More evidence of the minimum wages scandalous inequity

The latest Employment Court ruling - that it might be illegal for people to freely undertake voluntary unpaid work in order to gain work experience and prove their capacity for work -  is yet more evidence of how unfair, discriminatory, and dehumanising New Zealand's labour laws have become, ACT Leader John Banks said today.

“The hurdles successive governments have put in the way of young people wanting to make the transition from schooling to productive work are nothing short of scandalous,” Mr Banks said.

“New Zealand has one of the highest minimum wage rates in the OECD relative to the average wage.  This hurts those with the least skills and the least job experience the most.  

“According to Statistics New Zealand's latest figures, almost 61,000 young adults aged 15-24 were looking for work but unable to find it at 31 March 2013.  Over half of these (35,000) classified themselves as Maori, Pasifika or Asian.

“We should all be free to choose to participate in unpaid voluntary work, paid work at mutually agreeable terms, self-improvement, and social leisure activities. Yet by depriving our most vulnerable would-be workers of that freedom, society is effectively forcing those who are most desperate to get work into offering their services for free for a trial period.

“Employers who accept are not the villains.  They are actually giving these young people an opportunity to make the transition to a normal adult life.

“National has gone some way to reducing the inequitable and unfair barriers the last Labour government put in the way of young people wanting to work, but the latest development and the unemployment numbers speak for themselves.

“Greater rights to freedom of contract need to be restored,” Mr Banks said.


Story here:


Cunliffe kowtows to unions at expense of NZ economy

Labour Party leadership hopeful David Cunliffe’s promise to expand Part 6A of the Employment Relations Act to all workers would be a massive change to New Zealand’s employment laws and would have an immediate and negative impact on productivity and competition in New Zealand, ACT Leader John Banks said today.

“Part 6A of the Employment Relations Act currently forces companies who win a contract to employ all of the staff of the previous contractor,” Mr Banks said. 

“Right now it only applies to a few industries deemed to have ‘vulnerable’ workers but David Cunliffe’s proposal would expand this clause to cover all workers.  

“This is bad news for freedom of contract, workers in the business that win the contract, the customers of successful businesses and competition. 

“A business cannot increase its productivity and be competitive if it is forced to take on previous staff, who may not have been performing.  The firm’s ability to perform the contract is reduced which harms their customers and puts all of their employees’ jobs at greater risk. 

“In effect this clause protects poor performing businesses and makes it harder for new businesses to enter the market.    It also hurts employees because new workers who could have been hired are not.

“Expanding this clause would see productivity reduced, incomes reduced and a reduction in the ability of the economy to generate jobs. 

“By making this promise, David Cunliffe has shown that union demands are more important to him than what is best for New Zealanders.  A Government led by him would be a very scary prospect for New Zealanders and business in particular,” Mr Banks said.



Include small franchisees in Part 6A exemption says ACT

ACT Leader John Banks today called on National to change the Employment Relations Amendment Bill to ensure small franchisees are exempt from Part 6A of the Employment Relations Act.

“Franchisees are legally and financially separate business to their franchisors – they are not joint ventures, related entities or partnerships.   They do not share in each other’s profits and they file their own GST, PAYE and tax returns,” Mr Banks said.

“ACT believes franchisees with 19 or fewer employees should be treated as small to medium enterprises for the purposes of the Part 6A exemption.

“Part 6A puts jobs and firms at risk as it forces businesses who win a new contract in the cleaning and catering industries to take on staff employed by the previous contractor.  

“How can a business be competitive and increase productivity if they are forced to take on previous staff, who may not have been performing the job well?   The firm’s ability to perform the contract is reduced, putting all the workers’ jobs at greater risk. 

“Also one worker’s gain is another worker’s loss.  Workers who could have been hired are not hired.  

“Productivity is reduced.  Incomes are reduced.  The ability of the economy to generate jobs is reduced.

“ACT wanted National to dump Part 6A altogether.  National instead decided to exempt small businesses.  Currently, franchisees fall outside of the definition of a small business. 

 “ACT does not believe it is fair to group all franchisees within a franchise together for the purposes of the Part 6A exemption.   They should be treated as independent small business owners, just the same as non-franchised businesses with 19 or fewer staff.

“To treat these businesses differently is inequitable and unfairly penalises would-be workers and franchisees while giving non-franchisees a competitive advantage.

 “This must be changed,” Mr Banks said.



Parker’s ignorance of Labour’s poor economic record remarkable

Labour’s David Parker has shown remarkable ignorance of his own Government’s poor economic record with his claim today that a current account deficit of 7% puts New Zealand’s economy in a ‘danger zone’, ACT Leader John Banks said today

“Under the last Labour Government, the current account deficit was 8.7%, 8.0%, 8.0%, and 7.9% of GDP in the years ended March 2006, 2007, 2008, and 2009 respectively.  But did we hear Labour warning of us of the ‘danger zone’ then?” Mr Banks said.

“Labour claims that it’s the policies of the National Government that has caused our economic growth to suffer.  But the reality is, it’s National’s failure to wind back Labour’s wasteful spending binges that’s the problem. 

“Labour’s policies of big government spending undermined the competiveness of exports and firms competing with imports, and turned surpluses in the balance between exports and imports into deficits. 

“But rather than see the error of their ways, Labour is doomed to repeat their mistakes. 

“Labour’s continued commitment to intrusive regulation of New Zealanders’ financial affairs, its antipathy to commercial enterprise and its love of big, wasteful and ineffectual government programmes show that it has learnt nothing from the mess the Clark-Government had made of the economy by 2008.  

“If David Parker and Labour are serious about improving competiveness, they should join with ACT in calling for less government spending and lower tax rates to give our internationally exposed industries a greater ability to compete.   Less restrictive labour market legislation and RMA reform would also help,” Mr Banks said. 





  中小企业占了新西兰企业总数的 97%,并贡献率了40%的国内生产总值。当前大部分中小企业生存艰难, 他们与供应商的议价能力微乎其微, 也没有能力应对持续上涨的运营成本。

  新西兰服务业者协会去年的一项调查显示, 48%的服务业业主和营业者付给自己的工资低于最低工资标准。如果雇主都支付不起自己最低工资,又怎能寄希望于他们付给雇员更高的工资呢?

  最低工资的上调将直接影响那些低收入群体,由于一些员工的边际贡献低于最低工资,在此情况下, 企业为了维持收益往往会减少雇佣人员。





  新西兰统计局数据显示去年第四季度青年失业率为30.9%, 这是三十多年以来青年失业率的最高记录。

  九十年代末,青年最低工资标准是成人的60%,青年失业率比20到24岁的成年人高出近六个百分点。在2012年12月, 青年失业率比成人失业率高出了百分之十八点五。




  我们也不能归咎于高利率, 它们正处在50年来最低水平。

  我们不能归咎于缺乏政府支出刺激。政府开支一直占国内生产总值的33-35%, 而十年前只有29-30%。



  合作办学将以提供更多选择的方式帮助那些不能完成学业的学生。 但是颠覆现行教育系统还有待时日。

  因为缺乏技术所以生产效率低下,进而收入水平低下,但是这并不能解释在没有最低工资标准的失业。放眼世界, 非技术工人比比皆是。


  当我还是一个年轻的求职者时,我可以对一个潜在的雇主说“我只需要一个证明我自己的机会。 我可以无偿为您工作一个月然后您再决定是否让我留任。”






  取消最低工资标准对降低青年失业率尤为重要,至少应该取消15到19岁年龄段的最低工资标准。另外,我们可以减少最低工资水平和适用范围。 行动党提出的三个月试用期的建议可以适当延长。





Increase In Minimum Wage Will Deny More New Zealanders The Dignity Of Work

National’s decision to increase the minimum wage will see more business failures and more jobs lost, ACT Leader John Banks said today.   

“At a time when National should be getting out of the way of business, it’s putting greater barriers in place,” Mr Banks said.

“Small businesses make up 97% of all enterprise within New Zealand and account for 40% of our GDP.  Most are struggling as they have little to no bargaining power with suppliers and do not have the capacity to absorb on-going cost increases.     

“A member survey by Hospitality New Zealand last year found that 48% of hospitality owner/operators paid themselves less than the minimum wage.  

“If employers can’t afford to pay themselves the minimum wage, how can they be expected to pay their employees even more?

“The minimum wage increase will impact most on those who can least afford it - low-skilled workers. It will price them out of the market, consigning them to a benefit.  

“We have seen this with the abolition of the youth minimum wage:  Statistics New Zealand released its December quarterly report which put the youth unemployment rate at 30.9 per cent - the highest rate for at least 30 years.

“Of course we would all like to see employees earn higher wages.  But arbitrarily raising the minimum wage via regulation rather than through an increase in productivity will only result in job losses,” Mr Banks said.


The Freedom To Achieve

I rise on behalf of the ACT Party and the people of Epsom to support the Statement from the Prime Minister.

Over the summer break I have been out-and-about talking to New Zealanders - taking stock. 

New Zealanders are working harder and longer for less. 

What they want is the freedom to achieve though their own effort and enterprise. 

They don’t want hand outs - most reject the entitlement society.

They back the Prime Minister.  They rate John Key.   

They don’t see Labour, the Greens and Winston First – the coalition of the Dispirited, the Deluded and the Bewildered - as an alternative Government.  

They don’t see David Shearer as a Prime Minister, even less Russel Norman as Finance Minster.

I tell them that under MMP it could happen.  They tell me to work hard to make sure it doesn’t.

I will be.

The ACT Party and the people of Epsom back John Key as Prime Minister.  But we want him to do more to resist and roll back the entitlement society. 

We want this Government to expand the freedom to achieve.

What Labour promises in hands-on-government is a government of hand outs - the sapping culture of entitlement. 

In Labour’s world to get ahead is to put your hand in the pocket of the taxpayer. 

It is not about the freedom to achieve through the enterprise of your efforts.  It’s about taking from someone else’s hard work.

Take housing.  

Young Aucklanders want to buy or build a home with a back yard.  Yet the median house price in Auckland is now almost seven times the median household income. 

Auckland is almost as unaffordable as London.

We know that housing unaffordability is complex.  However the major culprit is central and local government – the RMA, metropolitan urban limits and building regulation.

What’s the Opposition response? 

Labour promises to build government houses to fix a problem largely created by government.  No word on where the money will come from to build ten thousand houses a year.  Mr Shearer promised $300,000 dollar homes.  Now he’s backtracked and said $300,000 is just the median value.  In Auckland they will be chicken coops. 

On Sunday, Mr Shearer told the country that he is going to hold a conference this year to work out his policy.  That’s after he has announced it.  Not good enough.

Labour have shown they are not serious.  They have not uttered one word on RMA reform. 

Here is my prediction; they will vote against every major RMA reform this year that will help young New Zealanders get their first home without a government handout.

Now the Greens won’t be outdone in the auction of make-believe money. 

For them the Government will not only build the house but loan you the money to buy it.  What they won’t say is how many houses or how much it will cost.

What we do know is that you can’t have a backyard for the kids to play in and the RMA can’t be touched.

After promising make believe houses with make-believe money,  the next day the Greens attacked the dairy industry that helps New Zealand earn its way in the real world and pays the taxes they are so keen on spending. 

For them wealth is created by the printing press - not by working hard, taking risks, selling things other people want and saving.

This year we need major RMA reform. 

I have told the Government we have a one-in-twenty year chance to get it right and get it done.  

We need to be bold.   ACT will be helping.

In other areas, the Government is moving towards giving New Zealanders the freedom to achieve and away from the policies of handouts and the politics of entitlement that the Opposition are keen on. 

ACT wants National to pick up the pace.

Here are three examples.

Partnership Schools are about the freedom to achieve for talented educators, dedicated parents, and for kids who need a break.  It gives educators another option in our education system, a system that currently sees almost one in five students missing out.

We will have a Bill providing for regulatory standards around increased disclosure for Government Bills.  This will help New Zealanders better gauge whether any reduction of their freedom is justified.  

ACT’s Spending Cap will help New Zealanders better understand how much politicians spend and how good that spending is.  Politicians will have to signal their spending plans in advance.

These initiatives and others will help get government off the backs and out of the pockets of New Zealanders.  

ACT wants the Government to keep moving towards the freedom to achieve and away from the culture of entitlement that saps independence. 

We reject Mr Shearer’s hands-on government of hand outs.

We know anything is possible however humble your origins, if you simply give New Zealanders the freedom to achieve.


Speech to Industry Training Federation Labour Forum

The future is looking brighter for small business in New Zealand. 

Interest rates and inflation are at record lows. 

We are just starting to see the first positive signs of productivity growth since 2006.

New Zealand is faring a lot better than many other countries.

Recent surveys by the BNZ and ANZ have found small business owners are feeling more confident about their prospects in the year ahead. 

One significant finding from the BNZ survey was that most small firms say they lack the skills to fulfil their potential.

As Mark mentioned, skills are vital to enable our small firms to be more productive. 

When our workers and managers are more skilled, we get higher performing businesses. 

We increase the quality of our goods and services, and customers are happier. 

Our firms are also more innovative, able to meet the demands of new markets, and increase their competitiveness.

If small businesses are the engine room of our economy, skilled workers and managers are the fuel that makes that engine perform.

This morning I want to share with you:

  • what we know about small businesses in New Zealand;
  • how we can reach them and enable them to improve their skills; and
  • specific government initiatives to support skill training and development.

In New Zealand, 97 per cent of our enterprises have fewer than twenty employees – that’s 455,000 businesses. 

They employ 31 per cent of all workers in New Zealand and they generate 40 per cent of our GDP.

Small businesses create the greatest number of new jobs each year and are the source of much of our country’s innovation and creativity.

But SMEs are very disparate - they vary greatly by size, capability, and industry. 

Some industries have a very high percentage of SMEs such as retail, accommodation and food services.   Some industries have businesses able to collectively support each other, while other industries are less organised.

We know that small business owners are under huge time pressure and lack resources.  

I had a chance to look through the Ministry of Education’s recent survey of employers as part of the Industry Training Review. 

The small firms surveyed faced many barriers to training staff. 

These included the short-term impact on productivity when staff are away from the workplace, lack of information, and management systems ill-equipped to cope with hiring and mentoring apprentices.

And it’s not only the employees of small businesses who may struggle to get the training they need. 

Research shows that most of our small business owners learn on the job.

Compared with other developed countries, our management skills are “average to middling”, which is really not good enough.

We have good research to show that businesses in New Zealand with better management practices tend to perform better.  

It’s particularly the people management, financial, and marketing skills that need to improve if we want our businesses to be internationally competitive.

So, how can we reach our SME owners?  How can we make them more aware of the value of training and what is available to them?

This will always be a challenge for any government.

No one programme or service can do it for all our firms.

Of course, Industry Training Organisations have a large reach and offer local training advice and support for over 35,000 businesses. 

ITOs can be extremely valuable advisors for a small firm. 

The survey of employers found the most important thing they valued from their ITO was the time they took to listen to their needs.

I want to pick up on the point I made earlier on how time pressured our small businesses are.  

We can’t expect all firms to have the time for traditional training and development. 

So the questions I want to leave with you today are about how we best deliver our training to suit a firm’s situation. 

How can we make more use of online interactive technology?

And how can we get alongside small business owners, by supporting them with the management systems required to manage their training needs?

We need to think more about how we work within their realities.  

A way in which government is reaching out to a broad range of small businesses is through the website. 

This site has everything needed to start, manage and grow a business. 

There are links to training options for employees and employers, as well as a suite of free tools and resources. 

More applications are being added to the site all the time and I urge everyone to check it out regularly.

Small enterprise can also access local support through the Regional Business Partners network.

This nationwide network of organisations help firms work out their development needs, and offer advice or point them towards suitable training and development programmes. 

Business Mentors New Zealand also does a great job matching business owners to advisors who can apply their knowledge and experience to those enterprises.

Lifting skills is a high priority for the Government.

The Business Growth Agenda recognises that building skilled and safe workplaces is one of the key ingredients firms need to grow, become more productive and boost our economy.

The Government recently released a progress report on the 62 separate actions aimed at improving our country’s skill base. 

You have the opportunity to provide feedback, and I urge you to do so.

Getting Christchurch up and running again is another top priority for the Government, and rightly so. 

Small firms will play a crucial part in the recovery of Christchurch and Canterbury.  

A number of new initiatives include:

The $28 million Skills for Canterbury programme which will ensure we have enough skilled tradespeople for the rebuilding of Christchurch, and the Canterbury Skills and Employment Hub;  this great initiative is a business-friendly one-stop shop where employers can list vacancies and be matched up with jobseekers from Christchurch and elsewhere.

It will ensure employers can easily get the staff they need so there are no roadblocks to the rebuild.

There is much we can learn from our on-going response to the Canterbury earthquakes, and initiatives like this could be expanded to the whole country.

The Government is also working hard to break the welfare dependency cycle and improve outcomes for our families.  This includes supporting people to move off the benefit and into work, and supporting at-risk young people to stay involved in education, training or work.

Another fantastic initiative by the Government has been the introduction of the 90 day employment trial period. 

It was originally targeted at small and medium businesses to encourage them to take on new staff.  It was so successful it was extended to all firms.   

NZIER have estimated the voluntary trial periods have created up to 13,000 new jobs in small and medium businesses.

Finally, the government-funded ITO training is continuing to play a valuable role. 

I am very glad to see the achievement rate is increasing. 

More trainees are obtaining those long-term transferable skills that will benefit their enterprise and the economy.

We all have to lift our game when it comes to skills – government, employees and employers. 

We all have a common interest in encouraging and supporting our small business owners to improve their skills and those of their employees.

I would like to thank the Industry Training Federation and Chief Executive Mark Oldershaw for inviting me here today.  

Thank you for your time and I look forward to hearing some of your thoughts and ideas on how we can lift our skills in New Zealand businesses.


Re-establishment of Youth Minimum Wage A Win For ACT

Today National unveiled its ‘Starting Out Wage’ policy – a watered down re-establishment of the youth minimum wage.

For their first six months in a new job, youth aged 16 and 17 will have a minimum wage of $10.80 – which is 80 per cent of the $13.50 adult wage.  After six months on the job they return to the adult rate but the six months begins afresh with each new employer.

While the policy is not as bold as ACT would have liked, this announcement is step in the right direction and represents another win for ACT as National adopts another of our core policies. 

When Labour abolished the youth minimum wage in 2008, youth unemployment soared.  A study by the former Department of Labour found that abolishing the youth wage resulted in a loss of up to 9000 jobs.  Removing the youth minimum wage priced young people out of the market. 

The reason for this is obvious - hiring a young person is more of a risk.

Most youth have little or no experience and do not have the life skills or maturity of older workers.  Employers cannot look to their work history to ascertain whether they are reliable and suitable for the job, or how productive they will be.  If employers must choose between a young person or an older person at the same rate of pay, employers will usually choose the older, more experience worker.  

Different wages for adults and young people gives employers an incentive to employ a young person with no experience.   It gives young people the chance to get their foot on the job ladder where they can gain valuable skills and experience, eventually moving into better, higher paid jobs.

Some people will say that youth workers are just stealing jobs off older people and that we are left no better off.   However a young person who gets a job produces goods and services on the one hand and spends their money on the other.  By working they produce more for people to buy, leading to more production and the creation of new jobs. 

Making it easier to work actually increases employment. 

On the other hand keeping people at home on the dole produces nothing new for anybody to buy, and actually penalises those who are working by making them pay taxes for welfare payments.

ACT has campaigned for the re-establishment of a youth minimum wage since Labour and the Greens abolished it. 

In 2010, we introduced the Minimum Wage (Mitigating Youth Unemployment) Amendment Bill which would have reintroduced the capacity to establish differential minimum wages for those aged 16-17.   

Not one party in Parliament, aside from ACT, voted for this bill.  

Those parties instead voted to keep our youth at home on the couch, doing nothing, learning nothing and earning nothing - rather than in a job paying $10 an hour.

Labour and the Greens went so far as to argue that demand and supply is not affected by price.  They argued – and still do - that minimum wages have no impact on employment and therefore it could not be the reason for our high rate of youth unemployment.    

Yet, here we are, in 2012, and both these parties are campaigning to raise the price of cigarettes and alcohol as they say a higher price will lower demand.   That’s rich - but we digress.

Two years, and many unemployed young people, later, National’s announcement – a back-down on their previous position – is a welcome step to getting our young people into employment and moving forward in their careers. 

We just wish it hadn’t taken National so long.