Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill — First Reading 
Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill — First Reading 
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Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill 
First Reading 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 I move  
That the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill be now read a first time. 
 At the appropriate time if it is given a first reading—it does not appear likely—I will move that it be considered by the Transport and Industrial Relations Committee. 
This bill is about two very simple things. The first thing is jobs. The second is helping young people find their footing in the labour market and giving them a start. 
Since the previous Labour-led Government abolished the youth minimum wage in 2008 youth unemployment has soared. Since 2008 youth unemployment for 15 to 19 year-olds has almost doubled. The number of unemployed youth has risen by more than 18800 people. The recession has had an obvious impact but the youth unemployment rate is far higher than usual in a recession. University of Canterbury economist Eric Crampton has demonstrated that there was a large rise in the youth unemployment rate relative to the adult rate after the youth minimum wage was raised to the adult level. 
The youth unemployment rate today stands at 26.5 percent—a national disgrace. The rate for Maori youth is even worse: it stands at 38.7 percent. Almost two out of every five young Maori people in this country are unemployed. To put it in another way for every 1½ young Maori people who are in employment one person is unemployed. Yet the Maori Party as I understand it intends to vote for this situation to continue. It intends to vote against this bill. 
Why do National Labour the Maori Party and the Greens keep pretending that the abolition of the youth minimum wage has helped people in New Zealand when it has in fact stopped many young people from finding work? Labour and now National tell us that they care about the young people of this country. But the people of New Zealand should not be fooled: it is those parties that are responsible for the large number of young people who cannot find work. Labour and now National have forced thousands of young people to go without gainful employment. 
Why does the youth minimum wage have this unintended consequence? Businesses are not charities. They respond to prices just like the rest of us. The abolition of the youth minimum wage has priced young people out of the market. That has occurred because many young people are just starting out on their career. They will be searching for their first job. Their lack of training and experience means that they have few skills. What Labour and now National have forced young people to do is to compete with adults. They are forced to compete with those people who have had a lot more time to gain experience and who have more skills. 
I find it hard to believe that the National Government will not support this bill when it has conceded that the abolition of the youth minimum wage has led to unemployment. Then again the National Party has always been bold in Opposition but has proved to be spineless in Government. As Wayne Mapp said when debating this issue in 2006— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am reluctant to do this but in the interest of decorum in the House and despite the fact that the National Party did not take objection I note that references to members of Parliament or a parliamentary party being “spineless” have been ruled out of order on a number of occasions. I can remember back to when comments made by the Rt Hon Sir Robert Muldoon including that particular word were ruled out of order. 
Hon Sir ROGER DOUGLAS 
: Speaking to the point of order I think that that reference was related to one individual member and not to a party as a whole. 
Mr SPEAKER 
: I think that that is an important distinction. Where a member accuses another member of being gutless spineless or lacking in courage it is clearly out of order. But had National members been worried it would be up to National members to object if they found it offensive. 
Hon Sir ROGER DOUGLAS 
: As I was saying Wayne Mapp stated: “The problem is if one artificially boosts minimum wages to levels that are frankly too high one ends up reducing profitability reducing opportunity and reducing the ability to put more money into approving skills.” 
When National is in Government it plays the numbers game. Those thousands of young people who are out of work do not in general vote. Some of them are too young. It does not matter to the pollsters in the National Party. When in Government National is happy to help out the unions who want to erect higher and higher barriers for those who are out of work. In Government National clearly does not believe in principle or in bold implementation. The only question it appears to ask is: “How do we stay in power?”. 
What is the alternative offered to unemployed youth? The law makes it illegal for a young person to be hired on anything less than $12.75 an hour or $510 a week. In other words unless young people have a productive value of at least $510 a week they are unemployable. That is what John Key Phil Goff and Pita Sharples are saying. The people who say that they care for young people are saying to the 16-year-old who could earn $400 a week that he or she is not allowed to do that. They have made it illegal for him or her to work at that rate. 
John Key and National care so much about their short-term images that they will stop young people who have the capacity to earn $400 a week from doing so—that is from having a job that pays them that amount. Instead John Key and National supported by Labour will force those young people to collect a benefit of $160 a week. They care so much for the young people of this country that they will make many of them unemployed and in the process they will make them $240 a week worse off. 
But even worse than that the National Party the Labour Party the Greens and the Maori Party all say to unemployed young Maori of 16 years of age not only that they cannot accept that job paying $400 a week but also that they cannot get the job in the first place. They say that they cannot start developing their skills and cannot get work experience. We failed many of those young people who do not have a productive value of $510 a week. We failed them through the education system and now we intend to fail them once again in the labour market for certain. Instead we are saying to the young person who could get $400 a week at the Warehouse or at a grocery store that he or she cannot accept that $400 a week; he or she has to go on the dole for a $160 a week. 
We are saying that young people should sleep in until 11 o’clock and sit around playing the PlayStation and if that $160 is not enough then they can supplement their income in some other way. We are saying that they should not get a legitimate job because we will not allow them to get a legitimate job. No we will not. “Go and join a gang”—that is what we are saying to the young people of this country. We are saying that they cannot have a legitimate job earning $400 and that we will pay them $160 so they should go and supplement their income. I had such a young person talk to me today who is doing exactly that: joining a gang. 
It is increasingly clear to those New Zealanders who are economically literate that if they want a Government that is genuinely different from Labour then they should not vote for National. National may get things right when it is in Opposition but it will always be weak in Government. 
DAVID BENNETT (National—Hamilton East) 
: 
 In this debate I think we will see most members of the House especially members of the two main political parties unified in their opposition to the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill. I will start by responding to some of the issues that have been raised by the presenter of this bill. In the context of looking at the youth of New Zealand and at the future this country has available to it of which this Government is very much aware and which it wishes to promote we see a bright future for our young people. We see our young people getting education skills and training and having a direction and purpose in life and we see a positive successful and dynamic future for New Zealand’s youth. Those things are essential if our country is to achieve its goals. 
The fundamental proposition this bill puts up is that we need to pay people less to get them into their first job so that they can have an unskilled future. That is what this bill essentially will do to New Zealanders. We see a different future for New Zealanders. We want those young people to get into training and skills so that they are not talking about getting the lowest-paid job they possibly can but instead are looking to get the best-paid job they possibly can. If we can achieve that we can make the dynamic change in our economic base that will give New Zealand the growth potential we need. I think that is the fundamental point that the ACT Party has not grasped. It is looking at things in a historical perspective. Well the world has moved on. At this stage we need to create an economy that has a strong and successful workforce and to do that those young people need to get the best skills they can at the youngest age they can. We should be promoting to them the need to get education and training not encouraging them to take the easy option of temporary employment which may provide some financial gain at an early age but will not deliver long-term benefits for them as we go forward as a country. 
That is the dynamic that I think the ACT Party has not grasped. It is looking at it from the perspective that we can just give lower rates of pay and therefore people will be happy. It is also scaremongering by talking about things like youth gangs taking the dole and all that kind of “work”. That is not the reality. The reality is that youth want to achieve and get a decent start in life. Where do we set the rate? Where do we set a youth rate if we are to have one? What is the value that would be put on a young person under the ACT proposal? I imagine that if we were to take ACT’s logic to its full extreme it would be detrimental to have the youth rate that ACT is proposing. ACT should not propose a rate if it really wants to get young people into employment rather than into the gangs or on the dole. To set a rate is to set a line and the fact of the matter is that the line is set at the minimum wage. I think we will see agreement on that between the main political parties because we probably share a common vision of what we want for those young people going forward. 
I encourage those people who are listening and members in the House to look at this issue in the wider perspective of what we want to achieve in setting some incentives and some direction and not try to scaremonger or create perceptions that if we have a lower rate of pay at the first level of employment those opportunities will necessarily be provided. That is not the signal we need to send to young New Zealanders as we go forward. 
I think it is important to look at the situation we are in at the moment. I do not think anybody out there is under any illusion about how difficult it is to get a job. The most difficult and harrowing situation for a student leaving school university or polytech is achieving that first start in the employment cycle or for someone who has lost his or her job finding that next job. Many New Zealanders are living that nightmare at the moment. That nightmare has been brought about partly by the nature of our economic position which is partly caused by world circumstances but also because we need a stronger and more vibrant economy that can deliver opportunities for our young people going forward. That is the crucial problem and we as a Parliament should be looking for solutions. 
We should be looking for solutions so that New Zealanders and especially young New Zealanders can see a future in training and in employment so that they can achieve personal growth and the desire that comes with getting a job. That is what this Government is focusing on. It is focusing on the economic fundamentals that will provide the environment whereby employers can hire young people and deliver them the incentives to get ahead and succeed. The Transport and Industrial Relations Committee has debated the issue of youth employment rates and unemployment many times. One of the key points that always comes through is that we have young people appearing before the select committee who are attaining very high levels of management expertise and success at a young age. It is difficult when we see the logic of this member’s bill to compare that with the reality of the success of a lot of young people. We are denying them their success by holding them at a lower rate than their ability shows as individuals. It is a tremendous shame if we dumb down our young people who can provide successful and strong services and can be paid for that at a rate that demonstrates their capability and their ability to do a job well. It is important that we do not set the bar too low in the sense that our young people who work hard must not find that they get no reward for their efforts. That is something that I think this legislation could have a problem addressing if it goes through this House. 
In essence there is a new way of looking at these issues as we go forward. There is a way of building an economy that is strong and that delivers the skills and enterprise for our young people to take advantage of that strength. The Government is committed to creating that economic environment. We do not believe that this measure will create the environment that the ACT Party says it will. We believe that the true measure of success for New Zealanders as we go forward is a strong economic environment where we deliver skills and enterprise we back our young people and we give them the right direction and rewards so that they know they can succeed. They will then build themselves into even stronger and more successful New Zealanders going forward. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 For the second time in a day I find myself in the unusual position of following the speech of a National member of Parliament on industrial relations legislation and just about agreeing with it. I think I can agree with the vast majority of what my colleague David Bennett from the Transport and Industrial Relations Committee—and Tau Henare; the pair share a hairdresser—said on the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill. David Bennett is right. He has got it. If I were Sir Roger Douglas I would be slightly insulted that a junior backbencher was sent to the House to deliver the Government’s position; the tradition is that a Minister takes the first call on this sort of legislation to state the position for the Government. A Minister is part of the Government and a backbencher of course is not. I know that procedural niceties are not as important as that as far as this Government is concerned and I think that Sir Roger is not as sensitive as that anyway. He probably would not realise that Kate Wilkinson is a Minister at the moment. 
Hon Ruth Dyson 
: Who is? 
Hon TREVOR MALLARD 
: Kate Wilkinson I understand is the Minister of Labour and the Minister of Conservation. 
I ask Sir Roger Douglas what happened to his principles. He knows he does not believe in minimum wages at all. Why did he bring into the House something that he thinks is a half-cocked halfway approach? Why did he not stand up in the House and say what he really believes which is that there should not be any minimum wages for anyone? That is what he believes. He believes that it does not matter whether the people who come in to clean up the pig farm are adults or kids he should set their rate—he as an employer should decide what the rate should be. That is his position. He believes in the total power of the employer rather than having a fair and balanced employment relationship. 
There are a few fairly simple arguments against this bill. One is that we are all waiting for the evidence from Sir Roger that massive problems have occurred as a result of the introduction of youth rates. That evidence just has not come. The reason it has not come is that he could not find evidence that problems have occurred. There is a clear argument in equity for paying people properly and most people in New Zealand accept that. Most New Zealanders believe that all people should be paid in a dignified and proper way for their labour and it does not matter whether it is a younger person an older person or a person in the main section of the workforce. I say again to Sir Roger that a few of us would have thought more of him if he had come down to this House and said what he really believed and if he had told the full truth as to ACT’s opinion on the minimum wage rather than the half-truth or part-truth approach that he took with this bill. Most of his colleagues funders and mates in the Business Roundtable actually would not agree with him but I am certain that Mr Kerr and others who helped draft the legislation would say that from their perspective this is not the best approach. 
The final point I make is that I do not think that National went far enough. My view is that having decent wages forces employers to train. They have to make their workers productive and earn their money. It forces them to invest in proper capital equipment because if they are paying someone a decent wage they need the right gear in order to make sure they get the return. We have a choice in New Zealand: do we want a high-wage high-skill economy or do we want to compete at the bottom end with India and a number of countries like that? Roger Douglas wants our wages to go down; Labour wants them to go up; and National says it wants them to go up but in real terms it is keeping them down. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak to the first reading of the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill. This bill will provide for differing levels of minimum wages for youth and other workers. National will be opposing this bill. We do not feel that it is helpful in keeping the focus on growth and growing the economy which is needed to create jobs and which this Government has made a top priority for this year. That will be crucial going forward. Getting the economy right is absolutely fundamental and the rest will follow. I agree with the Hon Trevor Mallard’s argument that we need to be a high-wage economy. Importantly this Government is focused on keeping youth in education or training and we have introduced a number of measures to achieve the same. This Government is committed to giving youth every opportunity to achieve and meet their potential. We value our young people. 
We know that not every young person is suited to mainstream education and that is why the Government is committed to opening trade academies. These are a key part of our Youth Guarantee policy and they will keep more students engaged in learning. They will provide more career choices for 16 and 17-year-olds and give them greater opportunities to develop their knowledge skills and talents through trades and technology programmes. National’s Youth Guarantee is about creating thousands of places at tertiary and training institutes across the country to help 16 and 17-year-olds to stay engaged in learning. We know that the longer youth are engaged in learning the less likely they are to fail in life and the greater the chance that they will be in work and be productive. We want to see every young person succeed and reach his or her full potential. 
This Government is committed to giving young people the opportunities they need to succeed. Yes we know that young people have been hit hard by the recession and there are a number of reasons why we have a recession. Our Job Ops package has proven to be hugely successful. Job Ops is about backing businesses that create work opportunities for young people. We asked firms to provide up to 4000 young people with an entry-level job for at least 6 months. The Government paid a $5000 wage subsidy for each placement. Job Ops is about giving incentives to local businesses that hire low-skilled under-24-year-olds for 6 months. It was such a successful programme that an extra 2000 places were announced in February this year. 
Community Max another policy has also been very successful. Community Max is about inviting local councillors mayors community groups and iwi to play a role creating up to 3000 work opportunities. We wanted community organisations to come to the Government with local projects that could employ young people and engage them in our communities. The Government paid the minimum wage for 30 hours a week for up to 6 months a training payment and for one supervisor for every four participants. Those 3000 places have now been filled. National believes that every young Kiwi should be able to find his or her way on to the path to success. We are concerned that for young people starting out in their working lives a long period of unemployment could be very damaging. We know we cannot afford to leave young people languishing on a benefit and risk diminishing the potential of an entire generation of Kiwis. That is why the Government has been proactive in keeping our young people in work education and training. 
National has not seen any evidence to show that young people are losing their jobs because of youth rates. We are not convinced that this bill will reduce youth unemployment. We should be focused on growing the economy and providing opportunities and jobs for young workers. This Government is doing exactly that. Thank you. 
DARIEN FENTON (Labour) 
: 
 I am thankful for the opportunity to speak on the first reading of the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill. I have to say how the worm turns! I was in the last Parliament under a Labour-led Government. We had this very same debate about youth minimum wages and National voted against it. It is really pleasing to know that National has seen the error of its ways and has actually accepted that what Labour was saying about youth minimum wages being discriminatory and not having any impact on youth employment was accurate. We have seen from the figures that the minimum wage makes no difference to youth employment. We can argue about research—and the member Sir Roger Douglas will argue about that—but the fact simply is that if someone is working it should not matter whether that person is young a Maori a woman or whatever he or she may be. Someone who is doing a job should be paid a decent wage for what he or she does. 
This bill seeks to return young workers to the scrapheap of the youth minimum wage and as I said that is not a new argument to have in Parliament. The arguments that Sir Roger Douglas has put for his legislation are well rehearsed. I know that the member was not here for the last Parliament but I tell him that we went through them then and they were rejected. They were rejected. We went through a select committee process and we heard from all kinds of people but the arguments were rejected because there was no evidence that increasing the youth minimum wage or young people’s wages has any impact on employment levels just as there is no evidence that increasing the wages of women has any impact on wages. I think we have seen arguments about that in the past. 
I do not want to be disrespectful to the member—I welcome him back to Parliament—but I ask him whether this is really what he came back to Parliament in order to do. I ask whether this is really what he came back to Parliament to do because I would be interested to hear a response on that. We had debates on this issue in the last Parliament but no one can remember what life was like in the 1980s when that member was in Parliament. No one can remember that actually. 
Hon Trevor Mallard 
: I can; I can. 
DARIEN FENTON 
: Oh Mr Mallard can remember that but many of the young workers who would be affected by the provisions of this bill were not even born then. They were not even born when that member was last in Parliament. I am sure that he is genuinely concerned about youth unemployment as is everyone but I think that his economic arguments just do not stack up. I think we have moved past the economic rationalist arguments that we have seen from the Business Roundtable and from his supporters. 
We can look at the record of what happened under the previous Labour Government to New Zealand wages when we removed the youth minimum wage. We progressively moved the adult minimum wage upwards. When we came into Government in 1999 the youth minimum wage applied to young people under 20—I mean many of those people were not only holding a job but had family and other responsibilities—and we progressively moved the minimum wage upwards. There were significant increases to it but during that period the rate of youth unemployment kept falling as did the rate of unemployment for all workers. Everybody knows that the previous Labour Government moved the minimum wage significantly. 
So we can all come up with research on this issue but I think we have had enough time now in this Parliament to know—and certainly National acknowledges this—that moving the minimum wage does not actually have the impact on young workers that the member suggests. I know that the ACT Party’s position is that there should not be any minimum wage and that wage levels should be left up to the market. The member can correct me if I am wrong. I ask the member to correct me if I am wrong but that I understand is where that party is still at. 
For me the issue comes down to some simple things. If we look back in our history we see there was a time at the beginning of the last century when we discriminated against Maori workers. They were paid less than Pakeha workers. And there was a time up until the early 1970s when women were paid less than the minimum wage—less than men. Could anyone imagine that we would ever go back to that sort of discrimination? Would we ever do that? We cannot discriminate on the basis of gender or of race so can we discriminate on the basis of age? Well the member is proposing that we should. Should we discriminate on the basis of someone being older than other people? 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. As the youngest member of this House it was not that long ago that I was pushing supermarket trolleys delivering pamphlets and serving up fish and chips and being paid at a lower wage than the minimum adult wage. Back in the late 1990s when I was a high school student working after school I like many Kiwis was discriminated against by the youth minimum wage which applied to 16 to 19-year-olds and was set at 60 percent of the adult minimum wage. In my case I was actually supervising adult workers yet due to the law I was being paid less. 
The Green Party wants to look after Aotearoa New Zealand and all of its people. We believe in a fair go for everyone young workers included. Everyone deserves a decent living wage but this bill sets to undo the success that the Green Party and in particular Sue Bradford in her last term in Parliament achieved through her Minimum Wage (Abolition of Age Discrimination) Amendment Bill. The Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill put forward by Roger Douglas wants to take New Zealand back to the past. Perhaps we would not go back as far as he would prefer—the 19th century and rampant unregulated capitalism—but as far back as the 1980s and the 1990s. It would be back to the bad old days of the previous National-led Government and its neo-liberal Labour predecessor in which Sir Roger himself was a key player. 
This bill seeks to reinstate a discriminatory youth minimum wage. It is discriminatory. Why should young people who are doing the same work get different pay? In a fair society we are not paid depending on our gender our sexual preferences or the colour of our skin. As The 
Standard points out as a parody the word “youth” could be replaced with “Maori” in this bill. The point is that we would not discriminate based on ethnicity so why should we on age? Ever since the Equal Pay Act back in 1972 discrimination in rates of pay based on gender has been unlawful yet the one piece of legislation where discrimination should not be setting guidelines the Human Rights Act condones setting up discriminatory wages. Members may have noticed my first member’s bill on youth human rights which proposes repealing section 30(2) of the Human Rights Act to make this type of age-based discrimination unlawful. 
The bill we are debating is misnamed. It is called the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill but that is just a front a Trojan Horse for the real issue. ACT’s buddies in big business want to pay young workers low wages to keep wages down in general and profits for a few up. The Green Party wants to give everyone a fair go and thinks it is a tragedy that near to 30 percent of the unemployed are aged 15 to 19. Youth unemployment is rising but that is because of the recession not because businesses cannot discriminate based on age. A Treasury report from 2004 said that there had been no negative impact on youth employment from the 2001 changes. In fact youth were more employed and working longer hours. This bill has nothing to do with lowering youth unemployment; it is about lower wages for workers and higher profits for shareholders and owners. It is tragic that this Government is making moves to make further tertiary studies harder to access and more expensive for our young people. From raising fees to cutting 40 to 45 percent of New Zealand tertiary courses and reducing student loan access this Government is making it tougher not easier for unemployed young Kiwis to train to get skilled and to contribute to an innovative prosperous and growing economy. 
In summary the nation’s young are beset on all sides. Our young people are growing up in an increasingly unequal society an increasingly uncaring society and an increasingly dangerous one. Those with jobs are threatened by work conditions that breed mistrust fear and conflict between workers and employees. The 90-day fire-at-will bill miserable minimum wage increases and looming GST rises send all workers but our youngest and most vulnerable workers in particular a strong message: this ACT-led John Key - led Government is standing up for private profit not for a fair go for all. Last month National somewhat slowed Sir Roger Douglas’s dreams of returning New Zealand to the 1990s then to Victorian England when it announced that it will not support this bill. It is a rare piece of good news out of the Beehive but let us face it: the bill was a bad idea to begin with. 
The Green Party believes in a fair go for all not in discriminating and setting pay based on age or on any of the other prohibited grounds of discrimination under the Human Rights Act. The Green Party believes in finding real solutions for unemployed young people like supporting upskilling and increasing access to tertiary education. That is why the Green Party is opposing this bill. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 The Maori Party has a longstanding concern about the specific issue of youth unemployment. In particular we have been devastated by the grinding consistency of the rate of Maori unemployment which tends to be approximately 2.3 times the non-Maori rate and by the fact that Maori have lower labour-force participation rates than non-Maori. But we take great heart from the strength of our people who never give up and who remind us of the need to keep fighting the fight to ensure that the potential of our young people is enabled and that they are empowered to thrive. 
It was for that reason that the Maori Party duly recognised the significance of our co-leader Tariana Turia being delegated responsibility for Maori and Pasifika employment a challenge that she has taken on at full steam. It is within this context that Minister Turia has pioneered the Community Max programme which has been immensely successful in its short duration. In fact at last count some 3200 positions had been filled and of those approximately 1900 were taken up by young Maori. That has been an incredible endorsement of the success of the programme. It is an endorsement that we see and hear about right throughout our electorates. 
There have been two ground-breaking media releases in the last 10 days that give us room for hope although they have received very little media attention. Two days ago Minister Bennett announced there was an overall increase of 9.5 percent in job vacancies between January and March of this year. In the previous week we learnt that the number of New Zealanders receiving an unemployment benefit dropped by almost 4000 in the last month. Most significant of all in our mind was that 2500 Maori cancelled their benefits in March because they had found employment as did 546 people from Pasifika communities. That is great news and we hope to hear and see more of the same. 
We come to this bill with some cynicism about the allegation that 20000 young people have lost their jobs as a result of introducing minimum wages for young people. The explanatory note of the bill paints a grim picture that implies that because the youth wage rates were abolished and aligned with the minimum wage for adults mass unemployment would occur. It goes further and suggests that equitable pay for youth workers at the minimum wage for adults is detrimental to their employment prospects. Our concern is that we simply have no evidence or analysis to suggest that such spurious claims have any factual basis. The more likely reason is the global economic downturn that has ravaged the employment sector generally. 
I want to make it absolutely clear that the situation of job seekers is of immense concern to us in the Maori Party and it was in this context that we absolutely supported Community Max. The challenge for the Government however is to determine what the next step of engagement will be to ensure that those young people do not enter or return to unemployment. I know that every member of this House and every electorate has seen incredible progress in connecting young people to the positive work already going on in our communities through the Community Max scheme. The reason the programme was so successful is that along with receiving the minimum wage for 30 hours’ work a week those Community Max graduates achieved a great sense of self-satisfaction. 
The answer does not lie in short-changing our young people by giving youth a few extra dollars on an hourly basis when that amount does not even match the rate of inflation. We want solutions not bills that create more problems. The Maori Party will not be supporting this bill. 
JACINDA ARDERN (Labour) 
: 
 I am somewhat bemused to be in the Chamber again debating another bill introduced by the member the Hon Sir Roger Douglas that I think fundamentally attacks the rights of young people. I find it bizarre also to be agreeing with some of the contributions made by the Government. But I still find it a bit rich for the Government to claim that it is against the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill because it values the young and because it is interested in youth unemployment as an issue. 
The Government’s scorecard on youth issues is dismal. I was reflecting on those issues as I was preparing my contribution to the House today. The list looks something like this: failed boot camps for young offenders; treating child offenders as adults; targeting students who are struggling to pay loans after completing tertiary education; capping enrolments in polytechs and universities and turning away 8000 young people; trashing youth health centres; and cutting funding to the youth workers association. If the Government goes ahead and supports voluntary student union membership I will be adding that to the list of lost services also. But I also have something to say about the absence of the Government’s action on some critical issues and I add youth unemployment to that list. 
This bill naively I think purports to address the issue of youth unemployment. It is an antiquated and discredited argument to claim that if youth are paid less that will fix the issue rather than simply perhaps shifting unemployment around. We have an evidence base from within New Zealand to discredit that argument with. Labour increased the youth minimum wage by 126 percent and 81 percent for the two different age groups. At the very same time youth unemployment in New Zealand fell to 11.8 percent—one of the lowest levels that we have seen. No one in this House is denying that youth unemployment now is high and is a significant issue that we should all be concerned about. In fact it is an issue that the entire OECD is struggling with but only nine countries have looked at lower youth minimum wage rates as a potential way of addressing it. 
The member raised the significant youth unemployment numbers we face. When was the last time that youth unemployment was as high as it is now? It was in the 1990s when the youth minimum wage was in full swing. I have spoken to people who work in the New Zealand labour market at an academic level. They tell me that moving around minimum wage rates for young people is simply not the answer from an evidence-based perspective. What will fix the situation? There is no point saying that these young people would have jobs if we simply paid them less if the jobs are not available in the first place. Job creation in New Zealand is a significant issue. Skills training for our young people is a significant issue as is making sure that they are educated in areas where we have gaps in New Zealand. Did I hear anyone say that the Skills Strategy may have contributed to answering that? But the Government decided it was best suited to the shelves. All of that would have contributed to fixing our youth unemployment issue. 
Instead the only response that we hear on this from one party in Parliament through Sir Roger Douglas is that we should simply pay young people less. In fact one of his arguments was that somehow paying young people equal pay for equal work—paying them equitably across the board with peers doing the same job—would contribute to their choosing to join youth gangs. That is a completely abhorrent argument to make that somehow we are sending a message to young people that we do not value them. It was certainly the message that I took when as a young person I was paid less for a job I was doing that was exactly the same as the job of an older peer—that I was not valued as a young person. That was the message I received. 
I have asked young people their view of this bill. I have asked young people about it. One young person told me that he agrees with this member’s bill. When I asked him whether he felt that having a different minimum wage would give him a decent wage to survive on he said yes. I asked him how he would pay the rent and he pointed out that his mum and dad covered it for him. I do not believe that this is a realistic bill that addresses the significant issues that young people are facing. I hope that we come back to this House and debate the real issues around youth unemployment. 
Hon TAU HENARE (National) 
: 
 I read in the  
New Zealand Herald  
this morning “Apathy towards jobless issue does us no credit” and that 38 percent of Maori aged between 15 and 19 are unemployed. I do not totally pooh-pooh Sir Roger Douglas’ idea although we will not be supporting his move. 
I want us to cast our minds back to the last time we had such a scandal in terms of unemployment. I do not lay the blame at anybody’s doorstep. Unemployment is what it is: unemployment. But I find it abhorrent that we would pay somebody the dole to do nothing. I find it abhorrent that we would pay anybody anything to sit at home and to do nothing. I think there are better ways and this country has seen better ways of dealing with unemployment especially in those high unemployment zones as I like to call them. They are basically the north the East Coast and pockets of the suburbs. 
One of the things that I think we should be seriously looking at along with what we are doing with Community Max and our other programmes like Job Ops is putting all of our energies— 
Hon Trevor Mallard 
: When was the last time anyone went into one of those? 
Hon TAU HENARE 
: Well the member should just listen and stop being captured by the old-style dogma that he likes to talk about but does not really believe in. He wants to— 
Hon Trevor Mallard 
: Come on “Bottler”. 
Hon TAU HENARE 
: I have given up those days I say to Mr Mallard. I have given up those days. I am not like that member who lives in the past all the time trying to live off past glories. The only thing that the member does right these days is to ride a bike and that is all he is famous for. 
But anyway let us talk about those zones that I was talking about. Why are we not saying to ourselves right across this House that we should designate the East Coast and the north as special economic zones where we get in there boots and all and help? Some of the things that Sir Roger Douglas says speak the truth such as that it should be a national scandal that 38 percent of Maori aged between 15 and 19 are unemployed. I ask why we are not jumping up and down. As the article in the  
New Zealand Herald  
said this morning it is most probably because when 95 percent are employed nobody gives a toss about the other 5 percent. But if we break that down we will see some horrible statistics. 
I am saying that maybe we should be thinking outside the box. Maybe we should be designating places like the East Coast and the north as special economic zones. This is not just for Maori; this is for everybody in those areas. One unemployed Pakeha and one unemployed Maori are the same because they do not contribute to the region’s economy. 
I do not want to get up and say that I support the reintroduction of work schemes but I will tell members about work schemes. The great thing about work schemes was little communities— 
Hon Trevor Mallard 
: The member’s on a west Auckland work scheme. 
Hon TAU HENARE 
: Oh no. Little work schemes were great for places like the Hokianga and Ruatoria. I know that the member really does not give a toss. 
But at the end of the day we can talk to any people who served their time on a work scheme whether it was a Project Employment Programme scheme a Temporary Employment Programme scheme a JOVTP scheme or a TOPTT scheme and they will tell us that what they got out of it was a bit of pride and a bit of money in the bank and the little community of say the Hokianga would have been a special zone to them. John Mary Frank and whoever else who was on the scheme—it might have been only 30 people—would have been able to get that community cracking. Although I am not advocating a return to the Project Employment Programme schemes I say that it is time we used our initiative and the forces we have to look at this matter more seriously than just getting rid of minimum youth rates. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 It was an interesting debate: not one solution to the unemployment rate amongst young people was put up by any speaker. The fact is that National has already conceded the principles of my Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill. It did that when it said that the abolition of the youth minimum wage has led to unemployment. That is why the National Government has implemented the Job Ops scheme giving businesses $5000 to hire someone between the ages of 15 and 24. It has done that because it knows full well that the businesses could not afford to hire those young people without that subsidy. Instead of facing the truth and reversing this silly policy the Government’s solution is to spend more taxpayer dollars trying to restore to youth the ability to get a job that was taken away by the Government in the first place. 
The whole thing is absolutely ridiculous. Whether or not we want to deny it—and everyone in this House was denying it tonight—there is one economic reality that we cannot overcome and it is that wages will always reflect the productivity of the worker. Regrettably thousands of young people do not have a productive value of $510 a week and to those young people who do not have a productive value of $510 a week we have said that we will put them on the scrap heap. We have said we will throw them on the scrap heap. In my area a decile 6 school had a test for young people coming into that school. One of the questions asked if we have 36 apples and we eat 27 how many we have left. Guess how many people got it wrong. It was 23 percent. One in four got it wrong. The school system has failed these young people and what this House is doing is making damned sure that the labour market will fail them as well. 
What we are doing—the National Party the Labour Party the Green Party and the Maori Party—is saying to young Maori people of 16 years of age that they cannot accept the job. Even if they are offered one at $400 they cannot actually take it. We say that by law they cannot take that job. They cannot go into that job and develop the skills they did not get at school. They cannot get that work experience. They cannot get their foot on the ladder. We fail them in the education system and we are failing them in the labour market. We are saying to those young people that we will not help them. They could get $400 in the workforce and guess what we say to them? We say they cannot have $400 they cannot earn $400. They have to go on the dole and we will give them $160. We would prefer them to be $240 worse off than they could otherwise be and somehow we are claiming we care for these young people. Do not talk rubbish. We should be ashamed of ourselves and frankly that is why New Zealand is in the cart. It is because we in this House do not have the courage to do what is right. We do what we think is best politically and that disgusts me. 
A party vote was called for on the question that the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill be now read a first time. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. The rules of this House are very clear that members have to vote in the first instance before they can call a division. No one said Aye for this bill. 
Mr SPEAKER 
: I accept that no one whom the member might have heard said Aye but we cannot be sure who might have whispered or what have you. When a member calls for a party vote as Speaker I have to respect that the member wants to exercise his or her right to see a vote taken. 
A party vote was called for on the question  
That the Minimum Wage (Mitigation of Youth Unemployment) Amendment Bill be now read a first time. 
Ayes 5 
ACT New Zealand 5. 
Noes 117 
New Zealand National 58; New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Motion not agreed to.