Dyson Ruth: Minimum Wage (New Entrants) Amendment Bill — Third Reading 
Dyson Ruth: Minimum Wage (New Entrants) Amendment Bill — Third Reading 
[Volume:641;Page:11597] 
Hon RUTH DYSON (Minister of Labour) 
: 
 It gives me great satisfaction to support the Minimum Wage (New Entrants) Amendment Bill at its third reading. I want to begin by acknowledging and thanking Sue Bradford from the Green Party for her introduction of this bill. I recognise that the bill we are considering today differs markedly from the approach that Sue initially took to this issue. But I believe that the bill achieves a balanced way forward for the 16 and 17-year-old New Zealand workers. 
Balance is in fact the best way to describe the bill and the process that the bill has gone through. A balance was needed between those who wanted the abolition of youth rates and those who supported the status quo or—in the case of the National Party—something even worse. A balance was needed between the rights of young workers the perspective of the unions and the perspective of the employers. But perhaps most important a balance was needed in this Parliament to gain support for the bill. That is the reality of an MMP environment. 
Our Government is very proud of this achievement which is another step forward in the steady progress towards ensuring all workers—including young workers—have fair minimum wage protection. The bill provides a 3-month maximum time limit for new entrants in addition to the 200-hour maximum that the Transport and Industrial Relations Committee recommended. Those 16 and 17-year-olds who work full-time will now be able to reach the adult minimum wage in as little as 5 weeks while those who work part-time while pursuing their education will receive the adult minimum wage after 3 months or 200 hours. Labour recognises that often employees who are aged 16 or 17 do the same work as adults. But we also recognise that time is needed for those workers to gain the socialisation skills necessary for working. We believe that the time frames that the new entrants rate will apply allows that learning of soft skills while respecting the value of the work that young people do. 
Clarification has been included in the bill that the new entrants minimum wage will not apply to young people who work as supervisors. I think that is a great step forward for our youth and I am particularly pleased that the bill specifically provides for this as it fairly reflects the value of supervisory skills. I am also pleased that the bill allows all employment undertaken once the young person turns 16 to be taken into account even if it was undertaken before the commencement of this bill. That means that many thousands of 16 and 17-year-olds will have already completed their qualifying time when this bill comes into effect and will move immediately to the adult minimum wage which our Government increased to $11.25 per hour on 1 April this year. That was an increase of a whole dollar an hour—the largest ever increase and something it took the previous National Government almost a decade to achieve. For 9 years the adult minimum wage stayed at nearly exactly the same rate under National except for a pathetic increase of $1 an hour over the entire years. At that same time young people were included at the youth minimum rate right up to the age of 20. 
The bill comes into effect on 1 April next year and replaces the youth minimum wage rate which is currently $9 an hour with a new entrants minimum wage. The actual rate will depend on the outcome of the minimum wage review which is already under way. Our Government has a commitment confirmed in our confidence and supply agreement with both New Zealand First and the Green Party to move the adult minimum wage to $12 an hour before the end of this term of Parliament if economic conditions allow. So if the minimum wage does rise to $12 an hour on 1 April next year the new entrants minimum wage would also rise to $9.60 an hour in line with our intention that the new entrants minimum wage would remain at 80 percent of the adult minimum wage. 
We will need to balance the positive impact that abolishing the lower rate of pay for 16 and 17-year-olds will have for thousands of young workers against the possible negative impact of an incentive for them to leave school earlier with fewer qualifications. I do not want to send the message to our young people that leaving school with minimal qualifications is an idea supported by our Parliament. In my view this bill will not give that message. Our increase in the youth minimum wage over the past years has shown negligible impact on the number of young people who are leaving school early. In fact if anything it has allowed people to stay at school longer as part-time jobs are better paid and they are more easily able to balance work and school without working long hours. 
Under the National-led Government the youth minimum wage which is at the point of this debate applied to 16 17 18 and 19-year-olds. Under National a person did not become an adult in terms of the wage he or she earned until the age of 20. What is more the youth rate was set at 60 percent of the adult rate not the current 80 percent. It is new to increase the youth minimum wage; that has been happening only in the last 8 years under a Labour-led Government. 
 When National was last in Government there were 17500 18 and 19-year-olds on the unemployment benefit despite the fact that the youth rate then was so low that an employer could have employed 20 people in any business and it would have made hardly a little bump in his or her wage bill. The youth rates then under National were a pittance. What is that unemployment figure now? Under the National Government which was last in office in 1999 17500 18 and 19-year-olds were on the unemployment benefit. The rate now is fewer than 1000 people. There are fewer than 1000 18 and 19-year-olds on the unemployment benefit now. Those are the statistics that National should think about before it comes into this Chamber and raises spurious arguments in opposition to improving the way that 16 and 17-year-olds are recognised through their wage packet. I am pleased we have been able to reach a position that is supported by the sponsor of the bill because this bill has been promoted for the betterment of young people so that the contribution they make in the paid workforce is properly valued. The amendment applies to all employment regardless of whether it is a first second third or fourth job. 
I am pleased about this great step forward that the bill represents for New Zealand young people. There is more debate to be had on these and related issues but this bill is certainly a magnificent step forward. I conclude by acknowledging again the voices of young people unions and employers who submitted on the bill. I thank my colleagues in the House for the contribution they have made in strengthening and clarifying the intent behind the bill when it was debated during the Committee stage. I particularly acknowledge the hard work the select committee members have done towards the detail. This bill is another example of the Labour-led Government working with other parties in an MMP environment to achieve the best solution for the diverse interests of all those affected by the changes. I commend the speedy passage of this bill.