Bayly AndrewANDREW BAYLY (National—Hunua): It is a pleasure to be talking on the Minimum Wage (Contractor Remuneration) Amendment Bill. Just as a backdrop to this bill that is before the House this is obviously a bill that had been put forward by the Labour Government some time ago under the Darien Fenton bill which was put forward but was actually rejected by the House. This is now a rewrite of that original bill proposed by Darien Fenton. Today what we are doing is having another go at trying to introduce similar provisions. I think we have got to ask ourselves what we are actually trying to achieve. I have just heard the previous speaker Andrew Little talk about trying to deal with exploitation and I think all of us agree that no one wants to see exploitation take place in New Zealand with regard to New Zealand workers doing a proper job. But it is also a question about choice—choice about the way people want to work and the relationship that they want to have with their employer. I think it is a fundamental tenet that we need to have a very close conversation around because choice is something that permeates everything that we want to do and provided we are not getting to a point of exploitation that is a legitimate—in fact a fundamental—right of everyone in New Zealand. The third thing is around risk and reward. What is adequate risk and reward for doing a proper day's work? I think again this Minimum Wage (Contractor Remuneration) Amendment Bill is sort of starting to cut across a lot of those original propositions. That is why we are not supporting this proposed bill. One of the things that I just want to pick up on is that if I look at clause 14 of the bill New Schedule 2 inserted" which lists all of the different services that would be caught under this bill they are quite wide ranging. We had a number of presentations from different industry players and workers on a number of the related industries listed here for instance: cleaning services courier services food catering and fast-food delivery right through to truck-driving services telemarketing services and newspaper and pamphlet delivery services just to name but a few of the different companies that came and gave us very thoughtful presentations on this bill. You know when you look at some of those particularly around the courier industry—and we had a number of submissions from that industry. This is around risk and reward—we had certain operators who were saying that they very much liked the arrangement of being able to be an independent contractor. That was their choice and they saw that as adequate risk and reward. They did not actually have a view around exploitation. So in that case you have the contractor voluntarily wishing to enter into these arrangements and actually finding them very satisfactory. On the other side we had a company—a very reputable company—making similar representations that they found these arrangements perfectly acceptable and preferred them. It does not preclude the arrangements of actually employing employees but for that model it worked very well. The other one which was the most obvious industry where this level of exploitation is perceived to occur is the newspaper delivery service. Again we had some presentations on that to the Transport and Industrial Relations Committee. This is the issue that I think that people have got to consider a little bit further: companies want to make sure that they get good value for money from their employees and employees want to be paid adequately for doing a proper day's work. How do you measure that? In many industries it is appropriate to actually set targets about what sorts of outcomes you want to achieve during the course of the day and the delivery of newspapers is one such case. Particularly in that industry it was providing jobs to many disadvantaged people particularly people with disabilities younger people and older people who would not otherwise find getting employment easy or were not in the situation of wanting to take full-time employment. So entering into a contractual relationship in that case was actually perfectly feasible and acceptable to all concerned. I think the issue around cleanliness services is another area in which there is a lot of debate about whether we are allowing these people to work late at night endlessly doing jobs and not getting paid a suitable remuneration. One point I want to make—and the member from ACT noted it earlier—is that no one wants to see anyone exploited no one wants to see anyone being underpaid for what they do but the right to have a conversation and enter into a voluntary relationship with a contractor is perfectly legitimate. Even as a professional contractor—many are the times I have seen and witnessed where professionals determine what they are going to incur in doing a job whether it is writing a report or providing some form of advice and subsequently find that they overrun that time estimate and therefore will exceed the agreed budget that they have entered into with the contracting firm. That is in a sense a contract. It is a contract between two parties who have all of the information and who make a willing decision and it is almost a willing buyer situation. That is a perfectly legitimate circumstance. If we took this bill to its extreme we would be suggesting that even those professional relationships involving highly skilled people—we would seek to renegotiate with them if for instance we found that their overall rate was less than the minimum wage. I just think that is fundamentally wrong. I think the right for people to enter into proper arrangements is fair and reasonable and equitable and should be provided for. We do not want every person to be a contractor. We certainly want to see employment arrangements continued in that regard. But that flexibility is I think a very strong issue that we need to maintain in our employment relations. I do want to just add that as a Government we have been very focused on making sure that we stop some of the less attractive and unwanted practices that have been occurring. I note particularly how we have banned zero-hour contracts where employers do not guarantee any hours of work. I think that is a fundamental change and a very important one that this Government has brought into play. We have also sought to increase the minimum wage and I am glad that the Government has progressively increased the minimum wage from $12 back in 2008 now up to currently $15.25. The issue is: can we get there quicker? Should we be imposing a higher minimum wage which many have advocated for? But I think for the many thousands of business owners out there—and there are about 500000 small businesses in New Zealand—the owners of those businesses and the shareholders in those businesses would be concerned that we are not doing that in too fast a progression. We have set about doing it in a logical way which means people can budget and at the same time all New Zealanders can share from that upside as we progressively increase the minimum wage. We have also extended paid parental leave reduced ACC quite significantly—a reduction of $232 million for ACC cuts—and I think all of those things go together to make the work environment that we currently have in New Zealand far more robust and appropriate for New Zealand's circumstances. The last thing I just want to home in on is the cost of this proposal which I do not think many people have actually thought about. I just want to lay out a comparison between the minimum wage and what it means to a salaried employee versus a contractor. An employee would be paid 8 percent of their gross earnings as holiday pay on top of their wages and an ACC levy would be deducted through the PAYE system as we all know. If we were to compare this with regard to a contractor a contractor receiving a similar amount of remuneration—and let us say that is the minimum wage—would not receive holiday pay but would have to pay both the earners levy and the work levy. The levy rate varies according to the employment sector. It ranges from 10c in the dollar to several dollars per $100 of liable earnings. So actually what this means excluding the tax consideration is that the contractor would be approximately 9 percent worse off in a week than an employee. I think that is one of the financial constraints we should really think about when we talk about this bill. So on those grounds I oppose this bill."