick and that is it. But—and we heard it from employer after employer—for some staff there can be a “Mondayisation” of sick leave. They just happen to get sick on a Monday. There is a pattern and the employers want to check out that pattern by requiring a notice of sick leave. I think that is a legitimate thing for employers to do. They should not have Mondays—or for that matter Fridays—wrecked by a small minority of staff who always want to take their sick leave in a way that creates a long weekend. We had people saying that all the time. Representatives of Tranz Rail made that point very strongly to us and Tegel Foods was another business that made that point very strongly to us. Representatives of both those businesses talked about the problems that are created in a manufacturing line or in a service industry like the rail network if a group of employees just decide they can always take Monday off and no one will ever be able to ask them for proof of illness or injury. It is not that they just will not be asked for proof; by law they will not be able to be asked for that proof. 
One has to ask oneself why anyone would want to create a law like that. What is its purpose? How will it grow the economy? How will it make the economy go faster? Perhaps the Minister would like to take a call and tell us how she thinks it will help the economy grow faster. Certainly no Labour members on the select committee could talk about it; they never told us that and the Minister never appeared before the committee to show us how it would work at all. We think that area is just a nonsense and we would like to see that period of time for proof of sickness or injury changed back to the 1-day requirement in the legislation at the moment which does not seem to be causing any problem at all. We asked people who came before us what the problem was and the only response we got was from the Greens who said: “Well if you’re required to do that it costs you money and sometimes you have to go out in the rain when you’ve got a cold to get a certificate and you get worse.” I say to the Greens that all the employers sort of rolled their eyes because if someone who rings in obviously has a cold or the flu then the employer will go: “Oh that’s OK.” It is consistent “Mondayisation” or using sick leave to have long weekends that we believe needs to be addressed. 
That was the major issue I have to say in this part of the legislation outside the 4 weeks’ leave provision that the Government sneakily—and it was sneaky—added into the bill It was sneaky because the Prime Minister 3 weeks before the election—she was in a bit of trouble—went along to businesses and gave them her word and her promise that the Government would not introduce it. Then she raced around to Mr Robson and said: “That’s OK. You’re a different party. You introduce it and we’ll all vote for it.” It is a bit like the sneaky little tricks Labour is trying to pull on the cannabis legislation at the moment. The Prime Minister really wants to see cannabis decriminalised so she will let someone else bring that in then she will deal with it as a conscience vote and it will be a case of: “Oh gosh United Future it is so sad that you got tricked by that.” 
The Prime Minister has used the same sort of trickery on the business community regarding this legislation: she told businesses one thing broke her word and proved to them that this is a Prime Minister who simply cannot be trusted. This is a Prime Minister who cares not a fig for business. This is a Prime Minister who says one thing before the election to the productive sector and does another after it. This is a Prime Minister who will engage in mirrors and trickery as much as she possibly can and get away with it because that is the way she operates. They are good old Labour Party tactics; they work in terms of the internal mechanisms of the Labour Party and she has now decided to take those tactics and deal with the business community in the same way. 
Well I have a message for the Prime Minister: the productive sector does not trust her any more. Its members do not believe her any more. They know that this is a Prime Minister whose word cannot be taken at face value. They know that this is a Prime Minister who despite all of the political spin around her “straightforwardness” is very very tricky. We are certainly seeing that with this legislation in the way that the Prime Minister introduced the 4 weeks’ leave provision into this part. Not only that; the Prime Minister thinks it is such a good idea that she has put out to 2007 the date for it to come in and Labour members have just voted in the Committee to make sure that the date is 2007. That has more to do with election bribes than with holding to any principle about work-life balance or other things that the Minister likes to prattle on about. This bill does nothing to achieve any of those things at all. 
STEPHEN FRANKS (ACT) 
: 
 Part 2 contains a whole lot of old-fashioned class-warfare ideas. It is the area where the Labour Government addresses employees generally—[ 
Interruption 
]—and the Hon Margaret Wilson whose bill this is giggles. It would be good if she as Minister in the chair would take a call to explain some of these things. I come to the debate as someone in this Committee who is probably nearest to being a potential user of this bill—a bill that was supposed to clarify things. 
Let us take the example of the new sick leave provisions. The worst employees of course make things bad for the other employees. It is the worst employees who take advantage of any privilege. It is the worst employees who make an employer wish he or she had never been decent and granted concessions. It is the worst employees who allow a burden to fall on others because they do not care when they turn up or what they do when they do. This bill recreates the public service culture of skiving off—of Spanish customs that mean sick leave is not for sickness but is just another holiday entitlement—and it extends that culture throughout New Zealand’s employment scene. This bill says that the employer effectively has to recognise that every employee has not 4 weeks’ but 5 weeks’ holiday. This bill says that 5 days’ extra sick leave per year without any proof whatsoever of sickness or injury is an entitlement that accumulates like holidays and can then be taken in the same way. The employer is not allowed to ask for proof of sickness or injury until 3 days have gone so employees can take all their sick leave as holiday leave as long as they do not take it in lots of more than 3 days at a time. 
This bill now says to every employee: “You’re a mug if you don’t cheat.” This bill recreates in every workplace tension upon people who are diligent whose object is the job at hand and who want to feel proud of the integrity in their work unit. It says to them: “Lie”. This bill says that good employers do not ask questions of employees who take the occasional sick day. If good employers offer a benefit like that the Labour Government will force every employer to do it. Of course it also takes away the safeguard. It will take away the procedure that enabled employers to make sure that a concession like that was not abused. That safeguard was that employers could ask for a certificate if they were suspicious that employees were exploiting any concession. Now they will not be able to do that. 
The corrosive effect relates not just to sick leave but also to bereavement leave entitlement. A whole lot of the new entitlements to bereavement leave do not depend even on the immediacy of a family relationship. Decent employers with valued employees would very rarely have insisted on bereavement leave being taken to the letter when someone was plainly broken up by a bereavement. 
A new set of prudent customs will develop in the workplace. One of them is one that this Government is very good at introducing. Essentially a simple rule of thumb for this prudent employer will be: “Do not hire Maori. If you can avoid it do not hire people who may have got their qualifications on some kind of preferential quota. Do not hire them because you will not be able to ask about previous convictions—and now do not hire them because they can ask for bereavement leave if they have ‘any cultural responsibilities in relation to the death’.” Who will be able to challenge that? What employer will want to buy into the fight of challenging someone’s claim to have cultural responsibilities? If the Hon Margaret Wilson had really wanted to simplify clarify and make it easier to be flexible as she so falsely claimed this bill would have had in it a definition of “cultural responsibilities”. It would have assisted employers to know when someone was not just dragging the chain but also taking ruthless advantage. 
SUE BRADFORD (Green) 
: 
 The Green Party has two amendments to Part 2 on the Table that we would like the Committee to consider. The first is to clause 46 which recommends that we omit the words “the time actually worked on the day” and substitute the words “the hours ordinarily worked on the day”. The aim of this amendment is to change the bill so that if an employee works on any part of a public holiday he or she should be paid the ordinary pay for that day plus half the rate again for the actual time worked on that day or the amount in the existing employment agreement. The bill currently compensates employees at the rate of one and a half times the ordinary pay for the hours worked on the day but does not pay them if employers send them home early. 
The Green Party like a number of union submitters believes that workers should be fairly compensated for having to come into work on a day that is a public holiday and on which they would normally work. The situation as it stands could see some workers receiving less money for a day’s work than they would normally receive. This is simply unfair when someone has planned and prepared with all that that means during periods like this Christmas season to come in and work on time and in a healthy state and then be told to go home early with an unexpected loss of pay. As the bill stands it encourages employers to use even regular employees on public holidays as a form of casual labour or on an ad hoc basis in a way that disturbs time with family and friends but does not provide sufficient pay to make it worthwhile for employees. The Green Party wants to see a reduction in the barriers to employees taking time off to be with their families not the opposite. This bill does provide sufficient provisions so that employers can take on casual staff during public holiday periods without having to penalise regular workers. We therefore seek support for our amendment to clause 46. 
The second amendment we are proposing to this part is to clause 61 which deals with proof of sickness or injury. We recommend that the words “for a period of 3 or more consecutive calendar days” be omitted and substituted by the words “for a period of 5 or more consecutive working days”. 
This part of the bill started off OK as originally drafted with the 5 days in but unfortunately over the period of the select committee consideration for some reason the Labour Government decided to move backwards to a requirement that workers be asked to present proof after 3 days off for sickness or injury. I do not know if this retrogressive step was because of a concern about staff taking so-called long weekends or because of a general Labour susceptibility to buckling to business demands in the middle of employment relations legislation but the consequences are unfortunate. The move to a 3-day rather than a 5-day requirement will place a severe and unnecessary financial burden on some low-income workers. It can cost up to $50 a pop to go to the doctor for a medical certificate. It is a pity that people will be forced to do this especially when they are suffering from an illness like a cold or flu which normally does not need medical treatment. 
The problem of recurring absences on Fridays or Mondays can be a real one and I would be the first to acknowledge that but I suggest that it is best dealt with by careful and good management practices through things like sensitive and well-done performance reviews rather than through the blunt instrument of this clause in this legislation which can be used or abused by some employers. I call on the Labour Government to change its mind on this and revert to its original position. 
A third area of particular concern for the Green Party in relation to this part concerns the general clauses around sick leave. Currently parents—particularly mothers and those caring for sick or elderly relatives—are often disadvantaged by not being able to have enough leave or paid leave when their dependants themselves are sick. We are pleased that minimum sick leave entitlements are clarified and entrenched in this legislation and it is made abundantly clear in clause 58 that taking time off to care for dependants who are sick or injured is totally permissible across the board. Ideally however we would have preferred to see domestic leave separated from sick leave so that those caring for dependants would be entitled to a separate quota. This is because now that so many women are in the regular workforce and so many families have both parents working it is critical that at least one parent or caregiver can legitimately take time off when a child or other dependant is ill. All too often women use their own sick leave entitlement to meet family obligations. We would have preferred to see a separation of sick leave from domestic leave and an extension to the overall entitlement. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 Basically New Zealand is a low-wage country when compared with Australia Britain and various other places in the world. Now we in this Chamber cannot change that. It is almost impossible to change that through any short-term solution. To a large degree the market dictates what is paid for our goods and services and what people are paid comes back to that. [ 
Interruption 
] The member here keeps muttering behind me. I do not know one area of expertise where New Zealanders are second-rate—not one. They lead the world in the industries I come from and they lead world expertise in a number of other areas also. 
I have to say that New Zealanders have difficulty getting paid what they are worth in their own country. If we cannot change the wage rates we can do something about the holiday entitlements and Part 2—the holiday and leave entitlements segment—attempts to do exactly that. 
That said I have to say that in general terms the bill is business-unfriendly. I have said that before and I would like to clarify just what I mean. Because of the effects of this bill there will be some employers who of necessity will have to pass the extra costs on; there will be some who will have to restrict their activity because of the extra costs; there will be some who will revert to employing people casually when normally they would have employed them permanently; and there will be other employers who will be easily able to absorb the costs. 
The employers that concern me are rest homes organisations like the IHC and the health boards. Will the Government help them come to terms with this bill? 
Lindsay Tisch 
: Good question for the Minister. Ask the Minister that. 
PETER BROWN 
: I do not know. The Minister might take a call and tell us that. 
The benefit of hindsight will point out the flaws in this bill and it will have to be tidied up but we believe it moves society in the right direction. There are a number of areas that concern us and I outlined them in our minority report. Basically these are the payment methodology; some automatic entitlements with sickness and bereavement leave that have been touched on here today and an underpinning lack of flexibility. In time all those things will have to be addressed more thoroughly than perhaps they have been in this bill. However we believe that the holiday legislation as it is needs to be tidied up and we think this bill moves in that direction. 
We believe that the Government will eventually have to look at a favourable tax regime for employers particularly for some small employers who will suffer some hardship as a result of this bill. New Zealand First will be advocating strongly for a favourable tax regime for employers—particularly employers who are prepared to employ people permanently rather than casually as a result of this bill. 
In summary we believe that this bill takes a few steps forward in the right direction but it also takes a few steps backwards. In essence we believe it is a positive move towards addressing some of the concerns that affect New Zealanders in terms of holidays and their entitlements to them. I listened intently to the costs tabled by some of the members who have spoken on this bill. I recognise that what they have said is basically true but we cannot move society ahead on the backs of low-paid workers and young people who have fewer holiday entitlements than we believe is generally fair. This country has to move ahead. Contrary to what the National Party says we have to treat our young people and low-paid people more fairly. 
PAUL ADAMS (United Future) 
: 
 I would like to address Part 2 on behalf of United Future but I would first like to address a question put forward in a previous session by Simon Power when he asked how United Future could vote against this legislation yet support the Government on supply and confidence. Well Simon Power should be waking up by now to the fact that United Future is a party that is committed to its word and sticks to its agreement. When we make a promise we fulfil it. 
Part 2 deals with holidays and leave entitlement. I really believe that in business there has to be an employer-employee working relationship yet it seems to me that this legislation is very one-sided. We have heard a lot about the rights to a work-life balance and I do not believe that many people in this Chamber would disagree with that. Yet over the years I have seen situations where a worker works very hard and diligently for his employer but because of his time of life because of the stage his family may be at and the financial pressure that may be upon him he is not in a position where he can actually take holidays. 
 So from an employer’s perspective how does this legislation deal with a situation whereby employees have worked hard but on the day they walk out for their holidays they take up a part-time job or go to work for somebody else for 3 or 4 weeks and therefore get no work-life balance? They get no refreshment yet that employer has to take them back on at the end of their holiday entitlement and they continue to work. 
I believe that when we take away the ability to negotiate take away people’s ability to choose and take away the ability of an employer or an employee to negotiate for things that might be more beneficial at that time we run into trouble. I believe that it comes down to legalism and in all of my days I have never seen legalism work. At the end of the day it is a relationship—whether it is a working relationship between an employer and an employee or a relationship between a man and a woman it has to be a good working relationship. 
The bill refers to providing for employees but employers are required to do the providing. I believe there should be requirements on employees so that if they are given an entitlement to holidays there has to be an element of responsibility and they should be required to take a holiday. How can employers deal with a situation where they find that their staff are working elsewhere or are staying at home doing “homers”? 
As Mr Franks pointed out this is spending other people’s money. There are only three ways of spending money: we can spend our own money on ourselves which we are very careful about; we can spend our own money on somebody else which we are also very careful about; but what we are dealing with here is spending somebody else’s money on somebody else and that is when people are normally very carefree. The employers’ groups have calculated that on the basis of the current workforce an additional week’s leave would cost employers an extra $908.5 million a year or 0.7 percent of gross domestic product. The unions have argued that that is false because it includes those who already have 4 weeks’ leave but as I said in Part 1 they will want that again by entitlement. 
The Government likes to ride on the coat-tails of Peter Jackson’s success with  
The Lord of the Rings 
 and rightfully so—I think it is fantastic—but will it listen to the five companies involved in the films which all oppose this bill? They tend to work in fairly intense bursts and argue that entitlements such as time and a half will add 2.5 to 3 percent to their wage bills. They say that those increased labour costs will reduce their competitiveness and attractiveness to overseas film producers when they already pay their workers well above the accepted rate. Normally they are reliant on contractors but if employees were eligible for time and a half and 4 weeks’ leave they predict that the contractors would be encouraged to become employees. 
Hon MATT ROBSON (Deputy Leader—Progressive) 
: 
 National and ACT have complained that this bill did not have enough scrutiny. That is a strange comment to make when one puts it in contradistinction to the employment legislation that National introduced in the last decade which was detrimental to employees and then to the later legislation also detrimental to employees that ACT helped to rush through. The process on this bill has been very thorough and I think a tribute should be paid to Minister Wilson who has consulted widely with a range of groups. Much time has been spent to enable the coalition Government to bring the bill to this stage. It is a significant step forward in terms of holidays both in the clarification of entitlements and in making sure that the entitlements of workers and all employees are now far more just and fair than they were before. As a barrister who worked in employment law and saw the misery that was caused by the entanglement of the holiday legislation and the denial of employees’ rights particularly in areas such as sick leave bereavement leave and tangi leave I am very pleased that we have made this step forward in what are basic human rights for employees. 
I want to return the issue of 4 weeks’ leave and to state that there is an amendment here to put in 2005 as the starting date for 4 weeks’ leave. I am aware that that did not pass in the debate on the previous part Part 1. So if members have now had time to reflect on the basic fairness of that for employees and to come to a situation now where they will vote for it—I think that the Labour whips are thinking very hard about whether they will support this amendment now—we will be able to go back to it. Perhaps we can call the Leader of the House down to the Chamber as he would be very good at finding a way to make sure that Part 1 could be brought back up in relation to Part 2. So I ask members to think about that. 
Let me give members a quick story in the 3 minutes that I have left. I went to a school camp with my son. As a member of Parliament I am a little inflexible with regard to my time so I spent only the Thursday night there. I was very impressed with a man called William who came to the camp to spend the whole week with his 12-year-old son. To do that he took 1 week out of the 3 weeks’ leave that he has. Mr William has worked 11 years for the same company helping with its profitability—and that is another thing that National members should think of. They talk about money and investment but they should remember that money and investment are made by people who give their lives to a company and to an employer. Mr William has now used up 1 week of his 3 weeks’ leave. He cannot now spend that week with the rest of his family because it is gone. If he had 4 weeks’ leave of course he would still have 3 weeks to spend with his family. He has made a social investment in his son by going on that holiday with him by strengthening the bonds with his son and by encouraging him in his education. So I would like members to think of the Williams of this world who do that for their children and make that investment. Mr William has to wait until 2007—that is another 3 years away once this year has ended—before he will be at the stage where he is able to look forward to having that extra week and to being able to spend a week with his son while still having 3 weeks to spend with his family. So I ask members to think of people like him. That is a reason for voting for the 2005 date for the commencement of 4 weeks’ holiday. 
I support the Greens in their amendments. Some members may see that as a tactical alliance. I think there is a lot of sense in moving forward like that and I am pleased to add the Progressive votes to make it clear that the total bill is one that is supported by the two coalition partners in the Government. 
BRIAN CONNELL (National—Rakaia) 
: 
 I want to go straight to clause 36 and to deal with the 4 weeks’ holiday component. But before I do so I would like to ask Mr Robson why if his idea is so good he does not have the courage of his convictions and make his amendment apply from 2004. 
Hon Matt Robson 
: I raise a point of order Madam Chairperson. A member cannot be challenged for his or her courage. I am sure that is in the Standing Orders. 
The CHAIRPERSON (Ann Hartley) 
: No the member cannot be. 
BRIAN CONNELL 
: Well I suppose he can be but in this case I will not. The question I want to pose is this: was 4 weeks’ leave wanted by employees or was that just presumed? Was that just presumed and was the provision for 4 weeks’ leave the brainchild of the Government and its union buddies? I bet no one asked the employees. I bet no one asked them whether they wanted the money or the bag—the money or the holiday. I bet a good number of people would have said they wanted the money to pay their mortgage and the bills. But under what is being outlined here there will be absolutely no choice for the hardworking employees the workers of this country. 
How much will 4 weeks’ leave cost? I get a variety of answers to that question but it is somewhere between $700 million and $800 million. Who will pay for it? Business clearly will pay for some of it. In fact $708 million will be paid for by the private sector and in most cases that means small businesses—the mums and dads of this country. Can they afford it? The answer to that is clearly no. How will they get around the fact that they cannot afford it? They certainly will not employ other people. They will simply just have to work longer. 
Lindsay Tisch 
: They will retrench. 
BRIAN CONNELL 
: They will retrench but of more importance I think is the fact that the social implications of this bill have not been thought through. This situation has come about because of members like Mr Robson. He purports to be very employee friendly and I would have thought he would think it through. What this bill will result in is mums and dads working harder and longer and that means they will not be at home with the kids and with their partners. We will see more marriage break-ups more solo parents and more kids become involved in crime. That part of the cost has not been factored into anybody’s cost models—and it should have been. 
Workers will pay also. They will pay because as this cost is expensed by employees it will be done under the guise of wage freezes and reduced wage increases. Essentially we will see wage cuts and I bet no one asked employees whether they wanted that. That is the worst outcome for the people in this country who if we believe Mr Robson work the hardest and contribute the most. In fact what he had done is to consign them to experiencing a wage cap and I think Mr Robson should rethink that before his amendment is passed. 
I want to deal also with the issue of sick leave. Most employers whom I know do not deny sick leave to people who are genuine and I think that the people who are genuine are clearly and quickly worked out by employers. It is no mistake that employers have a jaundiced view of the people who always get sick on a Monday or a Friday or when there is a test match in town. If employees have a pattern of that type of sick leave I think it is only fair and reasonable that they are asked to present a doctor’s certificate to their employer who is entitled to have some assurance that they are genuinely sick. So I think that is only fair and reasonable. 
I am afraid I have to go back to the minority report of New Zealand First in the Transport and Industrial Relations Committee’s report on the bill as Mr Brown I am afraid is sending out quite conflicting signals. I want some clarity. I want the Committee to know that the minority report states that New Zealand First: “has major concerns with this Holidays Bill. In a nutshell New Zealand First believes it is flawed and so ‘business unfriendly’ that it will in circumstances be a disincentive to employ.” I do not know how the member can reconcile what has been said in the Chamber today with those types of statements. The member’s explanation I am afraid has been that his party will give this legislation a whirl as the New Zealand First members think it may be all right. I cannot wait— 
Peter Brown 
: I raise a point of order Madam Chairperson. I have no objection to this member quoting from our minority report or indeed from what I said. But I have never said we would give it a whirl and I— 
The CHAIRPERSON (Ann Hartley) 
: That is a debating point. 
Peter Brown 
: It’s not a debating point. 
The CHAIRPERSON (Ann Hartley) 
: It is a debating point. 
Peter Brown 
: It is not a debating point. The member cannot make things up. 
BRIAN CONNELL 
: I believe it is a matter of expression. The member was certainly giving rise to the view in this Chamber that New Zealand First will support this legislation. 
DAVID BENSON-POPE (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
Dr MURIEL NEWMAN (ACT) 
: 
 This bill is the bill that Treasury and the Department of Labour have estimated will cost this country $700 million a year. Clauses 15 to 65 are all about holidays sick leave and bereavement leave provisions. The bill in clarifying all those things is needed but the problem is that the workers the employers and the people of New Zealand do not actually need the bill in its present form. This bill is a fraud on the business community. The way that the whole of the 4 weeks’ holiday a year provision was introduced was sneaky. It was done by a back-door method using a member’s bill. That meant that when the whole idea of 4 weeks’ holiday was put before a select committee the submitters did not treat it as seriously as they could have because the Labour Government had given a pre-election promise that 4 weeks’ holiday a year would not be— 
The CHAIRPERSON (Ann Hartley) 
: I am sorry to interrupt the member but the time has come for the dinner break. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Dr MURIEL NEWMAN 
: This measure was brought to the Transport and Industrial Relations Committee in a fraudulent manner in that it came in as a member’s bill and the Government later picked it up. That meant the submitters on this bill did not have a chance to talk about the 4 weeks’ leave provision. 
Interestingly the Prime Minister did promise before the election that she would not bring in a provision for 4 weeks’ holiday a year but I guess the fact that we are now debating provision of 4 weeks’ holiday in this bill is just an indication that one cannot trust the Prime Minister—particularly a Prime Minister I suppose who forges paintings. It is a deceptive way to introduce changes to employment legislation. 
The reality is that right now with the different types of workplaces we have we need diversity in employment law. Today we have workers who want to start early and finish early and we have others in the same workplace who want to start late and finish late. There are others who want time off for school holidays and many people now are looking at the option of working from home. All of that tells us that the workplace is becoming more and more diverse and what we need is flexibility in labour laws—labour laws that allow negotiation and agreement between employers and employees. What we are doing right now is pass a bill that provides more prescriptive law and that really puts a straitjacket on any discussion and arrangement that can happen between employers and employee. This bill denies workers and employers the opportunity to sort out deals that are in the best interests of the workers and of the organisation. In other words instead of creating a win-win situation this type of legislation creates a lose-lose situation. 
I had a look at what some of the submitters were saying. They were horrified by the provisions in this bill particularly the 4 weeks’ holiday provision which was done in such a sneaky and dishonest manner and particularly given that the provision does not come into force for 3 years and 4 months for goodness’ sake—April 2007. But that is just long enough for Labour to use it to buy the next election. The submitters said that as a result of this legislation some of them would have to sell their businesses downsize their businesses or close their doors. They would increase their employment of part-time workers and casual workers and decrease their number of full-time workers. The employers would have to work longer hours—up to 16 hours a day. Of course the Labour Party members who are opposing what I am saying now do not know that because they have never owned or operated a business. The employers said that they would need to call in their families to open for fewer hours to have fewer customers to provide fewer services and to increase prices to provide for the extra costs. 
Overwhelmingly many employers said that what they would have to do as a result of this legislation was change the Government and get rid of the Labour Party. Well I totally agree with those sentiments. The Labour Government is passing laws simply to suit its union backers—the people who give it the money to be able to win elections. The union movement right now is simply after more power and more members. Or course we all know that there is a rake-off to the Labour Party for every member who joins the union. This bill is disgraceful. 
LINDSAY TISCH (National—Piako) 
: 
 I want to draw the Committee’s attention to clause 36A in new Subpart 1A “Entitlement to 4 weeks’ annual holidays from 1 April 2007”. The point that Muriel Newman has just made is that this provision has been put into this bill without any discussion or any referral to the Transport and Industrial Relations Committee. It is a straight-out bribe. It is an election bribe of a desperate Government. There was no opportunity for the select committee to hear this part of the legislation. This measure was not in the original bill. This has been taken over from a member’s bill. Incorporated into this bill is new Subpart 1A which provides for the entitlement of 4 weeks’ leave to take effect from 1 April 2007. 
The point I made in an earlier speech on the title identified the down time—the non-productive time—that an employer has to account for. An employee wants to be paid for 40 hours a week for 52 weeks of the year which is 2080 hours. I gave the example that on the current provision of 3 weeks’ annual leave and other entitlements the actual down time is about 280 hours. If one divides that by 40 hours per week it represents 7 weeks of non-productive time to an employer that an employee has advantage of. Under this new clause which takes the annual leave provision from 3 weeks or 15 days out to 4 weeks or 20 days that is another 40 hours of non-productive time in a business. That is 320 hours which equates to 8 weeks in a year that an employer has to carry that person on a full-time basis. The compliance costs of that are quite horrendous if we take into account what the business has to deal with—paying 4 weeks’ leave as opposed to making it a choice. 
Some employees do not want 4 weeks’ leave. In fact some surveys that have already been done in Auckland suggest that employees would rather be paid. The cost of living in Auckland is much greater than in the South Island. So in that case an employee would rather have 3 weeks’ holiday and be paid for the extra fourth week. In the South Island however there is an acceptance that 4 weeks’ leave may be appropriate. But what does this mean at the end of the day for the employee? It means two things. It will actually put a cap on future wage rises because someone has to pay. It is as simple as that. Who pays? It will be business that pays. Business will pay—not the Government. The Government is telling employees: “We are going to do this for you.” It wants to interfere in our lives. It thinks it knows best. But at the end of the day it is business that will have to pay so we will see a cap on wages. We will see a retrenchment. I have been talking to people in business and in some cases they are saying: “We are not going to expand our operations. We are going to just do what we can do.” 
I was dealing with a person who operates a fast food outlet in the Piako electorate. He has 53 staff and he has great difficulty getting people to work at the weekends. Under this provision—and the bereavement leave provisions which I want to talk about shortly—he is saying it will be absolutely impossible to be able to staff his sort of operation on a 7-day basis. So this measure actually affects employees. They are the ones who will be affected by this legislation. They will not be able to get increased cost of living rates. They will not be able to get the increased wages or salaries they are looking for because employers will put a cap on wages and reduce overtime provisions. What will probably happen is that employers will look to contract work out. Those are the sorts of things that this bill is starting to identify and which this Government has no concept of—absolutely no concept at all. It believes that it knows best. It is not prepared to let employers and employees work together to come up with a win-win situation. No it will not allow that to happen. What this Government wants to do because it knows best is legislate to impose these extra compliance costs on business. 
NANAIA MAHUTA (Labour—Tainui) 
: 
 I move  
That the question be now put 
. 
LINDSAY TISCH (National—Piako) 
: 
 I want to continue with clause 58 “Sick leave”. At the present time with the 5-day sick leave provision I would expect as an employer that if an employee were genuinely sick he or she would come up with a medical certificate to say that he or she could not be at work because of various reasons. That is fine I accept that. However this bill states that people have to produce a medical certificate only after 3 days. What will happen in the meantime? This will be the extended holiday because people will take advantage. We will never know whether they are genuinely sick. No one will ever know because it is only after 3 days that they will have to produce a doctor’s certificate. 
Clause 58(2) proposes a blanket 5-days’ sick leave per annum for every employee regardless of the number of days worked each week. This becomes inequitable. When representatives from Foodstuffs came before the select committee—a major employer with thousands of people working for them—they pointed out the inequities that will occur in this sort of provision. I would like the Minister to take a call on this and clarify what will happen with people who work part-time. They will receive a disproportionately high amount of sick leave for the days they work because this provision is a blanket 5-day sick leave provision. So full-time employees will get their 5 days but part-timers disproportionately will get a much higher figure. Some of the figures that were worked out show that part-timers who may have a number of jobs could effectively be entitled to up to about 25 days of sick leave a year if they happen to work for about five different employers. That is the sort of compliance cost that will be carried by business yet this Government does not acknowledge or recognise that fact. 
The second point I want to bring forward is the bereavement leave provision and that is found in clause 62. Clause 62 states quite clearly that bereavement leave can be taken under seven different categories and for up to 3 days. That does not mean 3 days per year; it actually means 3 days for anyone who suffers a bereavement under any one of those seven categories. Once again who will pay for this? I will tell members who will pay for it. The employers will have to pay and at the end of the day they will do three things. They will retrench they will not take on staff and they will put a cap on wages for those people who are there. Businesses cannot afford to carry this sort of compliance cost which will be open to abuse. 
I made a point earlier about a fast food outlet and this is another reason why that fast-food outlet operator cannot take the risk. He said: “I cannot afford to take the risk of people not turning up to work on a Saturday or Sunday because of this bereavement leave provision.” If it were 3 days per year that would be fine and acceptable. However this provision is not. It is open-ended—it is 3 days for anybody who falls into these seven categories. That is the sort of compliance-cost provision that is completely unacceptable. 
I want to go back to the point that I made earlier in relation to clause 46. Clause 46 states that an employer must pay an employee time and a half for working on a public holiday. Those who are involved in the entertainment business and the food industry have said that that will be a huge compliance cost. They do not mind paying penal rates but when they have to give employees a day off in lieu as well then members can imagine the sorts of costs that will be incurred. A lot of small businesses often open on statutory holidays just to provide a service. It is a service to the community and they are prepared to do that. However under this provision they will say: “Why should I bother?”. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
JOHN CARTER (National—Northland) 
: 
 I want to make a contribution in this debate and I want to do so for this reason. I have listened to the contributions made by a number of my colleagues and indeed a number of the other members who have spoken in this Committee and I want to take a little bit of a different angle on this debate from this perspective. 
We can talk about the individual impact this measure has on businesses as my good friend and colleague Lindsay Tisch has just explained. We can talk about the impact that it is likely to have on small businesses. For the many tourism operators and small businesses in Northland it will be devastating and will put a huge strain on them and some of them will struggle to survive. There is no question that a number of them will downsize and reduce staff as a consequence. Another outcome will be that a number of employees find they do not get wage increases over the next 3 or 4 years—we should not forget that this measure does not take place for 4 or 5 years. But what worries me about this whole aspect is that this measure is another cost in our society and on our economy. It is a cost right across our nation. We have to ask ourselves whether this country can afford this sort of cost at this time. 
The problem we have with this economy is that it still survives off two things. One is the primary sector primarily—our farmers foresters tourism operators and so on. They are the backbone of our country and that is an absolute fact of life whether or not we like it. The other thing that is driving our economy—when we look at what is happening with our economy we see that it is buoyant compared with those of a number of countries—is the building boom. That has been brought about because of a number of factors one of them being the immigration that we have had. 
Pansy Wong 
: A good thing. 
JOHN CARTER 
: Absolutely! Somewhere along the line when the Minister of Labour Helen Clark or the Government are considering these sorts of things they need to have a look at the total impact they have on our country’s whole economy. I wonder whether the Minister can tell us whether she has contemplated what sort of impact this measure will have on the whole of the economy and whether it will drive some more productivity into it. Will it actually result in a benefit to our country or will it be seen as a negative? Will businesses and the whole sector that actually produces income for this country benefit or will it become a barrier? While I accept that there may be an argument that perhaps the workers themselves will feel better off if they have an extra week’s leave there is a cost to them because they have to be able to afford that week for a start. 
That is the first thing. The second thing is what happens to those businesses that are expected to be productive and produce the goods that we sell and trade overseas to earn income for our country so that we can pay for these things. I wonder whether the Minister is able to give us any facts and figures on the negative impact that it is likely to have on our productivity level. I doubt whether that has been done at all. This whole bill has been driven by Matt Robson and a minor party that is now so minor that it often does not even have a presence in Parliament. Worse and for some reason that we do not know a promise that was made prior to the election that there would not be 4 weeks’ holiday has now been broken and that is now to be implemented. My having said that it is a bit smoke and mirrors because we are 4 or 5 years away from anyone being a recipient of it. In the meantime why can people not negotiate 4 weeks’ holidays if that is what they want? If they are good enough and have the skills and the background of course they will be able to negotiate it with the employers. 
But I come back to the simple theme of my 5-minute contribution and make this point: can we be sure that the country will benefit as a consequence of 4 weeks’ leave being put in? We know there will be some individuals who benefit from it because people will get an extra week’s holiday and that is fair enough. But overall it is more than likely that this provision will be a negative not a positive. There is the argument that people will be more productive because they are more relaxed and so on but I doubt it. 
Hon DAMIEN O'CONNOR (Minister for Racing) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 61 
New Zealand Labour 52; Green Party 9. 
Noes 55 
New Zealand National 27; New Zealand First 13; ACT New Zealand 6; United Future 8; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 177 in the name of the Hon Margaret Wilson to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 74 
New Zealand Labour 52; New Zealand First 13; Green Party 9. 
Noes 42 
New Zealand National 27; ACT New Zealand 6; United Future 8; Independent: Awatere Huata. 
Amendments agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 174 in the name of the Hon Matt Robson to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 9 
Green Party 9. 
Noes 107 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; ACT New Zealand 6; United Future 8; Independent: Awatere Huata. 
Amendments not agreed to. 
The question was put that the following amendment in the name of Sue Bradford to clause 46 be agreed to: 
to omit from subclause (1) the words “the time actually worked on the day” and substitute the words “the hours ordinarily worked on the day”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 9 
Green Party 9. 
Noes 107 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; ACT New Zealand 6; United Future 8; Independent: Awatere Huata. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Sue Bradford to clause 61 be agreed to: 
to omit from subclause (1) the words “for a period of 3 or more consecutive calendar days” and substitute the words “for a period of 5 or more consecutive working days”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 9 
Green Party 9. 
Noes 107 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; ACT New Zealand 6; United Future 8; Independent: Awatere Huata. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 74 
New Zealand Labour 52; New Zealand First 13; Green Party 9. 
Noes 42 
New Zealand National 27; ACT New Zealand 6; United Future 8; Independent: Awatere Huata. 
Part 2 as amended agreed to. 
Part 3 Enforcement and other matters 
BRIAN CONNELL (National—Rakaia) 
: 
 I am pleased to be able to make another contribution to this debate and just to kick off this part I want to develop a theme of trust. I ask members of this House how they can trust this Government. When the Prime Minister and members of her caucus travelled the length and the breadth of this country and were asked whether they would introduce legislation into the House that gave employees precisely 4 weeks’ holiday their answer was no they would not. 
Hon David Carter 
: It was dependent on the audience—they said that to the employers. 
BRIAN CONNELL 
: Mr Carter is quite right. I thank him for the clarification—that is when they were talking to business audiences. The Government will rue the day it said it would not do this— 
Opposition member 
: They were telling lies. 
BRIAN CONNELL 
: I do not want to use that word. It is not very parliamentary but I agree that it does rhyme with “flies”. The point that really concerns me is that the Prime Minister Mr Cullen and Mr Maharey said that they would not introduce this type of legislation and the business people of this country took them at their word. Will the business people of this country ever trust them again? I bet they will not. They will not trust the Prime Minister Michael Cullen Steve Maharey or any of them. 
The other thing that concerns me also—and I speak about trust—is the issue of enforcement around sick leave—5 days. My experience is that a good contract is one that gathers dust. Good employers and good employees work together. Only when there is an abuse of that trust do those types of contracts ever come out of the bottom drawer and the dust has to be blown off them. That type of trust cannot be legislated for. What is more important is the spirit in which those individuals are working together. 
I now turn to clause 67 and look at who can enforce the Act and we now get down to the crux of what this legislation is all about. It is union muscle that is putting pressure on this Government. The people who can enforce the Act are an employee an authorised representative a representative of a union of which the employee is a member—and that really gets down to the heart of it does it not—and a labour inspector. The way I read this legislation a labour inspector is code for labour police. Labour inspectors will be asked to mediate on a contract that they have absolutely no knowledge of. How can they do justice to that? They will know very little about the business they will be asked to mediate on. They will not know anything about the circumstances of that business or the spirit in which those employment contracts were constructed. Yet inspectors will come in and have more power than the Gestapo more power than the police and it will result in an abuse of power. 
I warn the Government that the business sector will react. This Government will rue the day it went around the countryside saying it would not do that but at every turn it has done the opposite. There is a word for that and it rhymes with “flies”. This is something the business people of this country will not forget. 
I turn to clause 68 “Penalty for non-compliance”. Some of these provisions are so punitive. An employer who is an individual is liable to a penalty not exceeding $5000. An employer that is a company or other body corporate is liable to a penalty not exceeding $10000. The imposition of such a penalty will simply drive a number of businesses out of business. The worst possible outcome and the thing that will really hurt employees is that employers will become risk-averse. This type of legislation will make employers think that it is not worth taking the risk of employing people of mortgaging their homes and taking risks to expand their business. 
The CHAIRPERSON (Hon Clem Simich) 
: I call the Hon David Carter. 
Jill Pettis 
: This is the graveyard gang! 
Hon DAVID CARTER (National) 
: 
 Do not be ridiculous. When I look at Part 3 my thoughts go to small-business people who are operating on their own who are overworked and are perhaps thinking of employing staff for the first time. If anybody was thinking of making that decision and turned to Part 3 I suspect that person would be immediately alarmed and concerned about whether it was worth taking on that extra employee. In looking at some of the penalties for non-compliance most new employers would think twice about taking the opportunity of giving a fellow New Zealander a job. What has struck me about the debate as we move to Part 3 and about the earlier parts of the debate is that Labour members on the other side of the House all have one thing in common—none of them has ever employed anybody in their lives. 
Hon Damien O'Connor 
: Don’t tell lies. 
Hon DAVID CARTER 
: None of them has ever employed anybody. 
Hon Damien O'Connor 
: Don’t tell lies. 
Hon DAVID CARTER 
: Damien O’Connor is interjecting and saying that I am telling lies. Lianne Dalziel was a union employee before she came here—unions are well represented in this legislation but have never employed anybody. Margaret Wilson the architect of the legislation used to be a law lecturer. She has never employed anybody in her life. Now she is waving her hands acknowledging that she has never employed anybody. That is evident when one looks at the sorts of impositions and penalties this bill imposes on people who might be thinking of employing somebody. 
The other thing that struck me as I considered Part 3 is that because these Labour Party members of Parliament have never been employers they do not appreciate that most businesses know that their biggest asset is their staff. The biggest asset a business in this country has is the people who work for it. So why would an employer go out of his or her way to damage that substantial asset? The truth is that in most cases employers do not do that but sadly on slim occasions we get a bad employer. 
Brian Connell 
: Very bad. 
Hon DAVID CARTER 
: Very bad but it is rare because why would somebody go out of his or her way to be a bad employer? It just does not happen very often. But this legislation is designed to marshal everybody in just in case there is a rogue employer out there. There are penalties for non-compliance—for example $5000 if an employer does not write down when an employee took bereavement leave. If an employer happens to corporatise—and more than likely the person will have done that because it is a very easy way to dodge the 39c tax rate—and dodged the huge compliance costs imposed by this unfriendly-to-business Labour Government he or she will cop another substantial penalty if this employment law is breached. If it is a company it will be fined $10000 because the employer perhaps neglected to record correctly when an employee took some annual holidays. 
The other thing that strikes me about this legislation is whether the Government is sincere in trying to create an economy that will get New Zealand back into the top half of the OECD. When we look at the Holidays Bill and in particular Part 3 we see that it does not do much to make it easier for this country to grow. I see that United Future agrees with that comment. The bill provides for 5 days’ sick leave 11 statutory holidays and 3 days’ bereavement leave—all of which adds up to 8 weeks in any year. 
PANSY WONG (National) 
: 
 Part 3 of the Holidays Bill deals with enforcement and other matters. So it is about enforcing the legislation and setting out who does what. But how will Department of Labour inspectors be able to go out and enforce the legislation when their political masters are lacking discipline? Let us examine this point. The Hon Roger Sowry put a question to the Hon Steve Maharey as to why Labour had continued to say it would not be introducing the legislation in this term in office. Steve Maharey said that Labour did not think employers at this time were in a position to take on 4 weeks’ annual leave in addition to other changes in their environment. How can employees of a Government department set out to enforce the provisions of the holidays legislation when they know that their political masters are a bunch of people who do not know how to tell the truth? 
Hon Lianne Dalziel 
: How many employees would that member have? 
PANSY WONG 
: I invite the chatty Minister of Immigration to take a call and have her say instead of chipping away. If Government members have something worthwhile to say they should take a call and use their own time. 
Let us come back to the Holidays Bill. I looked through Part 3 and tried to find out whether when the inspectors from the Department of Labour go into places to inspect records etc. they will also enforce the provision that employees who continuously take sick leave—for more than 3 days—should provide a medical certificate. Where is the level playing field? I understood that this legislation was supposed to be conducted in good faith. We have heard an abundance of comments from Labour members but they have never trusted employers because as my capable colleagues—like the Hon David Carter—have pointed out they have never been one! So the Government does not know how employers actually behave. All that it has are those very out-of-date employer-employee barriers—that is they do not trust each other. I would like the Minister of Labour Margaret Wilson to take a call and say whether the enforcement provision would be carried out even-handedly on both parties: both on employers who carry out their obligations in good faith and on employees who for their part also have to oblige. 
I move to the provisions about enforcement and other matters in Part 3. I would like the Minister to take a call and reassure the public that the minority Labour Government believes that the enforcement of this legislation will lead to economic growth. The Rt Hon Prime Minister who said that she would always tell the truth be transparent and have integrity promised that the Labour Government would return New Zealand to the top half of the OECD. I invite the Minister to take a call and say whether the enforcement of this holidays legislation will assist New Zealand on to the path back to the top half of the OECD. Of course we would also like the Minister to answer some questions as to how many additional inspectors will be employed in order to visit all the workplaces and check on holiday records. 
JOHN KEY (National—Helensville) 
: 
 Before I start on Part 3 of the Holidays Bill I say that it is quite sad that this legislation which aims to have a work-life balance for New Zealanders will come at such a significant price to those New Zealanders who can least afford to pay the bill. I could argue that the Government is writing cheques that the poorest-paid New Zealanders cannot afford to cash. That manifests itself most in Part 3 when we see the holiday and leave record that must be kept. That record will be longer than it would have been had the provision for 4 weeks’ holiday not been slipped into this legislation in such a covert and an underhand way. I find it rather sad that those who most need to have a work-life balance and a higher level of income so that they can provide for their families are being dictated to by this Government which states they must have an extra week’s holiday. 
Before I go too much further I want to say that the New Zealand First member Mr Peter Brown made a statement in his speech earlier to the Committee that in his opinion New Zealanders would not be able to enjoy higher wages and that they could not effectively achieve productivity growth. He argued that therefore the bone that the Government was throwing them—the fourth week—was about as good as it could get and that on that basis they should support it. That is a hopeless attitude for any member of Parliament to have. Frankly it is nothing short of a disgrace. I for one believe that New Zealanders can achieve higher standards of living. I simply point out to Mr Brown that between 1970 and 1990 New Zealand had 0.5 percent per capita growth because we had all the wrong policies driving our country in the greater part. Between 1990 and 2001 we have grown at above the OECD average of about 2.5 percent. This legislation is a retrograde step. It is an anti-business anti-growth step that will not deliver opportunities and higher wages. 
As Part 3 quite clearly points out what this legislation will deliver is a holiday record that will have to be filled out. Under this Government it will be a longer record than it would otherwise have been. What an unfortunate record it will be. When at the end of their second term in 2005 all five Labour members sit on the Opposition benches and huddle in their caucus and when they look back and ask themselves what went wrong and what the Armageddon was that took the once-popular Labour Government and dispatched it to become nothing more than a minority party that could hold its caucus in the back of an MX5 one of the things they will look back to will be this very anti-growth Holidays Bill. 
I want to spend a moment on clause 73(2)(f) which provides for payment. Members who have taken the time to traverse the important aspects of this bill will know that in both clauses 7 and 45 the topic of ordinary pay is raised. One of the things that came up in the Transport and Industrial Relations Committee that we noted in particular was that under the previous National Government when freedom was put back into the labour markets it was very possible for employers and employees to sit around the table and in a spirit of cooperation nut out a fair definition of ordinary pay by saying to one another that there were times when there was a bit of give and a bit of take—a bit of ying and a bit of yang—and coming to agreement on an overall wage rate that could be used. They did not do that in the expectation that the current Government would come along and argue that that would be the rate of pay applied to time and a half for holiday payments on a statutory holiday. As we heard from the restaurant industry that will signal the death knell for many small restaurants in our country which will not be able to afford to operate because they will be paying time and a half and granting a day in lieu. 
STEPHEN FRANKS (ACT) 
: 
 I rise on behalf of the ACT party to speak on Part 3 of the Holidays Bill. This is the bill that was supposed to make the calculation of holiday pay and the arrangements between employers and employees simple easy to understand and what they would have expected if asked—in other words intuitive. 
Part 3 deals with penalties and enforcement. I will go quickly though the points that I see there. I did not sit through the select committee process for which I am thankful when I read that report but I will look at it as I imagine an employer an accounts clerk a wages clerk or human resources coach—as they are now called—would in trying to work out what it is they must do. First clause 66 is yet another imposition of pain-in-the-neck explanation that the diligent employer will have to make. Subclause (2) states that when “an employee enters into an employment agreement with an employer the employer must inform the employee—(a) about his or her entitlements under this Act;” We do not know how much has to be done there. 
If this legislation was really just recording the standard assumptions and the general knowledge that everyone has—the folklore as it were—about holiday pay it would be superfluous. If this legislation was really trying to facilitate employment and trying to help the marginal employers—the ones who could well provide a job as long as it is not too much trouble for them—it would be trying to avoid the formalities accompanying employment. It would be trying to ensure that employers who are not all that sophisticated do not worry about the pitfalls—about what they had not done. When I look at the penalty provision I see that that was maybe recognised by the select committee because it has omitted as far as I can see a penalty for a breach of clause 66. What kind of obligation is it when there is no penalty? Is the provision there just to be educative? Is that what its purpose is? Is it more of this law that is not really law—more of just slogans? I cannot tell. 
 As I look also at the arrangement clause 66 reminds me of just how much complication destroys employment. The emergence of labour contractors and human resource managers and the outsourcing of consultants is probably a reflection of what the Hon Margaret Wilson has done to employment law. People who would otherwise have a direct relationship with employees will have to employ middlemen to control and deal with their employees because they simply cannot run the record-keeping that is required. Just the holiday record-keeping clause—just the amount that has to be kept by the employer for holiday and leave records—has subclauses (a) (b) (ba) (c) (ca) (d) (e) right through to (ga) and (gb) and right through to (m). That is the number of particulars that must be kept just about holidays bereavement and sick leave. What do we find that the penalties are? They are $5000 for an employer who is an individual and $10000 for a corporate that fails to comply with these provisions. 
I have noticed something possibly more significant for which there seems to be no penalty. No penalty is provided for breaches of clauses 28 to 33 and those are the clauses that deal with these complicated arrangements for statutory holidays. There seems to be no expectation of enforcement. I can hardly believe it—there must be general enforcement powers somewhere else and perhaps the Minister can explain it. This detailed prescription of when a company can close down and require everyone to take annual leave at one time of the year seems to have no parallel enforcement provisions. That might be material. It might be that this is the saving loophole that employers are looking for. It seems that the Minister the Hon Margaret Wilson decided that it was not appropriate for example for an employer to keep a skeleton staff going at a plant. Clause 28 which I thought would have an enforcement provision in Part 3 states that one can have a closedown period. 
LINDSAY TISCH (National—Piako) 
: 
 I want to move to clause 77. This clause is about employment conditions if an employee is dismissed and re-employed within 1 month. The question that arises—and I ask the Minister to seriously consider what I am saying and what I would like clarification on—is this: if somebody is on a fixed-term contract and the contract finishes then within the 1-month period that person who was on a fixed-term contract is re-employed by that particular firm is that regarded as continuous employment? I do not know the answer to this and that is why I am asking the Minister. If somebody is on a fixed-term contract—and a lot of firms have fixed-term contracts because they do not know whether there will be continuity of work in the long term—and that contract finishes is that deemed to be a dismissal if within the 1-month period identified in clause 77 that person is then re-employed by that particular firm? Is that regarded as continuous employment under clause 77? I say to the Minister that it is a genuine question. A lot of businesses will want to know the answer to it. What is suggested in clause 77 presupposes that that is the case and the extra costs associated with it and the extra provisions that a firm will have to go through could be quite horrendous. That is the first part of clause 77. 
The second matter that I want to bring to members’ attention concerns the situation where there are casual or temporary employees. That is deemed to be similar to a fixed-term contract because they are taken on for a certain period on a casual or a temporary basis. The employer does that because there is not ongoing work or because of their skills or whatever the reason is for wanting to be able to use those people only for a fixed term. I would consider those people to be similar to those on a fixed-term contract. Does clause 77 apply to them? The Minister has advisers with her this evening. It is a very simple question that I am asking. I would like some clarification as to my understanding of what clause 77 means. Clause 77 will affect a lot of businesses and I believe that we need to know what it means so we can pass that information over to them. 
I want to look in particular at clause 71 “Powers of Labour Inspector”. I will not read it out. The labour inspector’s powers are quite immense. Clause 72 states the extent to which the labour inspector can go. I draw members’ attention to the subset of clauses that I mentioned briefly in an earlier speech and to clause 8A(2)—and this is in Part 1 so we are going back to the implication that clause 72 has—in particular which states: “A Labour Inspector may determine the amount of the employee’s ordinary weekly pay or relevant daily pay as the case may be.” What extraordinary powers the labour inspector has! I do not know of any other business where a labour inspector could determine what the weekly pay would be. 
Opposition member 
: Labour police. 
LINDSAY TISCH 
: That is it—the member has said it—and that is what it says. The clause states: “A Labour Inspector may determine the amount of the employee’s ordinary weekly pay or relevant daily pay as the case may be.” The same applies in clause 8C which determines the working-day. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
Dr MURIEL NEWMAN (ACT) 
: 
 I rise on behalf of the ACT party to talk on Part 3 of the Holidays Bill. This is the part that talks about provisions for employers who do not follow the guidelines properly. I would like to start by reminding members that the bill is estimated to cost $700 million to the economy. Recently a business group worked out that the costs imposed on small business by this Government are something like $43000 a year. That is $43000 in extra compliance costs per year for medium-sized small business. A lot of that estimated cost will be caused by the provisions in the Holidays Bill. I say to the Government that for some small businesses this bill will be the straw that breaks the camel’s back. It will be the final piece of legislation from this Government that makes small-business owners say: “I’m just going to close my doors I can’t be bothered any more.” 
Almost every day this Labour Government is making the cost of doing business in New Zealand higher. That is so stupid because we have a more competitive marketplace. As a nation we are in a more competitive global market and this Government should be making it easier to do business and less costly to do business so that New Zealand businesses can be more productive and more profitable. This Government is doing exactly the opposite. Because small businesses have had all the new employment laws and all the other costs shoved on their shoulders they have to hire extra advisers. They have to hire extra employees to help them go through the plethora of new regulations they have to deal with. All of that increases the cost to business which in many cases is passed on to the consumer. So ordinary mum and dad Kiwis find that their pay packets just do not go as far these days as they did before Labour members got their hands on the levers of power in this country. 
Did the Labour Government worry about the concerns of the submitters? I say that it did not. Here are some quotations from some of the small-business people who submitted to the Transport and Industrial Relations Committee: “Small to medium business will not survive if this bill gets put into action.”; “will definitely have to cut staff.”; “This Government is making it tougher and tougher for businesses to keep going.”; “will have to hire more casual staff. We won’t be able to keep permanent staff on.”; “We will close on most statutory days.”; “Why has this Government got such a bad attitude towards business?”; and “This legislation obviously has been proposed by idiots. It will be inflationary and it will cause prices to go up.” When they were talking about the actual provisions for sick leave they said: “There is no need for a doctor’s certificate.” and “It will definitely lead to an abuse of this provision for sick leave.” Submitters are telling the Government that they think it will be tougher for small business but the Government members on the committee obviously took no notice. 
One of the submitters said: “The paperwork is now a nightmare.” I want to talk for a moment about the fact that the Government is now requiring employers to make detailed holiday and leave records with far more specific information than has ever been needed in the past and if they do not do it properly and the employee later brings proceedings then there is a good chance that the employer will end up being fined and it will be more costly on him or her. I make a note of clause 68 “Penalty for non-compliance” which states that if an employer fails to comply with all the provisions in this bill which are huge then the employer can be fined—up to $5000 if the employer is an individual and up to $10000 if the employer is a company. But of course that does not rule out all the other penalty rates under the Employment Relations Authority or the Employment Court. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the question be now put 
. 
LINDSAY TISCH (National—Piako) 
: 
 I want to continue along the same lines of my earlier speech relating to clause 72. As I mentioned at the time this clause gives powers to the labour inspector that— 
Hon Member 
: That would be a good job for the member. 
LINDSAY TISCH 
: I would not want to be a labour inspector. I have better things to do. I do not want that sort of job. I want a real job—a job that adds value and productivity—not a job as a Government stooge which is what that member is suggesting. I have better things to do with my time. 
I want to point out exactly what these labour inspectors will do because they have immense powers—huge powers. Clause 72 identifies some subclauses that I want to go back to. In the debate on Part 1 I mentioned clause 8A(2) which states what powers a labour inspector has. He or she can determine the amount of an employee’s ordinary weekly pay or relevant daily pay as the case may be. That is an immense power given to labour inspectors under that clause. 
The provision I now want to bring to the Committee’s attention is one that has not been mentioned in the debate—clause 8C(2): “A Labour Inspector may determine whether the day would otherwise be a working-day for the employee.” Under that clause it is not the employer—the person who pays the wages pays the salaries and carries the can—who determines whether an employee is to work on that day and whether it is a working-day; it is the labour inspector who will determine whether the day would otherwise be a working-day for the employee. It is a complete and utter nonsense that a third party will determine the working-day. Not only that the inspector will also be in a position to determine the ordinary weekly pay or the relevant daily pay. 
National is opposing that sort of absolute nonsense prescribed in this bill because it adds absolutely no value or credibility to the workplace. The people who will be affected by it are the employees. The employees are the losers with this sort of nonsense because employers will say they will not be part of it. They will retrench sell out downsize and contract work out because the paperwork and the way that labour inspectors will be able to walk in and determine the daily pay rate are an absolute nonsense in the real world. But of course this Government would not know what the real world is because it has never been part of it. Its members have never been involved in that area. 
I also want to draw the Committee’s attention to the penalties regime under clause 68 which has been mentioned before by other members. The huge compliance associated with this clause—because the bill is so full of prescriptive detail—will be difficult to comply with. Many small-business employers will not understand the complexities of all the issues prescribed in the bill so they will be prime targets in terms of being hit with the fees that come under clause 68. Subclause (1) states that if an employer is an individual he or she is liable to a penalty not exceeding $5000—if the paperwork is not done if the book for leave provision for sick leave bereavement leave or whatever is not kept. Is not that just great for individuals sole traders or people working on their own working their hearts out to make ends meet and make a dollar so they can grow their business and employ somebody when at the end of the day if they get it wrong or make a mistake they are in for a fine of $5000. Then if the employer happens to be a company—and most will be companies because in the marketplace at the moment small businesses are forming companies to get around the obnoxious 39 percent tax rate— 
Hon Lianne Dalziel 
: Ha ha! 
LINDSAY TISCH 
: The member over there laughs but her party would not know what actually makes business work. If a company is formed the tax rate is 33 percent—and this clause states that that company would be fined $10000 if it fails to comply. 
JILL PETTIS (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 177 in the name of the Hon Margaret Wilson to Part 3 be agreed to. 
A party vote was called for on the question That  
the amendments be agreed to 
Ayes 74 
New Zealand Labour 52; New Zealand First 13; Green Party 9. 
Noes 43 
New Zealand National 27; ACT New Zealand 7; United Future 8; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 3 as amended be agreed to. 
Ayes 74 
New Zealand Labour 52; New Zealand First 13; Green Party 9. 
Noes 43 
New Zealand National 27; ACT New Zealand 7; United Future 8; Independent: Awatere Huata. 
Part 3 as amended agreed to. 
Schedules 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 I rise to speak on behalf of the National Party which is opposed to the schedules and to the whole bill and there is a very good reason for that. Why is it that the socialists cannot understand that they keep dumping on business the way they do and expect business to prosper? Why is it? That is a simple question. Why is it that they just cannot answer that question? Because they do not know the answer themselves. That is the reason—they do not know what makes business work. 
When one looks at schedule 1 of the bill and sees that the Employment Relations Act 2000 will be amended in respect of the Holidays Act 1981 and the Holidays Amendment Act 1991—so much of the schedules of that Act as relate to the Holidays Act and the Holidays Amendment Act will be repealed—one begins to understand the answer to that question. That is where the true answer will be found. The true answer is that those members have no idea at all what they are doing. They have no idea that this country unlike any other country in the world is made up of a majority of small businesses. There are a few large ones but the majority are small businesses. They are the mums dads and “Joe hard workers” out there who will take a bit of a risk and take on a lower socio-economic or unskilled person and give them a break and the Labour Party the very party they believe will protect them is going to dump on them. 
What we have in the schedules of the Holidays Bill is a wage freeze in disguise. What do members think will happen over the next few years with wages? Will they go up? Perhaps the Minister in the chair will tell me. Will they go up? Will this bill encourage wage increases for low-paid workers—yes or no? Well there is silence from the other side of the Chamber and I am sure they will not take a call on that. Now Treasury has done some work on this and it decided that there is the potential for $800 million more costs to business—or to somebody. Where will those costs fall? There is $800 million worth of costs in this legislation and it is covered in the schedules. When we look through the schedules we can see how that will happen. How is it that the Labour Government cannot understand that if $800 million worth of cost is added somebody has to pay? The Labour Government thinks that businesses have bottomless pockets. It thinks that businesses will just pay it and that will be the end of that. What this Government does not understand is that the majority of that money will probably come from that mum dad or “Joe hard worker” out there who is struggling to make ends meet. That is the bit that really has me wondering what it is that motivates the people on the other side of the Chamber. I just cannot understand it. It is beyond me. 
Let us talk about one of the larger businesses in this country the dairy industry—which I began to talk about just before the dinner break. I want to talk about the development of the largest dairy product manufacturing business in the world which is located in Hawera in the electorate of the member for Whanganui. It is the largest single dairy manufacturing business and one of the most efficient in the world. That powder plant which produces 20 tonnes an hour at peak was built on time to cost and if it had not been the industry would not have proceeded. Why was that able to happen? Because there were flexible employment laws at the time. That manufacturer the Stork plant is a Dutch company and when the Dutch Prime Minister opened the plant with the Prime Minister of New Zealand he said that was the case—that that was the reason the plant was able to be imported into New Zealand manufactured and put in place on time and to price. It now produces 20 percent of this country’s export earnings. I hear the member opposite rabbiting on. She can take a call and explain why she disagrees with me. The reality is that that was how it was achieved and that is what the Dutch Prime Minister said. When I look at the schedules and at the bill in total I have to ask how this legislation will enhance that type of development. How will this bill help those who work in that plant and are on shift work have independently negotiated contracts enjoy good standards and have more than the average leave entitlements already because they have been negotiated in their contracts? How will this bill help them—and will it help them? Will it help them or hinder them? 
Hon Lianne Dalziel 
: How many weeks’ holiday is that member going to have? 
SHANE ARDERN 
: The Minister is carping on about how many holidays I will have. When I go home from Parliament I go home to run the farm to help to pay the taxes that the Government squanders in this type of silly legislation. The interesting point is that this bill is designed around the notion that there is to be a work-life balance. What does that mean? 
JOHN KEY (National—Helensville) 
: 
 I want to reflect on the schedules but before I do so I want to say that we have heard quite a lot of discussion about the impact that holidays will have particularly the 4 weeks’ leave that were sneaked into the bill through quite an underhand and appalling manner. The employers of New Zealand were told one thing then lo and behold the Holidays Bill delivers something else and the result of that action is clear in schedules 1 and 2. 
One of the great tragedies of this legislation is that lower-paid workers and workers who are looking for their first opportunity in the workforce—young people who are eager and keen—do not want 4 weeks’ holiday. The nanny State is telling them they want 4 weeks’ leave but they want the opportunity and they want the money. Equally if we ask people whether they want 4 weeks’ holiday or whether they want more money so they can provide better quality for their families afford to put more food on the table send little Jimmy to the holiday camp that he wants to go to or buy him a new wave thing he can take down to the beach or to enjoy some of the finer things in life I suggest they would not argue that they want 4 weeks. 
This provision is simply a cost that the country cannot afford. The Government has tried to fob off that argument by saying the cost is $350 million. The Government thinks that if it says that figure quickly it will not add up to much. However we know through the diligent work of the National Party that the cost is $800 million and in fact it could be even more than that. What we will actually see will not be a whole lot of people getting 4 weeks’ holiday—although some people will get 4 weeks—but two classes of citizen emerging and I predict that one of them will be those who own businesses. Some of the people who currently own businesses will simply give up the ghost. They are sick of hearing from John Tamihere the Minister for Small Business telling them that Labour will do things for small businesses in New Zealand. He may be trying to cut the odd thing here or do the odd thing there but then they get delivered this. They get delivered the killer blow—4 weeks’ holiday. Many small businesses came and saw us and said they simply could not afford to deal with this kind of legislation. They said they could not afford to pay time and a half and a day in lieu and all the things that are contained in the schedules. They said they simply would not be able to operate. What is that going to do for those people? Secondly let us think about it from this perspective. Many small businesses employ fewer than five people. When they have to give this additional week’s holiday what are they going to do? I will tell members what will happen. Employers will in fact have to work to cover that time. They cannot employ somebody else and if they have a couple of employees— 
Jill Pettis 
: What do they do now? 
JOHN KEY 
: Now they can share the load. But when employees take 4 weeks’ holiday the employers will be taking no holiday so where is the work-life balance for the entrepreneurs? So what does this Government tell us? It parades up and down the country telling people that it is into entrepreneurship and it wants to foster the entrepreneurial spirit and the “can-do” Kiwi attitude. Then as soon as some hard-working New Zealanders go out there and borrow a bit of money to put together a business they get socked in the teeth with this socialistic nanny State garbage that should either be used as a doorstop or as something to light the barbecue with at Christmas time. It should not be used for what it is going to be used and that is to deliver a poverty trap and unemployment to poor hard-working New Zealanders. Their Christmas present the delivery à la the Labour Party will be unemployment. That is what will happen. They are not going to get a pay rise delivered by schedule 2 they are not going to get 4 weeks’ holiday—they are going to get 52 weeks’ holiday. That is what will happen as a result of this so no one should be conned into believing that this is in fact some great wonderful thing that has been brought off. So often in this Chamber we have heard Australia held up as a place that can afford and has 4 weeks’ holiday. There are two reasons for that. Firstly it is a richer nation than we are and its Government is smaller than ours is. Secondly I would argue very strongly that people who are looking at Australia are looking in the wrong direction. They should go and have a look at the United States of America which has a minimum of 2 weeks’ holiday a year and the economic prosperity in the US is so much greater than New Zealand’s. 
Dr MURIEL NEWMAN (ACT) 
: 
 How bizarre it is to be speaking on a bill that has an enactment date of 1 April 2007. It is like going back to the future. The enactment date of this bill when these schedules get modified and these Acts of Parliament have to be changed is 3 years and 4 months away. Of course the most important thing about the 3 years and 4 months is that we have a general election in the middle of that. So this will be a major plank of Labour’s election campaign—“Vote for us so you get 4 weeks’ holiday a year.” I would have thought that any responsible Government passed legislation to help this country to do better and all the advice that was given to the select committee said that this particular bill is anti-business anti-growth and anti-employment. Under this bill there will be a lot of New Zealanders who will not get jobs in the future. Already we have read from some of the submitters—these are small businesses the backbone of any economy the engine room of this country—who overwhelmingly said: “We will not be able to employ staff we will have to do more ourselves and if we do use staff we will have to use more casual staff.” That is the worst type of law to pass in this country where the workforce will become more and more casualised because the employers cannot take the risk of hiring permanent full-time workers. What will that do to the long-term stability of families? It is actually anti-family legislation because if the dad or the mum in the family does not have a permanent stable full-time job then all the choices that family makes become more risky. 
 The submitters I would like to quote from say in particular that they will employ fewer staff that they will use more casual staff and that the bill has been written by people with very limited vision. In particular I quote from a small-business man who says: “I can’t see anything for employers and definitely no incentive to remain in a business where you are trying to break even but getting hit by more costs.” We have already heard in this debate that the average compliance costs that this Government has put on to a medium-sized small business have been something like $43000 extra per year. A major proportion of those costs will be the added costs of this Holidays Bill. This bill is taking choices away from employers and employees. Again we have heard in this debate that many employees say they would like to have more money and that they would like to work as many hours as the employer can give them. They say that they do not need holidays because right now more money is what is driving their goals and their choices. Under this bill employers will not be able to negotiate that sort of deal with their employees. 
Before I came into Parliament I worked in a company that employed 1000 staff. Over the Christmas period many of those staff wanted the money. They wanted as much of the extra time as they could get. They did not need the holidays whereas we had other staff with young families who wanted the holidays. It was a great position for both the employees and the employer to be in to be able to try to satisfy all of their needs. This bill takes away those choices. The Labour Government should be ashamed of doing that because the workplace demands more flexibility today than ever before. The demands on business are tougher now than they ever have been before and this Labour Government is putting employees and employers into straitjackets. I think that is absolutely disgraceful because ultimately it will lead to lower productivity and that will mean a lower standard of living for New Zealanders. This bill is being driven by the unions. The Labour Party has fallen into bed with the unions and it is now putting through a bill that will not take effect until 2007. 
Hon ROGER SOWRY (National) 
: 
 As National’s industrial relations spokesperson I have just come from a meeting in the eastern suburbs that I am sure the Committee would be keen to hear about. Employers at the meeting were thankful that the Government has given them until 2007 before the 4 weeks’ leave comes in. They have calculated that the total cost of this bill is about a 3 percent increase in their payroll costs and they have three wage rounds in which to claw that 3 percent back. In those three wage rounds instead of paying what they would have paid it will be 0.5 percent or 0.75 percent lower as they claw back 3 percent so that when 2007 arrives and Labour is celebrating the introduction of 4 weeks’ leave the total employment costs to business will be the same as a percentage of turnover as they are at the moment. 
So who is paying for the extra week’s leave? Labour members do not want to answer that. It is certainly not businesses that are paying. Does any Labour member believe that it will be businesses that will pay for this or do they believe that it will actually be employees who will pay for it? Employees will have to trade off current wage increases for future promises of 4 weeks’ leave. That is the reality of what is happening out there in the marketplace and Labour members know that. Labour members think they know best and they have cunningly worked out that businesses can adjust over a 3 or 4-year period of time. One person tonight said to me: “My local member of Parliament Annette King has said ‘Don’t worry you have time to adjust.’ ” What does that mean? That means employers have time to reduce their pay rounds to their cleaners and their low-income workers and have time to reduce the conditions to cover the extra costs of the 4 weeks’ leave. 
So that is what Annette King says to people when they raise the issue with her in her electorate. She says: “Don’t worry. We’ve given you time to adjust.” Then they wander around and talk to the low-income wage earners in the businesses and say: “Ah but you’re getting an extra week’s leave.” while knowing full well that that same person is paying for it over the next few years—knowing exactly that. Members of this Labour Government take people for granted and think that the good old traditional Labour voter is never going see through them. Just as this Government has taken Maori voters for granted for years now it is taking low-income workers for granted because basically Labour Cabinet Ministers believe that nobody is as clever as they are so nobody can figure it out like them and they can keep them all in the dark and say one thing to the employers and a different thing to the workers. 
That is the reality. Otherwise why would Mrs King not have said: “No we really think your wage costs in your business should be higher.”? Does any Labour member think that the wage costs in New Zealand business should go up? Oh silence! None of them thinks wage costs should go up. So how are businesses going to pay for this? That is why they have been given the long adjustment period. 
This bill is a cruel hoax. Workers are not being given a choice. Labour has decided that workers should trade off future wage increases for a week’s leave. It is as simple as that. That is a choice that is not being made by the workers—Labour has never trusted them—but by the Cabinet Ministers. 
Hon RICK BARKER (Minister for Courts) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Independent: Awatere Huata. 
Motion agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The amendment in the name of the Hon Matt Robson set out on Supplementary Order Paper 174 is out of order. 
A party vote was called for on the question  
That the schedules be agreed to. 
Ayes 76 
New Zealand Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
Noes 43 
New Zealand National 27; ACT New Zealand 7; United Future 8; Independent: Awatere Huata. 
Schedules agreed to. 
Bill reported with amendment.