Fair Pay Agreements Bill — Third Reading

FAIR PAY AGREEMENTS BILL

Third Reading

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): I present a legislative statement on the Fair Pay Agreements Bill.

SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon MICHAEL WOOD: I move, That the Fair Pay Agreements Bill be now read a third time.

This one's for Helen Kelly. Over the course of this debate, we've talked about the people that fair pay agreements will help—those who clean, those who care, those who drive, those who serve—workers who, for 30 years, have been left out in the shadows of our deregulated labour market. And sometimes, when you know the problem, you need someone who will help to light the way, and Helen was that person for so many of us. Helen spoke directly about the problems; Helen spoke directly and issued challenges to those of us who could make a difference. She said to Rebecca Macfie, who wrote her biography, "We don't need low wages in this country. There's no excuse for it. People should be able to go to work, work their hours, and have a decent standard of living at the end of the week." And, as Rebecca Macfie said, reflecting on that, "It was a matter-of-fact comment that belied a monumental ambition to shake up the movement she now lead so that it worked for all workers and to build the case for a law change that would stop workers' wages being eroded in a competitive race to the bottom."

Helen Kelly's challenge was to all of us: it was to our economy, it was to decision makers in this House, and it was indeed to the union movement—to stop looking inwards and just looking after short-term interests, and to look outwards to the needs of the hundreds of thousands of workers who needed a change. Sometimes it takes the clarity of a crisis to really focus us in on what needs to change. Who was it across our society that we relied on when things were as bad as they could have been under COVID? Who was it who kept our workplaces clean and healthy and hygienic, but our cleaners? Who was it that kept our towns and cities moving, faced aggression, faced danger, faced infection, but our bus drivers? Who was it who kept our households stocked with the essential goods that kept us all going, but those people on the chain in our supermarkets and retail stores? And everyone, at that time, said thank you. Everyone at that time said, "These people are heroes and we rely on them." Well, the words and the thanks were great, but actually it's time for action. It's time to recognise the work of those people in keeping our society going at all times and in the very most difficult and worst of times.

As this debate has deployed in this House over the last six months, I have not heard one acknowledgment from that side of the House about the reality of life in low-wage New Zealand—not one acknowledgment. In fact, from that party's spokesperson, the Hon Paul Goldsmith, only this week, a denial that people in those roles need better wages. He said this—and I quote—"I accept that the best way to improve worker income is to ultimately improve productivity, so that it is the only way to have sustainable increase in wages." Well, for those people who actually have watched this area for 30 years, here is what I say: we did exactly what they said we should do, because the National Party stood in this House 30 years ago, when they launched the most radical deregulation of the labour market, when they abolished minimum standards and sector-based bargaining, and they said it would lead to more productivity. They said it would lead to better terms and conditions for workers. And do you know what happened? The productivity went up and the wages did not keep pace. The promises that they made in that funk of deregulation, which they still live in a fever dream of, were proven to be false here in New Zealand and all around the world.

This is an issue that is about priorities, and it is about "We stand where we stand", and it is about the most basic and longstanding of Kiwi values: the value of a fair go. That is where we stand, and that is what fair pay agreements are about: about the basic ability to have a fair day's wage for a fair day's work; about not having a race to the bottom in terms and conditions that trap not just low-wage workers but many of our employers, who tell us they want to do the right thing, they want to pay more, they want to have security for their workers, but a race to the bottom system means that those employers are undermined and unable to do what is the right thing.

Fair pay agreements are also about the bigger picture. They are about stopping the race to the bottom. They are about being able to work together—across employees, employers, unions—to actually look at those fundamental issues that we keep talking about but are not making progress on: our chronically low rates of productivity compared to nearly every other country we compare ourselves with. And here is the irony and the reality that that side of the House never ever recognises: that the countries with which we compare ourselves, who have done better on productivity than New Zealand—countries like Australia—have sector-based minimum standards that, since 1991, when that side of the House—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! Order! I'm sorry to have to interrupt the member. He has every right to speak in this House and to be heard, and that is why I'm appealing to our friends and visitors in the gallery to please hold their applause until the end of this whole debate. There are 12 speeches in this debate, and each and every member of this House will be heard in silence by our visitors in the gallery. Then, I understand, you have permission to applaud as wildly as you care, and also grant us and favour us with a waiata. So, with apologies to the House, the Hon Michael Wood.

Hon MICHAEL WOOD: For the 30 years that we have not had sector-based bargaining in our economy and Australia has, their average rate of productivity growth each and every year has been 40 percent higher than New Zealand's over that period. It's about lifting our sights a little bit higher to recognise that a society is not healthy when the gap between those with the least and those with the most continues to grow. It used to be a conservative value in this country that there was a basic level of security and stability for working people, and that side of the House has fundamentally forgotten what that means for a decent and a stable society.

It is about lifting our sights a little bit to value work, and we cannot say in this House that we value work if we do not properly value the contribution that people make through fair pay, through decent conditions, and through a little bit of stability in their lives. And, it is about once again having proper social dialogue between those who bring their capital and their ideas and the innovation, and those who bring their labour to build our economy, because both sides contribute to our economy and our society, and both sides should have a seat at the table as we consider how the fruits of our production are shared out across the country. Fundamentally, it is about once again forming a social contract in this country where working people have a voice, where working people receive fair dues for the contribution that they make.

I want to work through a number of thankyous as this bill comes to its conclusion. Firstly, to the Rt Hon Jim Bolger and the Fair Pay Agreements Working Group, who four years ago made the recommendations—considered recommendations—that we have based this legislation on. I want to thank the Hon Iain Lees-Galloway, the Minister who commenced work on this legislation and this policy. To the outstanding officials within the Ministry of Business, Innovation and Employment, including Beth Goodwin, Tracy Mears, and their teams, who have written thousands of pages of advice, who have sat through mammoth select committee hearings, and who have ensured that we have a piece of legislation that I believe will be enduring. To Marja Lubeck and all members of the Education and Workforce Committee, who did their job diligently and reported back a bill to this House that was better than the one that we put in at the beginning. And I say thank you to every union and every working person who has kept the faith and has helped to build support for this major change that we will be making for our society today.

This was a manifesto commitment of the Labour Party when we came into office in 2020, and we are proud that we have kept it and that we are delivering this change. It speaks to our values and who we are. It speaks to the fact that we value work and working people. And, in 2022, we still hold to those same values that have been core to our party over the last 106 years, as we have represented working people in this House. And this is a piece of legislation that speaks to Helen Kelly's values: the values of dignity for working people; about working people not feeling that they have to feel grateful and doff their caps just for having a job; about them having the fundamental right and ability to be at the table and engage in good-faith negotiations about how they should be treated. And it's also about one of the most important values and contributions that Helen Kelly made. It was the value that we are better off when we are together, when we bring everyone to the table, including working people. The work is never over, but today, through this legislative change, we are one step closer to making work fair. I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): Before I take the call, members of the gallery, you have had two warnings from the Chair. I'm not going to give you another warning. You may not intervene from up in the gallery. I hope I make myself very clear. Again, I say to you, you are very welcome here, but you are not part of our debate.

Hon SCOTT SIMPSON (National—Coromandel): If ever there was an occasion to dramatically and starkly demonstrate the philosophical and ideological differences between the old-fashioned Labour Government that currently holds a majority in this Parliament—but not for much longer—and this side of the House, it is this piece of legislation. It is fundamentally flawed. It is bad for New Zealand. It is bad for New Zealand business. But what's worse is it is bad for New Zealand employees and workers. They will be the people who are worst off as a result of this piece of legislation.

I want to make it very clear at the outset of my contribution in this third reading debate that a re-elected National-led Government will, as a priority, repeal this piece of legislation. We will do it because it is the right thing to do.

For 30 years in New Zealand, we have had the benefits of a nimble, flexible, and exciting industrial environment. We have all benefited from that. All New Zealanders have benefited from that.

Here we have, today, on the anniversary of the five years of this Government—and remember: this was a piece of legislation that the Minister said was a manifesto promise, and I recall it was supposed to be implemented within the first hundred days. Well, five years of failure later, it is finally being achieved by the force of brute numbers in this Chamber. That's the way it works in this Parliament: brute numbers. But it's not about taking New Zealanders with you. This is a Government that seems now to have a complete disregard for ordinary New Zealanders and what they think—so out of touch, so out of step with the thinking of a modern, progressive, and interesting world that will create a brighter, more bold future for all New Zealanders. With this piece of legislation, they want to take us back to the 1970s.

Now, I'm one of those in this Chamber—and most of my colleagues can't remember it, but there are a few on the other side who can—who remember how bad those days were. I remember how bad it was when the trade unions dominated the New Zealand economic situation. There's a reason that that history was rejected by New Zealanders, it's because it's old-fashioned, it doesn't work, and the world has moved on.

Now, what we know from this piece of legislation is that this is really not about fair pay agreements; it is about mandatory union deals. My colleagues, over the last couple of days, have been arguing the detail of this legislation through the committee of the whole House and have been, literally, tearing holes through it. The Minister was unable to answer questions about the detail about how it's going to work, because the structure no longer exists, because we're in the 2020s; we're not back in the 1970s. Those structures do not exist.

What happens now is a Minister is going to have a piece of legislation passed, using brute numbers in this House, that will be repealed, probably, within 12 or 18 months—probably less; maybe earlier if they don't last the full mile. Then what will happen is that New Zealand businesses and employees are going to have to go through this whole process of change where secret deals are done between lord knows who on behalf of the business side of the table, because there is nobody standing up wanting to be party to this new scheme, and the deal will be done with big unions behind closed doors. The only difference between now and the 1970s will be that those rooms behind closed doors won't be smoke-filled—thank goodness! But the same ideological and philosophical approach will be taken.

This removes an opportunity from New Zealanders, New Zealand employees, and New Zealand employers to negotiate terms, conditions, and arrangements that suit them—that suit them. They don't want to have imposed mandatory deals thrust upon them by unknown, faceless people who have no understanding of the individual imperatives that make businesses work.

If it was just as easy as arbitrarily legislating for things to be true in the area of industrial relations, then it would have been done years go—but it was done years ago and it didn't work; it didn't work and it doesn't work. Overseas countries have looked with envy at the New Zealand industrial relations regime and our environment over the years, and they've said, "Those New Zealanders have got it right—they've got it right." They look at us with envy. Here we have a Government full, of course, of union acolytes and failed delegates and what have you, who come back to this House to represent the political interests of the trade union movement.

Most members in this House certainly forget the history of the trade union movement. When it was first established back in the 1800s, there was a need, and they decided pretty quickly that what they needed was political representation. So all around the world, in countries like ours, Labour Parties were formed, and they became the political wing of the trade union movement. So we know, on this side of the Parliament, that those connections are historic, they're political, and they are, of course—

Hon Member: They get the money from them, too.

Hon SCOTT SIMPSON: —financial. It's "follow the money, honey."

What's happened over the last 30 years since the employment contracts legislation came into effect? New Zealanders have voted with their feet many, many times.

Hon Michael Wood: Point of order. It is well-established in Speakers' rulings that suggesting that any members of this House are under the influence of an external body and subject to money, as the member just implied, is out of order.

ASSISTANT SPEAKER (Hon Jacqui Dean): Thank you for that. The member will withdraw and apologise.

Hon SCOTT SIMPSON: I withdraw and apologise. The history is well-known—the history is extremely well-known. New Zealanders up and down the countryside know that when they have freedom of choice, when they have the ability to negotiate their own terms and conditions with their employer, or when the employer has the opportunity to negotiate those terms with individual employees, things get done, and they don't want to have the involvement, necessarily, of a trade union. What's happened is that trade union membership over those years has plummeted. It's plummeted because they are not relevant to most New Zealanders. Most New Zealanders know that they don't need to pay $600 or $700 a year or whatever it for a union that actually won't help them. Who knows where that money goes? Most New Zealanders do know where that money goes.

So this is a piece of legislation that is designed to boost union influence and union membership in the New Zealand economy just at a time when we are under the most severe economic stress that this economy has had in several decades. What's happening? We now have massive inflation, we have inflation at a 30-year high, we have a crisis of cost of living, and we have all kinds of issues that are confronting this Government. What is their number one priority at the moment? It seems to be that their number one priority at the moment is to boost union membership. That's really what it's all about. It's about boosting union membership.

In New Zealand, small businesses, particularly, will pay a price for this piece of legislation. It won't be the big businesses, because they can actually work their way around the increased impost of cost that will come on as a result of this change. It will be small business up and down New Zealand, who are already under immense pressure, who have suffered over the last couple of years in ways that, two or three years ago, businesses could never have imagined that they would suffer, and they are hurting. This will provide further pain and anguish for them.

Treasury advice was very clear. I want to quote from the Treasury advice. It says "there has been minimal identification of empirical evidence for the problem or policy response" that this legislation seeks to achieve. Absolutely damning criticism. What it means is that this is a Government that cares more about their philosophical and ideological agenda and the relationships that they have with their support organisations than it is about anything to do with fair pay or agreement.

What it means is a party that is true to stripe: old-fashioned socialism—old-fashioned socialism. While some of them over there still deny being socialists, actually they are. They're old-fashioned socialists. There are several of them who are going to be finding themselves back in the workforce very quickly because New Zealanders don't want this piece of legislation.

I want to finish where I started off. If ever there was a piece of legislation that dramatically showed the ideological differences between this side of the House and a socialist, old-fashioned Labour Party Government, it's this piece of legislation. This is a piece of legislation that, at the first possible opportunity, a re-elected National-led Government will repeal and we will do so because it is the right and proper thing to do on behalf of New Zealand citizens, on behalf of New Zealand workers, on behalf of New Zealand employers, and on behalf of "New Zealand Incorporated". Taking us back to the 1970s is simply not a credible proposition, even from a Minister who himself came from the trade union movement. This is a thoroughly bad piece of legislation. We will repeal it.

Hon MEKA WHAITIRI (Minister of Customs): E te Māngai o te Whare, tēnā koe. Otirā ngā mema katoa o te Whare nei, tēnā tātou katoa. Here's my prediction. To that member Scott Simpson, who's just resumed his seat: in about maybe 10, 15, 20 years' time, this side of the House is going to enable a platform in which he is going to get up, like the Rt Hon Jim Bolger, and say "I got it utterly wrong—I got it utterly wrong!" That's my prediction. That's what's going to happen.

He aha te mea nui o te ao? He tāngata, he tāngata, he tāngata.

[What is the most important thing in the world? It is people, it is people, it is people.]

I say that whakataukī because it talks to this bill, the Fair Pay Agreements Bill, and I am really proud that we have come to this day to see the introduction of this third and final reading.

I come from a long line of freezing workers and I'm going to stand up in this House and talk about the freezing worker sector and how they were prior to the introduction of the deregulating Employment Contracts Act (ECA). I come from a long proud line of freezing workers. I live in Whakatū, which was the home of the largest freezing works in this nation before it closed, which is now Silver Fern Farms but was once upon a time Richmond Pacific, just down the road from where I live.

Can I tell those in this House what the conditions were in our little community of Whakatū prior to the removal of the rights of our workers and the rights of our unions to negotiate on behalf of our workers. I'll tell you this: every member that worked at those freezing works owned their own homes. They owned their own homes, they owned their own vehicles, and children were in school. We didn't need mental wellbeing support, because people had employment to look after their families. We didn't have the crime rate. And I'll challenge anyone on that side of this House to go and look at the stats. Back in the 1980s, before this Act was introduced, families took care of families and communities took care of communities. And believe it or not, we actually knew who owned our freezing works, because their kids went to the same school. So there was a commitment to community investment and wellbeing that we saw. Wages were high; productivity was high. There was not this foolishness that we're hearing from that side that's all doom and gloom.

This is the picture that I am painting of the 1970s, of the 1980s, and the early 1990s before the introduction of the Employment Contracts Act. In my little community of Whakatū, it was thriving. Kids were going to school, parents had double incomes coming in. They had their own homes. They were self-reliant—the very thing that this side of the House represents is our people, our community. And I want to come to this House to talk about the community of Whakatū and all the other little communities that operated around this country prior to the introduction of the Employment Contracts Act.

But what happened when the Employment Contracts Act—because I also want to turn to the devastation from the introduction that the ECA had in 1991. And I want to tell you: families were against families on picket lines. My grandmother had to pull in our family, because it was sister on sister, cousins on cousins. Before, as I just painted, we all lived really, really well in my part of the world. Everyone was independent financially. Kids were engaged in learning. Homes were owned. And then the ECA came in and it pitted families against families. We had families and communities devastated through the introduction of the ECA. But does that side acknowledge it? No, they don't. They think it's all about the employer.

What about the communities in which these businesses were in and the contribution those communities had to those businesses? Where are their rights—where are their rights? That's why I'm in this House saying it is a good day—it is a good day. It's 30 years late, but it's still a good day. Recognition of those communities that stood up, that were on school boards, that helped coach the schools and sports clubs—all dissipated. They were all dissipated with the introduction of the ECA.

So I'm proud, and before I came to this House, I rang my mother—I rang my mother, who's 84. She worked for Silver Fern Farms with her sister and her other sister—a combined total of 126 years between three sisters. And I said, "Mum, you came down here in the early 1990s and you stood up for our freezing workers, and you went to the Employment Court and you talked about the removal of seniority. You talked about protection of seniority. You talked about the union's right to represent workers. And it is your day." It is just like we're saying to all the others who have made this possible.

I want to talk about the little people. I want to talk about the people I come from, the freezing workers, and I want to acknowledge their contribution on this day. I want to talk about their contribution and their acceptance of something that's so long overdue, which is the rights of our workers—the rights of our workers—and not just the bottom line. It's about wellbeing for our communities. It's about wellbeing for our schools and sports clubs. This is what the ECA decimated, which is why I'm so proud to stand.

This is a beautiful day in recognition of all the pain and the suffering that the ECA 30 years ago had on communities. Let's not forget that. And so I'm proud to stand here to say it is timely that we rectify a wrong. Of course, things have moved on; it's 30 years on, but we have lost lots of people from communities.

I want to say how proud I am to stand in support with Minister Wood and to acknowledge everybody who has helped get this to where we are today. There has been mention of names. I want to endorse the work of the select committee. I want to endorse Helen Kelly for the work that she did. But I also want to talk about two uncles that are no longer here. I need to acknowledge them, because they were national presidents of the freezing workers, Bill Bennett and Rangi Paenga, who were stalwarts in looking after the rights of our freezing workers up and down this country.

I know I only talk about one industry, but I am so passionate about this because it devastated the very community I lived in and come from, which is Whakatū. So it's important that I come and stand in support of this bill rectifying something that incredibly undid and decimated our community of Whakatū. Good people come from there; many left. We had suicides, for goodness' sake, and families uprooted and moved to Australia. Those are real clear examples of the human cost when we take away the rights of workers to get a fair deal.

A fair deal—that is what we're talking about here. We're not taking away the control of the business owner. We're just asking for a fair deal. And we're also looking for recognition that we don't just come to work, but we actually invest in the community in which we reside. Where's the passion in that? That is why my opening statement, "He aha te mea nui o te ao? He tāngata, he tāngata, he tāngata." is so critically important when we are talking and debating about this important bill, the Fair Pay Agreements Bill.

It's been 30 years in the making. I'm so proud of Minister Wood and what his work has done—and all my colleagues on this side, who always put our workers first, and in no better way than this bill that acknowledges the workers up and down the country who do the hard yards, who put themselves up on the line, who all just want a fair deal. That's all they want. I'm proud to stand with this side of the House to acknowledge that they deserve a fair deal; they do. And I can now take a breath and know that the people that I represent of Ikaroa-Rāwhiti, of the community I reside in at Whakatū, will celebrate this day, along with many who have come to witness the third and final reading of the Fair Pay Agreements Bill. I commend this bill to the House.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Speaker. I'm very pleased to rise to take a call in the third reading of the Fair Pay Agreements Bill.

I think it's important to call this bill for what it is—and Paul Goldsmith mentioned it many, many times in his many contributions over the nine or ten hours we debated this bill in the committee stage—the compulsory union deal bill; this—as my colleague Scott Simpson mentioned—fundamentally flawed piece of legislation that we are not supporting and that we will repeal at the very first opportunity that we get.

I think it's worth going through the parts of the bill that are so egregious, and I think the first point to mention in the bill that we have as presented back from the committee stage is a bill that forces employees and employers to the table with only 10 percent—or 1,000 workers—of a workforce. The important thing to note here is that the 1,000 workers may not even be 1 percent. For particularly large sectors where you've got hundreds of thousands of workers, this could actually only represent 1 percent of the workers. The other minimum they said is 10 percent.

The bar is so low, you would be forgiven for thinking that people wouldn't want to be part of this deal given that they set the bar so low. You would be forgiven for thinking, by listening to the speeches—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Don't bring the Speaker into the debate.

ERICA STANFORD: Sorry. You would be forgiven—sorry, "you", yes, I understand. Members would be forgiven—thank you, Madam Speaker, for setting me right, there.

Members would be forgiven, Madam Speaker, for thinking, after listening to the speeches from the other side today so far that employees would be clamouring to be part of a fair pay agreement. Yet they set the bar so very low that it may actually only be half of 1 percent of employees in that sector that sign up to start the bargaining.

In fact, they've snuck something else in that means not a single worker needs to sign up to start a fair pay agreement negotiation. The public interest test, which has snuck into this bill, means that no one needs to sign up. A union—

Hon Michael Wood: Snuck in! Snuck in in broad daylight through the House of Parliament!

ERICA STANFORD: I say "snuck in" because they don't like talking about it very much, because what it means is that no one wants to be a part of this bill, and yet the unions can go and claim that there is a public interest to start a fair pay agreement (FPA).

There's no choice for employers, there's no choice for employees. They are forced into it, whether they like it or not. And there is no ability to stop this process, reverse it, or ever get rid of it—an FPA—once it's started. Once an FPA is started, that's it: there will be a deal, there is no exceptions, there's nothing in the bill to stop the process, ever reverse it, or in fact, get rid of an FPA once it's been negotiated. An FPA can be varied, it can be renewed, but it can never, ever end. It can never be taken out.

Now, my colleague Scott Simpson talked about the ability of our employers to be nimble and flexible. And what we are getting at the end of today, I expect, will be an Act that replaces this flexibility and this nimbleness with an overly complex piece of legislation—11 parts of it.

An example of that overly complex nature of this bill—and this was discussed at select committee and again at the committee of the whole House stage and what we ended up with—is that if only 25 percent of your job is covered by the work of an FPA, you will be included. Sorry, not you, Madam Speaker. The person—the worker—will be included.

So you can imagine the labour inspectorate going around businesses, checking to see the employees who, for example, might be working in hospitality—working on the front desk one day, changing sheets the next, maybe in the bar the next—checking to see whether or not 25 percent of their work that's being done meets the fair pay agreement that's been negotiated.

An interesting point to note in this bill is about the information—the private information—that will now be held by unions. Not of their members, but of every single employee that is subject to this FPA.

Interestingly in the bill, the unions are able to use that private information—not just of their members but also of everyone else—in order to sell their union membership. They are allowed, under this bill, to use that personal information to contact employees who are not their members and say to them, "If you join our union, we will negotiate so that the—"; we will join our union; there was no "you" in there. Pretty sure of that. "If you join our union, we will negotiate through the FPA process that the fees that you pay will be repaid to you." So basically, it's free union membership. They're able to use that.

Now in clause 16, it clearly says the unions are not able to entice people, using this information, into their union, apart from the ability, of course, to write to them all, to communicate with them all, to say to those non-union members, "If you join the union, the fees that you pay will be paid back to you, so therefore it's for free; come and join us." But of course, if an employer does anything like that—at all, any enticement at all—there's a $20,000 fine immediately.

One of the things that the Minister was never able to answer—either in select committee or at committee of the whole House—was what's going to happen with migrant workers? Because migrant workers, for the most part, are required to be paid the median wage—$29.66, come February. How will that affect negotiations? I asked the Minister so many times to clarify that, and he was never able to do so.

The fact of the matter is, if people are in a negotiation, they're able to say, "Well, I'm a Kiwi worker and I'm paid $24, $25. Now, the migrant worker standing next to me is paid nearly $30 an hour." Now, how will that affect the negotiation? Will that automatically ratchet up every fair pay agreement to what the migrant worker is paid standing next to that Kiwi worker? Now, the Minister was never able to answer that and it's important because he's in charge of both systems; he's put one in place for migrant workers and is unable to explain how that will impact on the negotiations.

What this fair pay agreement legislation will mean, and we've traversed this a number of times, is that the small business that we've mentioned—well, the one we made up—the business in Haast with two employees will be required to pay the same base floor as an Auckland business who employs 10,000 employees, regardless of any of their circumstances or costs.

Now, one of the things that was never addressed, again—in any of the discussions—was the unequal bargaining power of the large employers and the very, very small employers, because you can imagine—sorry, this House could imagine—the ability of large employers to get together, to negotiate for terms and conditions and rates that are not favourable to small employers, and thereby putting them at a significant disadvantage.

I want to finish by talking about productivity, because the Minister spent a lot of time today talking about productivity and his view—and it's the same in the immigration space as well—is that if one was to simply just pay more, there would be improved productivity, like those two things just are equal. If one was to pay more, then there will be more productivity automatically.

Hon Scott Simpson: Fantasy land.

ERICA STANFORD: Fantasy land, as my colleague says. It's interesting because the Minister then goes on to say, "Well, the employers are getting undercut and therefore they need these fair pay agreements." But by his own logic, if they just paid more, they would get more productivity and would be better off. But those two things don't sit well together, but I'll leave that to members opposite to explain. And I look forward to voting against this bill.

MARJA LUBECK (Labour): Thank you, Madam Speaker, and a real pleasure to take a call in this third reading of the Fair Pay Agreements Bill. Our COVID-19 recovery plan is about investing in our people, and fair pay agreements are, of course, part of that. As we have said often, we are building back better, and, in fact, what Minister Grant Robertson usually says is that there is a silver lining on the darkest of clouds, when COVID hit us. And at this moment in time, we are at that silver lining where we are building back better.

Things have to get better, because for too long New Zealanders working in critical roles like our bus drivers, our cleaners, our supermarket workers, our aged-care workers, our security guards, and all those people who worked very hard during a pandemic to keep our country going and to keep us safe haven't had the bargaining power to ensure that they had better wages and conditions. So we've had very long periods in New Zealand where workers did get their fair share, but over the last three decades those workers have fallen behind. We heard that very clearly before from Minister Meka Whaitiri—the human cost, the cost to our communities—when she spoke about what happened with the workers in the freezing works.

I spoke in the second reading about that particular problem. It's a pattern that developed in New Zealand after the start of the Employment Contracts Act (ECA) 1991, and within a few years of the ECA starting, New Zealand saw wages and conditions for workers across many industries falling down and reduced significantly, and the freezing works were but one example that we heard about today. Opposition MPs shout about the good old times and how well we fared under the previous system. Wasn't it them who invented the term "rock star economy", when we, in fact, had people starving and living under bridges? So that was their rock star economy under the current settings.

But one of the consequences of New Zealand's very weak employment protection was that the share of the economic growth went not to the workers; we actually became one of the countries in the OECD that had the lowest share of the pay in 2014. What happened is that the rich got richer and the poor got poorer—actually, the poor had to work harder to even stand still.

It's actually important to note that even at the time, the IMF and the OECD have actually come out and recognised that inequality is bad for social stability and even bad for economic growth. In fact, papers were published after the global financial crisis that argued for strengthening of bargaining, because it would also strengthen people's terms and conditions. So fair pay agreements (FPAs) will be part of that mahi. FPAs will ensure that parties, unions, and companies will be able to negotiate a set of industry standards below which it can't be negotiated.

So the FPA legislation is going to change things significantly for workers and make sure that workers have fair, decent conditions and a voice in the workplace. Over the years that I've been a delegate and a union president and an organiser in the union, I've met many people who felt that they didn't have a voice. Now, we heard about Opposition MPs who've said that everybody is the same, everybody can negotiate a contract, and I know we're going to hear more about that. But what they do forget is a fundamental aspect of the Employment Relations Act 2000 is where it's acknowledged that there's an inequality in the power in the employment relationship. That's why we have employment legislation and that's why we need fair pay agreements, because the inequality most affects the workers that are more vulnerable, and that's especially the case for our Māori, for our Pacific peoples, for our young people, and people with disabilities. They are overrepresented in the occupations that could actually benefit from these FPAs.

One of our submitters—Council of Trade Unions Runanga—noted the disproportionate benefits that Māori would receive from FPAs, and said that "Given they are particularly affected by a lack of standards, they would benefit from a system of better wage fixing than the one we have, which has failed them." We heard similar sentiment from the Council of Trade Unions Komiti Pasefika, for Pacific peoples.

Well, workers are mentioned in my very first speech on this important piece of legislation, workers like Leava, Jess, Sui, and Gadi. They have suffered under our current system. They don't feel empowered to speak up, and they also don't feel they have a say in their working conditions. So the workers are at the centre of this legislation, and that's why I want to mention a couple of their stories here in this third reading speech; I'm sure they will be listening.

Leava came to us talking about working in excess of 70 hours, but after three years in the same job, she is still on that casual contract, earning not more than minimum wage. She hardly ever sees her family because she works night shifts, so when she works, her kids sleep, and when she sleeps, her kids are awake. But it also means she can never help them with their homework, she can never help them with their activities, she can't take them to church. She is basically never there for them. The company she works for recently lost its tender and they had a different contractor come in. Leava remained with the different contractor but her hours got cut; the workload stayed the same. So again, she can't speak up because she has seen with other colleagues what happens when she speaks up.

One of her colleagues is Gadi. She is a security guard. She has real mental health issues due to feeling that she has failed as a mother. This is the human cost that we heard Minister Meka Whaitiri talk about. Gadi started to think about suicide and she went to her doctor. She works 12 hours a day, five days a week, on the minimum wage. It's a rotation. She either works 6 p.m. to 6 a.m. or 6 a.m. to 6 p.m., but there's no training, there's no career progression, and she describes her life as just being in survival mode.

Sui is a security guard who works alone at carparks, at railway stations, and often she doesn't feel safe. She's casual, and it means her roster can change at any moment in time. She may work three hours at the library in Mount Roskill, and then she works three hours in Māngere, but if the distances are too far and she can't use public transport, she basically has to decline the job because she doesn't have a car. She said she can't plan anything in her life because of the uncertainty of her work and always having to be ready because she may be called to work at very short notice.

Now, all those workers have one thing in common: they work in industries that are trapped in what has been called a race to the bottom. So many of their employers would probably like to pay better and would like to look after them and give them better terms and conditions, but they are unable to do so because their competitor offers less, and as soon as they offer more, they will be out of a job. So in the case of Sui, Jess, Leava, and Gadi, their employer ends up cutting costs by cutting their hours, but not the amount of work. They make them pay for their own uniforms, they take away training opportunities, but they are required to do the same workload when their hours are cut. That means the quality of their work suffers and health and safety suffers as well.

Now, the Minister spoke about our friend Helen Kelly, and I once heard Helen Kelly describe this particular problem as a "jobs narrative that is being driven up to hammer any worker who might want to have a voice in the economy or world of work." She told her story like this: "work is a benefit, business is the benefactor, and workers are merely the beneficiaries. Workers should be grateful for a job; a job is a privilege." Employers should be lauded for the contribution they make to growing economic wealth. But as the Minister has said, both parties in this working relationship should be able to reap the benefits of their hard work.

So FPAs will help good employers by stopping the race to the bottom and getting undercut by the bad employers. So in the case of Leava, the cleaner on 70 hours a week on minimum wage, her employer actually wants to do the right thing, and like many good employers, they want to offer better pay, but, of course, if they do that, under the current setting, they would be disadvantaged. Without a floor, an employer who wants to do the right thing can't do so because to be successful, they need to drive down terms and conditions of their workers. I spoke about this in the second reading, because it's exactly what happened with the bus tendering process.

So FPAs are really common overseas. We see it in Scandinavian countries. Germany and Denmark are examples of countries that have really successfully worked with sector-wide agreements in place, and, of course, did I mention Australia? The Opposition frequently mentioned that the wages are better there. Well, Australia has been operating with this system for as long as I can remember.

So on flexibility—I googled this term because it's been used frequently by the Opposition. Flexibility says, "reduce minimum wages, reduce the power of trade unions, make it easier to hire and fire workers, and support zero-hour contracts in legislation." That's where we would be heading if they were to get another go at it. So I'd like to thank the Minister for taking this important legislation to the House; our officials, advisers, the Parliamentary Counsel Office and Office of the Clerk for their advice and support; the members on the Education and Workforce Committee; the Fair Pay Agreement Working Group; and all the submitters and all the unions who for so long held the tide back and worked so hard to get us to this point. I commend this bill to the House. Thank you, Madam Speaker.

JAN LOGIE (Green): Thank you, Madam Speaker. It's not often I feel like singing and dancing in celebration in this House. Right now I'm going to save you all from that trauma, but I've got the feeling inside, because this is truly a day to celebrate. This is a turning point for our country where we start to bring back some balance, and that is about raising those who have been doing the work, the work of keeping us safe through a pandemic—of cleaning our spaces, of providing us with food, of getting us around, of doing that caring work for our kids and our elderly and our people, of producing and packing and getting that food to the supermarkets and those stores. So many jobs; so many of our people who have been looking after us—those of us, whether it be transitory or not, who are in a position of privilege in this country. This is about raising them to the place they deserve, to enable them to get some benefit from their work, benefit that helps them stand tall and proud, that recognises that their knowledge may have some value to their workplace and to their industry; to enable them to afford rent and put food on the table and pay an electricity bill—unattainable things, at the moment, for so many people in this country.

I do just need to say that in terms of the context of the inequality that is not being mentioned by the National Party or the ACT Party in this debate, New Zealand had the world's largest increase in income inequality, the largest increase in the world, in the 1980s and 1990s because of decisions made in this place. It wasn't a change of the work habits of our people or their ability to bargain; no, it was the decisions made in this place to take away the power and the ability to collectively organise from working people, as well as the slashing of benefits—we've still got some work to do on that. But this is about restoring that. It was such a profound increase in inequality, where the top 1 percent's incomes doubled over those 20 years while they only increased for those at the bottom by about 30 percent, from low rates, and the value of the top 10 percent became nine times what the lowest-earning 10 percent was, as opposed to the five times more it had been before. That was a profound social change that has impacted every single person in this community, and it brought me to tears when the Hon Meka Whaitiri was describing the impact of that on her community. That was a familiar story to me, from having grown up through that time in Invercargill. It has impacted communities in every part of this country, communities of geographic location as well as communities of identity, and that some of our young people have never known decent pay or stable work conditions is a shame.

But that's what National and ACT are defending, that flexibility that they want to hang on to, which has resulted in Pasifika women earning 25 percent of the wage of a Pākehā man—entrenched, embedded inequality that is unjustifiable and is only a result of discrimination and a thing they call unconscious bias, that is a result of our laws. This is a point of turning that around.

This is not just about pay. We talk about pay, but it's also about—the "mandatory to decide" aspects will be wages, hours, training and development, and leave. National says, "How do those things impact productivity?" Work a 16-hour day with no training, day after day after day—you're going to be a peak performer, aren't you? It may be a low cost of business, but you're not going to be as productive as you would with training and clear hours.

That is an aspect of this that we haven't discussed much that I do want to just touch on, which is that the fair pay agreements (FPAs) are bringing working people's representatives together with business to actually tackle problems across industries. We're seeing this with bus drivers; the potential in hospitality I think is huge, as another example where we know the potential of bringing those voices together will help our businesses. There's been research done that has shown that poor leadership in our businesses is costing the economy $5 billion a year. We do not have good managers in this country as a rule, and that is backed up by research. But, flexibility! The core problem with the leadership is a focus on driving down costs and not recognising the value of people, in investing in them and listening to their experiences and being able to learn from them to improve the business. Fair pay agreements create an ability to actually address issues right across a whole industry that will make work life significantly better for workers, but also a chance to actually reduce wastage and improve productivity.

We do need to recognise, too, that status quo, where, in hospitality, the research that was given to us in the committee was that half of workers surveyed in hospo had experienced harassment, 80 percent of them had not been given any training, over 20 percent of them weren't getting their legal entitlements of holiday pay or rest breaks, and not even 30 percent had even been made aware of their health and safety risks. This is the status quo that National and ACT are fighting so desperately for.

Mark Cameron: I hope you can validate that.

JAN LOGIE: Yeah, it's an Auckland University of Technology verified survey—quite well respected; quite verified, I would say.

These are the things that this bill has the potential to change, and I really just want to touch—we've heard from National saying that, you know, the problem of this is that once you start an FPA it can never be stopped, you can never take it out. I mean, you know, there are issues in terms of review periods, and they've got time frames on them and all of that, but we'll ignore that and we'll say they can never be taken out. But, you know, as if we need to be scared of better conditions—frightening. Frightening that we might get better conditions. Frightening that we might sit down with the employers and have a discussion—frightening. I'm not really sure what world they live in that that is so threatening, and that they see the unions as frightening when the unions are the collective of working people. But that tells us what they think of working people—that they're scared of them.

Hon Member: Rubbish.

JAN LOGIE: That is what I hear in that argument when they're saying, "Unions!" as if they're so bad. Actually, they're scared of working people, and I don't think they should be. Like, part of me wants to say, "And they should be, because union power, we're going to take them down, that 1 percent." I do hope that does happen, but, actually, that is not what this is setting up. This is just setting up a process of bringing people together to find that base rate that enables people to live decent lives. It's not an awful thing. It is a thing that will help transform our country, and we are proud to support it.

CHRIS BAILLIE (ACT): Thank you, Madam Speaker. I think that's a great example of where this debate has got to. It's become emotive—

Marja Lubeck: Factual.

CHRIS BAILLIE: —versus fact, and I think that's a great example.

We come to this place with different experiences. I've been in the workforce for 43 years and I've been an employee for that length of time. I've belonged to unions, I've had employment contracts, and I've owned a business for the last 12 years. This legislation is a silly piece of legislation. It's a silly name for the bill. It's not fair, it's not about pay; it's about everything else—well, not only about pay. And it's not an agreement if one party can make a decision.

We don't oppose fair pay, we actually think the opposite: employees who work hard should be paid really well if they are productive for the business. Good, hard-working, loyal employees are the ones that are going to suffer from this legislation.

And Michael Wood has said that compression—compression—of wages is a good thing. And I think workers need to really understand what that means: if you work hard, you're not going to get the reward that you deserve.

Jo Luxton: That's rubbish.

CHRIS BAILLIE: Absolutely true. Such a backward idea, it shows a complete ignorance of what actually happens in businesses around the country. We've heard this rhetoric of a race to the bottom. Here's Retail New Zealand: supermarket grocery workers' average wage, $24.82; food beverage cafe workers' average wage, $25.92; hardware, building, garden, and pet supplies average wage, $28.23. The minimum wage is $21.20. That doesn't include in-store discounts, the flexible working hours that the employees want, and other stuff that just doesn't make consideration.

The bill takes the rights of the worker to plan their own destiny. And even if they don't want any involvement in a fair pay agreement (FPA), they have no choice. And in the retail sector, as was mentioned before, half a percent of the employees can start an FPA—that 99.5 percent; if they don't want it, tough luck.

We will see a return to the industrial chaos of the 1970s and 1980s industrial awards, an era where the Minister wasn't around, I'm sure, and lots of his colleagues. I grew up in a very pro-union household where my father was a marine engineer and I remember well the strikes of the rail ferries, generally around Christmas time—Christmas time. One particular one—

Hon Kieran McAnulty: Have you read the bill?

CHRIS BAILLIE: Oh, absolutely. I could see the dangers of unions as a 12-year-old. And just watch this space when the beds are going to be want to be made and included in FPAs.

The current employment contracts legislation has provided for the necessary safeguards and flexibility for employees, and they've proven to be very successful over the last 30 years. The fact is that, after declining through the 1980s, employees' pay and conditions have improved substantially since the introduction of the Employment Contracts Act in 1991. There's a chart that Mr Wood will ignore, but it actually shows that, since 1991, things have been improving.

Employment contracts—it's as if the previous speakers I've been listening to have never seen or heard an employment contract. They cover everything—everything—that this bill purports to cover and even more. This is just an absolute waste of time. I was asked the other day, how is a 16-year-old meant to negotiate with a 50-year-old employer. And the employment agreement specifically says you take it away, you get advice, and after a week, you come back—it's all covered. And I had to ask whether that person, in particular, thought that 16-year-olds should get the vote as well. And you can imagine what they said.

Once again, the most divisive Government in this country, in New Zealand's history, has excelled in pitting one section of society against another, whether its landlords against tenants, farmers against townies, and employers against employees. The philosophy of divide and conquer is obvious, and it's no more evident than in the bill. Clause 92D: "Each employee bargaining side for a proposed FPA must use its best endeavours to ensure that Māori employees are represented effectively in the bargaining process … seeking and considering feedback from representatives of Māori employees;", etc. No mention of Chinese, Pasifika, women, or disabilities—I have a lot of faith that New Zealanders will treat this division with the contempt it deserves.

Business owners, those New Zealanders with a work ethic and a vision, were once employees. They know what it's like to work hard and get ahead, or at least try. Anyone who owned or bought a business before 2017 must be wondering why they bothered. Before taking the step to buy a business, due diligence has to be done to make sure the business is viable—you can pay your bills, you can pay your rates, your insurance, your everything else, but, most importantly, wages. Make sure you can pay the wages. Business owners pay their staff before they pay themselves. They have had to take out loans in order to pay their staff. Business owners aren't the evil, evil enemy that Labour likes to portray them as.

But all businesses have gotten are constant attacks from this Government, with the minimum wage, the extra sick leave, and extra statutory holidays, to name a few. They even tried to push through a bill which would make employers liable for their employees attending parent-teacher interviews. They don't even think—they don't even think—that annual leave is worthy of their kids. I heard Jan Tinetti say today, in the House, that you can't expect to write about or understand something if you haven't experienced it. And I think it really does explain Labour's ignorance when it comes to business.

This insidious bill amounts to unionism by stealth. New Zealanders can join a union if they want to, they shouldn't be forced into joining one just because of Labour's blind ideology. It's bullying to the extreme—forcing people to participate in a process they don't want to, and threatening the already overburdened business owners with bureaucratic nonsense and ridiculous conditions. That's bullying. And the scary thing is Labour and the Greens just can't see it.

This bill is unnecessary, complicated, and it will cause more problems than it seeks to fix. I'll end with a quote from a submitter who has 40 years' experience in collective bargaining, both for employees and employers. "We anticipate workplace divisions, inflation, vulnerable-business closures, unemployment, lowering of the New Zealand productivity rating, increase in disputes, and lots of emotional disruptions and litigation. A marked increase in mental health issues will likely result due to individuals sensing they have lost another control over their lives." For the sake of the hard-working employees of this country, ACT opposes this bill and we'll get rid of it as soon as we can, next year. Thank you.

CAMILLA BELICH (Labour): E te Māngai o te Whare, ka nui te koa o te ngākau ki te tū ki te kōrero i runga i tēnei kaupapa o tēnei ahiahi—it is a pleasure to stand and speak on this significant bill for its third reading: the Fair Pay Agreements Bill. The day has finally arrived.

In the general debate, we have just had the Leader of the Opposition start with a folk tale, and I want to counter with another one, one we all know. It is the tale of Chicken Little. Chicken Little was hit on the head by the falling acorn, and we know how the story goes. Chicken Little concludes not that the acorn has fallen but that the sky is falling, and Chicken Little rushes around telling all of the farmyard of the imminent destruction they all face. There are some similarities here to Chicken Little in the Opposition.

We heard the Minister for Workplace Relations and Safety, Michael Wood, go over the list of improvements for the lives of working people that the Government has brought in in the last five years and the National Party's opposition to that. We heard about how they opposed the increase to sick leave during a pandemic, we heard about how they opposed the increases to the minimum wage, and we heard about how they opposed the introduction of Matariki as a holiday, but it is not just in this term of Parliament that we have heard the same oppositional rhetoric from the National Party to increases to working rights.

This is something that has happened again and again, and if we look back to the Employment Relations Act 2000, we see that very similar arguments were used as have been used in this bill today. The Rt Hon Jenny Shipley, in the first reading of the Employment Relations Act 2000, alleged at the time that Labour was "Taking New Zealand back to ideas that most people thought were extinct" and that it was "no way to forge the future for this country." Does that sound familiar? It sounds quite familiar to what we heard from Scott Simpson, who was saying that we were old-fashioned and that we were taking the world back to the 1960s.

Then we look at what Max Bradford said in relation to the Employment Relations Act 2000. He said, "why is the Labour-Alliance Government digging up the old processes, the old institutions, the old dinosaurs of the past in order to get it? … We have a grand march backwards into the past"—same playbook, same old tired arguments, same unfounded scaremongering about the improvement of workers' rights.

So why is the National Party telling New Zealanders to believe that fair pay agreements will really cause the sky to fall—why? Because workers are getting a fairer deal. The sky did not fall because of the improvements to workers' rights in the year 2000 under the Employment Relations Act—in fact, we've heard from the other side how things have just got better—and the sky will not fall because of fair pay agreements in 2022.

Good employers will take advantage of the new opportunities to compete on quality and service and not slashing the wages of the people they depend on. Good employers and their representatives will participate in bargaining in good faith. Good employers—and I note most employers in New Zealand are good employers—will often say that their employees are their greatest asset, and while this is true, it is important to remember that workers are far more than the return for their labour. They are people, and we have heard again and again from this side of the House "He aha te mea nui o te ao? He tangata, he tangata, he tangata." They are people, and they deserve respect.

Working people deserve to live a life of dignity. They should feel secure and be part of a society that treats them fairly, and this is what fair pay agreements are all about.

Good employers will adapt to fair pay agreements, they will go about their business, and they will turn a profit, only this time, under fair pay agreements, they will have more secure, contented, and, likely, productive employees. The sun will shine and the sky will not fall.

On a more serious note, the fair pay agreements that the Government is bringing in are to build a fairer and more resilient society for all New Zealanders: business owners, workers, unions—people. It is why we came to this place—to make this type of change, to change the frameworks that we work under to make a better New Zealand for New Zealanders, and strengthening our industrial relations framework through the fair pay agreements makes a fairer and more equitable society for everyone.

I want to take a moment here to thank the unions and working people that they represent. This has been a long time coming and has been the result of the work of many, many people, and I just want to note a few of the unions who I know are listening to this debate today. The Council of Trade Unions, E tū, FIRST Union, the Public Service Association, and the Tertiary Education Union are just some that I note who represent hundreds of thousands of working people who will benefit from these fair pay agreements. So I just want to note that this, today, is a result of many, many hours of work and many struggles from many different people.

The Minister has said that we must value work. When I came to this House, in my maiden speech I said that I was brought up to believe that a job worth doing was a job worth having, and a job worth having in this country and a job that must be done in this country should be treated with respect. This is fundamentally what this framework of fair pay agreements is all about. As the Minister has noted, we have been in this party fighting for the rights of working people for over 106 years. This was a commitment in our manifesto to bring in fair pay agreements, and that, today, is exactly what we are going to do.

I just want to note, before I conclude, a comment made by the ACT member Chris Baillie, talking about how there'll be an increase in strikes. It is fundamentally untrue that there will be strikes as a result of this piece of legislation. Strikes are not permitted—some have argued they should be. But they are not—if you read the legislation—allowed under this bill, so it is purely disinformation to suggest otherwise.

In the first reading, I reflected on the legacy of union leader and my friend and mentor Helen Kelly. We have heard again from the Minister today about the work that she did that resulted in this bill before the House. In my maiden speech, I shared Helen's vision that she articulated in 2013 at the Labour Party conference, and I will quote from this: "We need a new vision … one that recognises the best of human nature and … that our individual happiness is dependent on each other's rights and needs as much as our own."—our individual happiness is dependent on each other's rights and needs as much as our own.

Fair pay agreements recognise that as a society, we can do better. We can set minimum standards across occupations and industries, and it will be better for everyone in New Zealand once that floor is set. Because Helen said that our individual happiness is dependent on each other's rights and needs as much as our own, I would like to note that through these fair pay agreements, that is what we are progressing today.

Helen Kelly passed away in 2016, but her commitment to working people did not die. It lives on in this bill today, which I, again, proudly commend to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call Sam Uffindell—five minutes.

SAM UFFINDELL (National—Tauranga): Thank you, Madam Speaker. Firstly—you obviously know where I'm going to go with this—I just want to thank everyone that's been involved. I know there's a lot of people here and, obviously, on that side of the House as well, for whom this means a lot. So I appreciate that this is a big moment for you all and I just want to recognise all your hard work on that.

I would also like to start with the Minister because there are a few things that weren't addressed during the previous stage, mainly around how it would apply to professional services. I know that this is probably not intended to address that, but this is a very big part of the economy—

Hon Michael Wood: It's the stockbrokers and the merchant bankers, that's who we're here for, buddy.

SAM UFFINDELL: —and it was never talked about. It's a very real concern, though, Minister, and I would like to have understood how it would apply and you never answered me. I also continually asked for feedback on how this would work when people, say, in sales roles—and you've done a bit of selling before as well, I know that—and how that would apply when they are paid on commission instead of just a wage. Because the truth is a lot of people don't just get paid a wage; they get paid a commission instead. A lot of people—and you mocked me for this, when I was talking about technology companies, young enterprising start-ups around the country—instead of paying higher wages, they give employees share plans. I know that most people don't get that Minister, but some people do, and that's where a lot of growth is going to be in the future. It's already happening overseas, and that's why I asked it. I wasn't just having a laugh. I wanted to know why we are applying it in such a broad-based manner. And that is what you have done. I can get where it does apply, and, yes, I know that everyone's really passionate and that's probably what everyone here represents, but it's across the whole economy, across all industries. You are really going to hammer people, because it takes no account for the differences in businesses, it takes no account for the small businesses, it takes no account for people who pay or live in sales roles, and I really wanted that addressed.

My colleague Erica Stanford also talked about migrant workers, and close to where I live—in the country—we have Recognised Seasonal Employer workers around and they are on the median wage. They are above Kiwis, and we wanted to know how that would operate, and we didn't get an answer for it. They are also entitled to minimum hours the whole time—Kiwis are not. That wasn't addressed. You didn't listen to Business New Zealand; they doubled down on how bad this was. Despite widespread concerns—the coercive nature of this—you retained all the bad elements. In fact, it actually got worse after the select committee process, and that's what the Employers and Manufacturers Association said as well. You were also given advice about how it wasn't going to be all rosy like you thought it would by the Ministry of Business, Innovation and Employment, and by Treasury, and they were ignored. That's a common theme with this Government, that you just don't consult properly with people because you don't really believe in consultation outside of your own echo chambers—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! This is a warning I've given this particular member in the past. Please don't bring me into it. Whenever you use the term "you", you're not referring to the Minister or anyone else in this House; you're referring to me.

SAM UFFINDELL: My apologies, Madam Speaker. I am learning and will continue to learn. Thank you for that.

People on that side of the House don't get into consulting. People on that side of the House live in echo chambers. People on that side of the House actually haven't had a lot of experience in the workplace. I read something recently about your top five: Ardern, Robertson, Woods, Wood, and Hipkins—five years in business, and I know a bit of that was selling fish and chips and Christmas trees, but I'm trying to get you guys, and have been this whole time, to understand how the employer could look at it. And you never have, and the consultation that you've engaged in has been very poor.

So I will strongly stand against this bill, and I am looking forward to when there is a National Government in power next year, and there will be, because that side of the House has put constant costs on to businesses; whether it be inflation; whether it be the Minister not letting workers in here and having an enormous bottleneck in that area; whether it be the jobs tax that's coming up; huge, reckless spending; and now this. The businesses in New Zealand—when you go talk to them—have got real concerns with this Government. So I am looking forward to us coming into power and repealing this bill. Thank you.

ANGELA ROBERTS (Labour): Kia ora, Madam Speaker. It is a great, great privilege, and I am very humbled, to stand and take a call on the Fair Pay Agreements Bill for the third reading—finally.

We've heard a lot from the other side of the House—from Chicken Little and his mates—about how old-fashioned we are. There is nothing old-fashioned about approaching a problem collectively. As a society, we look after each other, we lift each other up, we get through the tough times, and we cherish the good times. There is nothing old-fashioned about that.

Something that is old-fashioned is something that came in over 30 years ago: Employment Contracts Act. That divided this country, forced us into neoliberal economic policies—that is old-fashioned. Even the IMF says it ain't working. We've had plenty of time, an entire generation, to work out that it didn't work. It is a failed experiment, it is old-fashioned, and it is time we move on, and thank goodness!—because of the huge amount of work we've already heard and acknowledged today from workers, from advocates, from staff, from members of Parliament, from members of our communities for years—this old-fashioned idea is out.

An interesting observation when we reflect on the years of work that has gone into this bill, is the diversity of world views that came to the table. We've heard about Helen Kelly and Jim Bolger; they came and they worked on this because they knew it was important. Jim Bolger said, when he accepted the offer to chair the working group, "The goal of the report was to support workers and firms to drive productivity growth and share the benefits." Who can argue with that? We came together, we did the mahi, and we are here today.

We've heard from the other side "get a better job" about workers who aren't getting paid enough or who have poor conditions. Fair pay agreements are about making your job better. Some has got to do it and we are grateful that they do. It isn't about getting a better job; it's about your job being better.

We've heard from the security workers who do not have the right gear or training to deal with situations that none of the rest of us are able to or want to deal with. We heard from the bus drivers who have split shifts and never see their families and can't coach the next soccer star. We've heard from our cleaners about the fact that they never see their babies or their grandchildren. The work that they have done to make their children's lives better cost them the living of their own lives. They work so hard.

I just need to finish—I could go on for a long time, and I'm really aware that we've got progress to make. I just want to, I guess, talk about the bargaining. This is about collaboration; it will be able to be nimble and responsive because people will have to sit down. They won't be able to go on strike and they won't be able to walk away. There is an obligation to conclude because it's important work to be done for all of society.

I want to acknowledge the Hon Meka Whaitiri when she talked about our communities that were decimated. My husband's family comes from Waitara. My father-in-law was a freezing worker and a staunch union leader. We have communities like Waitara and Patea who are still suffering today.

This legislation, when it has passed, will make every one of us in this country richer; not just with a coin, but for our lives. It is with this, I commend the bill to the House.

HELEN WHITE (Labour): It's a privilege to take a call on this particular bill, the Fair Pay Agreements Bill, because I worked as an employment lawyer for 25 years. So I first want to acknowledge the pain that Minister Whaitiri talked about. That pain is something I saw repeatedly in my career. I saw those rundown towns. I saw the dependence on the State from people who were actually working. I saw the stress that it caused. I saw the hopelessness that it caused. I saw the mental health issues it caused. I saw the alcoholism it caused. I saw all the problems that are caused by just not being able to make ends meet. That is an undignified thing, and it is absolutely a shame in this country that we were ever in that position, and we are actually having to build our way out of it.

The whole point of this legislation is to focus on our most—most—vulnerable. So when Erica Stanford is perplexed by the public interest test, I would urge those listening to this to have a look at that test, because it protects those who have little bargaining power, those who have low pay, those who have long hours, those who have no career path. It gives them better pay, more bargaining power, better hours, and a career path. That's what Government is for, to protect people like that. That's our job, and I'd ask Erica Stanford, amongst others, to look at it, because she is talking often about the protection of migrants. So she has those protections in mind, and we need to actually join the dots here, people. We need to make sure everyone in this country earns a decent living. So I'm not actually that worried if we actually have to meet the cost of migrant labour in our own hometowns. I'd like them to be earning the same amount. I think that's a really good start.

One of the things that I talked about the other day, when I was talking about this debate, was a woman who had haunted me. It's really hard when you're a lawyer, because you can't tell many of the war stories. The best ones are, of course, secret. But it was a situation where the woman was on such low pay that it was just above the minimum. She was in her sixties, and she had worn herself out because she was a caregiver, and you lift people. The answer for that was to frustrate her contract: no one's fault, she goes, small payout. And I never felt right about it. I was dealing with a lawyer on the other side who earned, probably, $600,000, and for him, I suspect, it was a game. I suspect it was quite fun to knock that woman around and to get the lowest possible price for his client. I don't think that's a funny story. I think it's utterly disgusting that that happened in our country.

I also had a case with a beautiful union called the Amalgamated Workers Union, and it was for the workers up at Golden Bay Cement. In that case, it was about people who actually fought for a career path. They bargained for it, and they got that career path, and then the employer said, "Oh, you can't have that, because only the union members get it. So you can't have it, because that would be discrimination." Well, we took that case all the way through the courts system, and a full court found that that was not a problem and that they had bargained for it and it was important. But I still remember the evidence in that case about how important that career path was, because that career path meant that those workers could go from lifting concrete, lifting bags, to something that was actually going to be sustainable through their entire career. That's an incredibly important thing if you're in the working class—that you can keep working.

I have never forgotten that, but I've also always contrasted the two stories. One person was a female, she was isolated, she was in a different situation; the others had collectivised, they were working together. What this actually will do is mean that the worker that I was talking about—the caregiver—has a hope, can actually be protected, can actually be given at least a minimum. That's all it does. It actually doesn't take away great flexibility. You can always argue for more. You can always bargain for more. These are the minimum standards. And, actually, what it does is give, also, an employer who does the right thing the chance not to be undercut by somebody who's prepared to cut wages or terms and conditions or career paths. It actually levels the playing field, and, for me, feels like an incredibly important piece of the puzzle.

I want to just move to something really sad that happened to me this week. I found out that a person who volunteered for me, who was my friend, Peter Barrett, had died suddenly. Peter was a lovely guy who had a lot of very strong values. He had opened a business with his partner, who had actually come in as a migrant and she had been working as a masseuse, and they'd opened this beautiful spa. He pays the living wage. He was very clear that that was one of the things they wanted to do. You can see the situation here was one where his partner would have come in on very low wages, and actually now she was in a business, working with her partner, and they were paying the living wage to their workers. Well, why would it be fair that someone else, somewhere down the road, could open a spa and actually pay workers less? Why wouldn't we want there to be a minimum standard for those workers? Because it's not very much. It's not asking the sun, the moon, and the stars. Actually, if you don't pay people properly, who do you think pays? This is one for the National Party: who has been paying? The taxpayer has. We have been subsidising those workers over and over again.

We have to put food in schools, and that's because we need food in schools under our current economy. And I am proud we do it, but one day I want it to be a situation in New Zealand where wages for everyone are dignified, where everyone stands on their own two feet, and that is a society I want to live in. And that is a stark contrast between the National Party and the Labour Party today—that we understand that; that we understand where we're going. Now, it is true that it is worth remembering that there are epiphanies in this place. That Mr Bolger, the Prime Minister of this country for some time, actually was the person who was the author of the report. He's the architect of this report. And what he said, which is true, is that we work longer hours in this country and we are less productive than most OECD countries. So he crafted this, which has turned into this bill, and it is a bill that actually is all about fair wages, it's about sharing benefits, and it's about higher productivity. So I commend this bill to the House.

Hon PAUL GOLDSMITH (National): Thank you, Madam Speaker. Well, here we are, five years to the day since this Government was sworn in, I believe—five years—and the Prime Minister's in Antarctica. She doesn't want to celebrate five years; Parliament's sitting and she's in Antarctica.

What are we celebrating after five years? Endless failure to achieve anything. When it comes to housing, what have they achieved? Where are the KiwiBuild houses? Nowhere to be found. When it comes to emergency waiting times at hospitals, nothing there. Mental health? Nothing there. Education? They haven't even got the kids to school. Law and order? The ram raiders are running all over the place. The slow tram coming down Dominion Road? Not to be found. But there is one thing. There is one thing that this Government can do; it can pass bills. That's one thing it can do. And so, yes, they've got a majority to pass a bill and they're all here and they're celebrating the union movement. They can pass a bill. That's the only thing this Government is capable of doing.

And, yes, there's not a person in this country who doesn't want to see higher wages for New Zealanders. Everybody wants higher wages and they want better resources. The question is: how do you achieve that sustainably? This Government believes the way to improve wages is to pass a law to have higher wages. That's how they think they get higher wages. Or the other way. There's two ways you can get higher wages under Labour's thinking. One is to pass legislation to legislate for higher wages. The second way is to shut the borders and stop immigrants coming in. And so if you have no immigrants coming through, you have a worker shortage, therefore wages go up. That's their approach to having higher wages.

Well, our view is if you want to have sustainably higher wages, you need to have more productive businesses. That's how you get sustainably higher wages. Productivity is improved by investment and by higher skills and by all those things that are not related to Governments passing legislation. I stood up during the committee stage and tried to suggest to the Minister that perhaps one of the things that could be considered and talked about during the development of a fair pay agreement might be the productivity of the business. And, of course, he voted it down. He did not want any discussion of productivity as part of these misnamed fair pay agreements. So I can commit to the House that if National is fortunate enough to win the next election, this will be gone. We'll be repealing this. It will not exist. So you can campaign on the mandatory union deals all you like over the next year, because they won't survive a change of Government.

Why are people concerned about their living standards? It's because we've got uncontrolled inflation. Wages are going slower than inflation under this Government. New Zealanders are going backwards. They're struggling because of the cost of living crisis. Wages are behind and people are feeling the pinch. And we've heard lots of stories of people who are struggling in this country. There's no question. There are many New Zealanders who are struggling; not just people who are on wages but also many small business operations are struggling to stay afloat, and they are being confronted every day, first, by the difficulty of finding workers, and, second, by the difficulty of dealing with all the additional costs and regulations that this Government passes and a whole host of other challenges that they face. If they are a small retail business, they're facing ram raids and smash and grabs every second day. They're struggling with all sorts of issues.

But what this Government knows how to do is add extra cost and difficulty for those businesses as well. So their response is to legislate for higher wages, to stem the flow of immigration, and hope that will force up wages. That, of course, is not sustainable. What you need is higher productivity.

So if we look at this bill, what does it do? What it does is it undermines the flexible labour markets that have been one of the pillars of our relative economic success over the last three decades. It's part of the reason why we have such low unemployment rates in this country, and they want to unwind that to a one-size-fits-all approach whereby if you're a cleaning operation—an example has been used many times—and if you employ 5,000 people you still have to deal with the same situation as if you were a mum and dad operator with two people. Michael Wood has recognised that there is a need for regional variation—he recognises, grudgingly, I think, that there's a difference between Auckland and Eketāhuna and the needs and requirements of businesses operating in both those environments.

So there's a little bit of flexibility for regions, but he refuses to recognise that there's differences between very large businesses and small businesses. What you can cope with if you've got 10,000 employees in the supermarket context, in terms of terms and conditions and hourly breaks and penal rates and holiday time and all those sorts of things, research and development and training—all those things you can cope with if you've got 10,000 employees are not necessarily things you can cope with if you've got two employees. But they don't recognise that. So if you're running a little Four Square in Hokianga, you've got to be exactly the same as if you're running a big operation in central Auckland, and that doesn't work. It's not practical and it's going to make it difficult.

And so on the one hand, the Government spends all its time saying it's going to get tough on the supermarkets, "We're going to get the Commerce Commission in. We're going to go hard on the duopoly.", and, on the other, they're bringing in legislation which makes it easier for the big players. Who do you think is going to be actually doing the negotiations for these fair pay agreements? Do you think is going to be the little players, the little mum and dad operations? No. Do you think they're going to have any involvement in the negotiations? Not at all. It will be the big players who will negotiate; they'll negotiate, naturally, because what will come out of the whole process will be things that suit the bigger players. It's always the case with regulation; that's going to be the case with this. So on the one hand, they're going to be tough on the big players. On the other hand, we're going to pass more regulation that the big players will be able to negotiate more easily than the small players. So surprise, surprise! It doesn't make any sense whatsoever.

Secondly, the better name for this bill is the "Mandatory Union Deals that are Imposed on Workplaces Bill". There's no choice. There's no choice about this. We've heard from Willie Jackson that democracy has changed in this country. Most people haven't sort of been aware of that. They're surprised that we didn't have a referendum on our democracy changing. But, apparently, according to Willie, it has. And when it comes to this bill, we see the sorts of things that are involved in that.

So instead of having 50 percent of a workforce agreeing to go into a fair pay agreement, all you need is a handful. You'd need 10 percent maybe, but say you've got 200,000 workers in an industry, all you need is 1,000—well, that's less than 1 percent of the industry and they say, "OK, we're going to have a fair pay agreement." If a tiny minority say we're going to have a fair pay agreement, once it's started, there's no stopping it.

Hon Kiritapu Allan: Isn't that wonderful—isn't that wonderful!

Hon PAUL GOLDSMITH: That's right—that's right. So the 70 percent of the Labour caucus who are ex-union members are happy about this and we can understand that. So celebrate it, because after five years of achieving nothing on the issues that matter to New Zealand, you can come along here today and pass a bill. That's great! This party is capable, because it has a majority, of passing bills and this is the latest one that they've passed.

It imposes fair pay agreements on workforces, even though they don't vote for them, even though they don't want them. So the employers get dragged into the process. They've got a gun to the head. They either agree with it or, if they don't agree with it, it goes off to the Employment Relations Authority and they impose those conditions on those businesses, even though they won't have had a chance to have their say and they have no choice about whether they're going to be involved in it.

So the point—the simple point—I'm making is this. Every New Zealander wants to see higher wages for New Zealanders. And what we see is a Government that truly believes that the best way to get higher wages is for the Government to come along here to Parliament and pass a bill that lifts up wages through minimum wages and so forth—[Interruption] that's great—regardless of whether a business can afford to pay that or not; it doesn't matter. That's an irrelevant issue, according to this Government. The productivity of it, the international competitiveness of the business doesn't matter. That's irrelevant. It's only that this does this Government passes the legislation.

The second route is to starve off immigration and reduce the workforce. And then, of course, at the same time they've got make-work schemes trying to hire New Zealanders at a time when businesses can't get access to workers. But that's a separate issue.

So this Government's view is that's how you lift wages. Our view on this side of the House is if you want to sustainably improve wages over time, you need to have more productive businesses. And that is going to be based, sadly, not on legislation but on free markets and people being prepared to invest their own capital and to grow their businesses.

Hon GRANT ROBERTSON (Acting Prime Minister): There is so much I could respond to in that contribution from Mr Goldsmith, but today is a good day. Mr Goldsmith is a historian by training, a noble profession I might add. So I want to start for him with a short history lesson.

The genesis of this bill, this great piece of legislation, comes 30 years ago. Now, 30 years ago, which might surprise some people, I was working regularly in the South City New World in Dunedin in the fruit and veggie department. Anyone who wants to know the secret for how to properly cut a pumpkin up, lessons will be given in the break. But those 30 years ago, I worked alongside some of the best people I have even known, some of the most hard-working people I have ever known who were on the checkouts, who worked day and night in the butchery, and who worked day and night in the delicatessen, who were up at four in the morning buying the vegetables that were sold there. And that year, 1992, was the year in which the impact of the employment contracts hit in my workplace. Now, I was a student, I was able to make ends meet, but I watched the value of the wages of those hard-working people, who worked every day to feed their families, erode. Because by design, a system was created by the then National Government to ensure that working people's share of income declined.

It was not an accident. It was, as Helen Kelly told us, by design. Thirty years ago that experiment was foisted on New Zealand people, and ever since that day, working people have been going to work and not getting a fair day's pay for a fair day's work because their rights were eroded, their conditions were eroded. What we've heard in the House today, and over the last few days—here's the history lesson for Mr Goldsmith: Ruth Richardson is alive and well and kicking over there, because they say they're going to repeal it. They want to, by design, lower the wages of working people. The message for New Zealand, for working people across Aotearoa: National hasn't changed. Thirty years on, they still want to see the wages of working people decline, the share of our national income that working people take home. They deliberately designed the system to reduce that. Well, today we turn that around. Today we make sure that working people can finally get the opportunity for that fair day's pay for a fair day's work.

During the period of COVID, we saw a lot of talk about essential workers. We celebrated essential workers. I can remember writing a small piece for the front page of the Dominion Post to celebrate the people under level 4 who were going out day in, day out, to make sure that we were all healthy and well. Our cleaners, our bus drivers, our supermarket workers—we celebrated them. And I can remember writing that day in the Dominion Post, "Maybe, just maybe, this will be the moment where in New Zealand we stop and we say, 'If someone's an essential worker, maybe we should show that we value them as an essential worker in the way that they are paid.'" Again, today we take serious steps forward in making sure that that happens. Our cleaners and our security guards, our bus drivers, the people who make sure that the economy ticks along have for too long been forced into a race to the bottom. Today we turn that around. Today we turn that around.

I want to say some thankyous at this point in my speech. I want to thank the Minister in charge of this bill, the Hon Michael Wood. Michael, your work on this has been phenomenal, not just sitting in that chair there for goodness knows how many hours, answering banal questions from the members opposite. But the work that you have done to shepherd this legislation to this point, it is a Herculean effort. You deserve every congratulation for what you have done.

I want to thank the wider labour movement in New Zealand, many representatives of whom are gathered together in the gallery today. The labour movement has taken this project on because it means fairness. It means giving working people a shot at getting their fair share. I want to congratulate every union member, every working person in New Zealand who has supported this bill. I want to thank the members of the E tū union who lobbied and lobbied and lobbied and told their stories to us time and time again. The people who clean this building, the people who work out there on the front line who are security guards dealing day in, day out with difficult issues. You came, you told your stories to us. They mean something. It means something to all of us today. And I say thank you to you for what you have done.

I want to thank some people who are no longer with us. In particular, I want to acknowledge Helen Kelly and Peter Conway, two giants of the union movement, the labour movement in New Zealand. Two people who talked about this very issue. And it was interesting to hear Mr Goldsmith mention a Four Square worker in the north of New Zealand, because that's the example Helen Kelly used to give of why we need fair pay agreements. Think about the imbalance and bargaining power of a Four Square worker in Kaitaia when they're up against their employer. They don't necessarily have people around them who can help them bargain—that's what this was about.

Here's what Helen Kelly said a few years before her passing. She said, "There is a cultural problem in this country. People think workers are lucky to have a job. They shouldn't bite the hand that feeds them and they should put up and shut up. The bottom line should include workers having a secure agreement about how their pay is determined. It's not much to expect." Helen drove a movement inside the labour movement to make sure that we reached out beyond those who we traditionally talked to, that we said there was an audience of people here who understood that the race to the bottom was wrong, that there was an opportunity, if we got the legislative settings right, to set the minimum—shoot for the moon, but set the minimum. I want to acknowledge Helen. It was six years ago, just a couple of weeks ago, that she passed away. Today we do something that she wanted. We do something that she wanted for the working people of New Zealand. And I say thank you to Helen and thank you to Peter for the work that they did to get us to this point—and indeed the entire union movement today and in the past.

There is nothing to worry about in this legislation. If you're a good employer, this is good news. It means you're not going to be dragged down by the people who want to undercut you. This is a chance for employers, good employers, to come to the table with hard-working people and nut out an agreement, and to make sure that the freeloaders in your industry don't get away with it anymore. This is a day for employers to celebrate just as much as it's a day for employees to celebrate. There's nothing to worry about here. We get asked all the time by the Opposition, "What are you doing to make us more like Australia?" Hello, we're doing it today—vote for it!

This is commonplace in the world. It's about basic rights. It's about understanding that when people go to work, they deserve a fair day's pay. So I am so proud to stand here as the final speaker on this bill. This is the result of hard work over more than a decade of people in the union movement. But more than that, it is an example of rolling back those terrible ideas of 30 years ago. I stood here and did a Budget in 2021 where we restored main benefits to the levels that they were before the "mother of all Budgets". Today, we take another important step in rolling back that agenda. But more important, even than that, is that we roll forward now to an era where people get a chance to bargain together, get a chance to get a fair day's pay. This is a great day for the working people of New Zealand. I am so proud to be part of a Government that is passing the Fair Pay Agreements Bill.

A party vote was called for on the question, That the Fair Pay Agreements Bill be now read a third time.

Ayes 76

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

Waiata

Hon JENNY SALESA: It is time for the dinner break. We shall see you here at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.