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Speech To The NZ Contractors' Federation

Speech To The New Zealand Contractors’ Federation Annual Conference

Richard Prebble Speech -- Economy

I appreciate the opportunity to speak to the construction industry. I have been a director of a civil engineering firm for over a decade. I thought politics was risky. I am full of admiration for the way the construction industry is willing to tender to build at 4%margin a 14 storey building, a kilometre long bridge, a 300 metre long wharf, or a ten kilometre highway.

The company I am with has operated in seven countries and bid against the world’s most famous construction companies.

When we are able to bid on the famous level playing field and not against the deep pockets of foreign governments treasuries, we usually win.

The New Zealand construction industry is equal to any in the world. The industry has literally built this country. The construction industry is one of our competitive advantages.

The barriers the industry faces, the cost and time penalties come not from the construction industry, but from the actions of central and local government.

The costs come from a raft of feel good legislation ranging from the Resource Management Act, health and safety legislation, to the demands of departments, like Statistics.

Each one of these laws brings with it compliance costs that are passed on to the public. So much so that the average new home in New Zealand is up to 13% more expensive than the same home built in Queensland.

The media reports this week that the average house is less affordable than in the past. They mention some reasons but fail to state the most significant. Every time the government passes another bit of feel-good legislation that affects the construction industry, they make it harder for their supporters to own their own home!

The Labour/Alliance government is busy increasing compliance costs.

The increase in income tax is a compliance cost.

The re-nationalisation of ACC has increased costs. Despite Michael Cullen’s pledge that ACC premiums would fall, industry after industry is being advised of premium increases and is observing falling service standards.

The government advises they have plans for further increases in the minimum wage and a new health and safety Act.

Next week we begin debating the Employment Relations Bill.

The Bill represents significant compliance costs for business.

The first is the challenge of getting to understand this complex new law. The latest version is over 250 pages long! There are heavy penalties for making mistakes. New labour inspectors, 'industrial parking wardens' with rights of entry and the power to issue instant fines start work on 2 October.

Industry must pay for stop work meetings, paid leave for trade union education, even pay for leave for workers to negotiate a pay rise, supply trade union recruiting material and pay to collect the trade union membership fees.

A provision that will prove very expensive and difficult to comply with is a provision that every employer must provide every employee in plain English with a description of services available to resolve disputes. In plain English that means advice on how to take the boss for a personal grievance.

Bogus personal grievance cases are already at scandalous levels. Over 5,000 such cases last year, nearly 14 a day.

The Employment Relations Bill is a charter to take firms for a personal grievance.

Cases can be brought for every ground in the Human Rights Act and up to three years later. Through what I hope is a drafting error (and I hope it will be corrected next week) it appears that some personal grievance cases can be brought up to 9 years later.

The boss is deemed guilty until the firm proves otherwise.

How can you defend yourself from a charge that an employee was subjected to discrimination from a fellow employee three years ago, let alone nine years ago?

In most cases you can’t.

For small firms the growth in personal grievance cases will be a nightmare.

For the construction industry the return of militant unionism and the strike weapon is a reality.

There are a number of provisions that alter the balance in industrial relations in favour of trade unions.

First, only unions can negotiate a collective agreement.

Second, clauses like Clause 65 make it mandatory to negotiate issues like contracting out. In effect, the unions can force employers to make concessions on issues such as redundancy.

Third – strikes against a whole industrial sector are now legalised.

Fourth: there is a legal ban on ordering employees to do the work of striking workers or to hire employees to do the work. There is no matching ban on striking workers from taking other employment during a strike.

This measure making strike-breaking illegal has no parallel in New Zealand’s history and comparable countries have no such law.

It makes the strike a lethal industrial weapon.

On a construction site, a strike by a key worker like a crane driver, could paralyse a site.

A strike at the country’s concrete yards could paralyse the whole industry.

As this industry will know, old militants like Ray Bianchi, are back organising.

The new Bill produced a record amount of submissions. More than 400 oral submissions have been heard, over 2000 substantive submissions (most against), 18,000 form submissions and a petition of 57,000 signatures against the Bill. The Employment Contracts Act received just 440 submissions.

What surprised me was despite submissions organised by the trade union movement, the committee heard very few cases of genuine exploitation by employers.

After all the government propaganda, and considering there are over 250,000 employers in the country, and considering human nature, I expected to listen to dozens of harrowing cases.

The trade union movement had to dredge up cases five years old about companies that have gone out of existence.

We heard from well-paid Telecom workers who proudly told us how they have staunchly held on to their perks of double time and special payments.

They did not impress as examples of exploited workers.

The government made much of some cleaners – employed cleaning the government’s own hospitals who have had a number of employers as companies have lost contracts.

Virtually all have not lost a days pay. Upsetting yes, but exploited – hardly!

Indeed the evidence was overwhelming that the Employment Contracts Act has been a great success for both employers and employees.

The coalition is fixing something that is not broken.

So where does this destructive Bill come from?

It is pay back to the trade unions. The union movement gave millions to support Labour. Most did not have to be declared. Unions like the Engineers had organisers working fulltime for Labour for months.

Why? The union movement today only covers 20% of the work force. A union like the Engineers stands to earn millions of dollars from the Bill – some they will kick back to Labour in affiliation fees.

The second reason for the Bill is ideological. Margaret Wilson is a dedicated socialist. She and the academics who wrote the Bill really believe that business exploits workers.

None of them have ever employed a fellow New Zealanders with their own money. They have never appeared in front of an Employment Tribunal. They know little of the realities of business.

This law is written for big business.

Most New Zealanders work for small businesses employing less than ten people. These Mum and Dad companies cannot afford expensive professional advice.

They cannot afford $10,000 personal grievance cases.

The Bill is anti business. It will discourage employment. The Bill will widen the gaps.

The Bill is a threat to your business.

The coalition Ministers have launched a number of personal attacks on ACT.

The Chairman of the Select Committee, Graham Kelly, Labour MP for Mana, tried to stop me from telling the public about the Employment Relations Bill by threatening me with Parliamentary privilege.

He has ignored the fact that Ministers like Clark, Cullen and Wilson have been issuing press statements for a month claiming that amendments to the Bill would show government was listening.

When I stood up to the government and told the public what was really in the Bill – the Labour Party tried to silence the news media with privilege.

If the Bill is as good as the coalition says, why did they want to keep its provisions a secret?

Why this secrecy in a democracy?

Helen Clark has gone so far as to claim that ACT’s opposition is “undemocratic”. Now she wants to control the opposition.

She is trying to claim an electoral mandate. Labour has no mandate for the extreme measures in the Employment Relations Bill.

On the leader’s debate during the election, she claimed there would no return to compulsory trade unionism. New employees must be hired on a union collective. To be on a union collective agreement you must join the union. It’s de facto compulsory trade unionism.

Michael Cullen on panel discussions in front of business audiences said, and I quote “All Labour intends doing is a few technical amendments to the Employment Contracts Act”!

The government has no credibility.

Yesterday Margaret Wilson issued a press statement claiming that ACT’s statements contain 23 errors about the Employment Relations Bill.

ACT’s statement about the Bill was checked by officials. Every MP on the Select Committee went through our minority report and agreed it was factually correct.

It’s the Labour Ministers who have the Beehive's 'Channel 9', the misinformation channel.

Let me complete my remarks with some observations of a different vision.

Let’s acknowledge that there were problems with the Employment Contracts Act.

The Holidays Act has been a mess. National in two elections promised a new holidays law and never delivered.

The Employment Court is out of control. A half million dollar award for stress is bizarre. Again, National promised reform but did nothing.

The Employment Tribunal delays are not acceptable. Again, action was promised and not delivered.

ACT says the Employment Relations Bill must go, but let’s take the chance to improve the employment law, to make it fair and more flexible. We need a law that encourages investment, growth and jobs.

Let me predict that the militant unionists cannot resist the temptation to flex their industrial muscle – this Labour/Alliance coalition’s popularity will evaporate.

National intends to campaign on a return to the Employment Contract Act.

ACT intends to campaign on a policy of a fresh new approach.

Let’s return to the best of the Employment Contracts Act, with a more flexible approach.

Let’s get rid of the bogus grievance cases.

Why not have the vision of having the best employment law we can achieve.

If this is the outcome of this disastrous experiment in socialist industrial dogma, then perhaps it is a silver lining in the dark cloud of the Employment Relations Bill.

For more information visit ACT online at or contact the ACT Parliamentary Office at

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