18 November 2004

Hon Mark Burton Speech

Speech to Amalgamated Workers Union Federation Conference

Speech to Amalgamated Workers Union Federation Conference 18 November 2004 Taupo Cosmopolitan Club

Thank you for the opportunity to address your conference this year, and thank you for accommodating the changed time. As you know, Parliament has been sitting under urgency.

Unions have had social and political life in New Zealand for almost a century. A government that ignores the importance of the Union contribution and including Unions in policy is short-sighed at best.

But even more important is the vision that this government shares with Unions: just and safe workplaces and fair outcomes for every New Zealand worker.

Clearly, working in partnership is infinitely better than the legacy of division and confrontation left to us when we took office in 1999.

This government believes economic and social progress flows from investment in skills, in strong public services, in provision for secure superannuation, and a strong public health system—all investments that will ensure a real and tangible stake in the future for all New Zealanders.

That’s what we have been working for—the results speak for themselves.

ERA

In 1999, the Labour-led government was elected on a platform of reform of the Employment Contracts Act.

In short, we wanted to restore balance to employment relationships, and to build a confidence between workers and employers that had been destroyed during the 1990s.

It was a vote of faith that we would reverse the damage of the National Government that eroded trust, and trampled on workers.

Of course, the National Party opposed the original Employment Relations Act in 2000 and are today strongly opposing the Employment Relations Law Reform Bill.

According to them, the ERA and the subsequent amendments puts too much power in the hands of unions and employees.

They are, quite simply, wrong.

In 2000, they said that if the Employment Relations Bill was passed, it would lead to:

An increase in unemployment, A reduction in economic growth, An increase in the rate of strikes in workplaces A dramatic fall in business confidence

They have been proved wrong on every count.

What has happened since 2000?

We are at an 18-year low in unemployment. At 3.8 per cent, New Zealand sits at second lowest in the OECD, and well below the OECD average of 6.9 per cent. We have 236,000 more people in jobs. We have a declining number of work stoppages. And the World Bank’s Doing Business in 2005 survey ranked New Zealand as number one out of 145 countries for ease of doing business. We have delivered on decent jobs, and we are determined to do even more.

In our 2002 Policy Manifesto, we outlined our commitment to reviewing the ERA. We wanted to ensure protection of employment conditions and continuity of employment in the event of the sale of a business, transfer of undertakings, or contracting out.

As you will be aware, a Bill amending the Employment Relations Act has just been reported back to the House.

It contains a range of fine tuning provisions, which will add further strength to what is already a very effective piece of legislation.

The purpose of this Bill is to better meet key objectives of promoting fair, productive, and effective employment relationships between employers, unions, and employees.

The key amendments made in this Employment Relations Law Reform Bill are about:

Fair employment law, Resolving disputes without lawyers if possible, Giving employees a genuine choice between individual and collective employment agreements, and Creating more certainty for employees when a business is sold or their work is contracted out.

This Bill represents a good balance of practical, realistic measures that will strengthen the Employment Relations Act and further promote positive employment relationships.

The Bill clarifies that good faith is a broader concept than the common law obligations of mutual trust and confidence.

Addressing the inherent inequality of power in employment relationships goes beyond focusing on bargaining power alone.

It confirms good faith applies to individual bargaining situations, and that there must be genuine negotiations over individual employment agreements.

Stronger incentives for parties to act in good faith are provided by the introduction of penalties for serious and sustained breaches of good faith.

The Bill also directly addresses the issue of "free riding" - the practice of employers automatically passing on collectively bargained terms and conditions to employees employed on individual agreements.

This year, to enhance this Bill, we passed two laws—the Insolvency Amendment Act and the Companies Amendment Act.

We're protecting employees' redundancy payments and wages with a 250 per cent increase in maximum payments, from $6,000 to $15,000. This includes, for the first time ever, redundancy pay.

Another important part of the Bill deals with the Transfer of Undertakings

These changes give employees the right to choose to transfer to the new employer on their current terms and conditions of employment.

Other employees will also be given protection through a requirement for their employment agreements to contain an “employee protection provision”.

These provisions will describe what steps the employer will take to protect employees affected by a sale, transfer or initial contracting out of business.

We have in my view, more than repaired the damage done by our predecessors. And, in their oh-so-predictable and mean-spirited way, they continue to oppose any moves to provide fair employment conditions for New Zealander workers.

Minimum Wage and Holidays Act

This government has increased the minimum wage 5 times in the last 5 years—from $7 per hour in 1999 to $9 per hour today. What a change from the 1990s, when the minimum wage stayed the same for years at a time!

The youth wage has gone up from $4.20 in 1999 to $7.20 an hour now. And, despite the predictions of the ever-predictable opposition, there has been no corresponding drop in youth employment.

In December 2003 we passed the Holiday Act, which came into effect in April this year.

Sick leave and bereavement leave were separated out. The new Holidays Act gives everyone three days to mourn for someone within their immediate family and a single day to mourn someone close to them—hardly excessive.

Four weeks holiday comes in from 2007, improving the quality of life for all New Zealand workers, and restoring equity with many of the high-level employees who already generally enjoy better holiday entitlements.

Four weeks annual leave and better holiday provisions are also important if we are to compete internationally in attracting and retaining skilled people. This initiative will put New Zealand on par with Australia (four weeks for 30 years) and the United Kingdom (four weeks since 1999).

Of course, Dr Brash and his lot plan to overturn the Holidays Act. I wonder how many weeks leave he gets?

Paid Parental Leave

For parents, we recently announced an increase in weekly payments for paid parental leave from $334.75 to $346.63 per week.

The scheme is to be extended further so that eligible parents will get 13 weeks of paid parental leave from 1 December 2004, and 14 weeks from 1 December 2005.

Parents will also be able to take paid parental leave if they've been in the same job for at least 6 months, rather than a year.

The big picture: families, health, and retirement

Along with employment, this government is of course looking at the bigger picture: education, good health, and strong communities.

Rather than offering tax cuts for the rich and cutting public services—the National/Act agenda—government is delivering to low and middle-income families with children, through our Working for Families package.

When fully implemented, this budget package will deliver an average increase of around $100 a week in direct income assistance to families in the $25,000 to $45,000 band.

By 2007 an estimated 61 per cent of all families with dependent children will benefit from the cumulative increases to Family Income Assistance, gaining an average $66 net a week.

In addition, around 28,000 families and 33,000 children will benefit from increases to childcare assistance, with average gains of $23 a week per child from 2005, and some 95,000 households will receive increases averaging $19 a week to their Accommodation Supplement in 2005-06.

Working for Families represents the biggest offensive in the war against child poverty in decades.

Primary Health Organisations

Health has been another priority.

There are now 77 Primary Health Organisations (or PHOs) around the country, with an enrolment of over 3.7 million people.

Today, we have lower fees for children under 18 and for people aged 65 and over, who were previously not eligible for lower-cost care through the Community Services Card or High Use Health Card.

These age groups are also able to get fully subsidised prescriptions for no more than $3 an item.

Superannuation

And, in looking to the future security of older New Zealanders, we set up the New Zealand Superannuation Fund, to ensure that super remains viable into the future from age 65, at 65 per cent of the average wage for a married couple.

An ageing population means the cost of superannuation will double over the next 50 years.

To ensure that older New Zealanders will have an acceptable standard of living, government is allocating around 2 per cent of annual GDP (around $2 billion a year in current terms) to the Super Fund over the next 20 years.

The fund is expected to reach $38 billion in 10 years and $101 billion in 20 years.

The fund has been set up now to secure superannuation for all into the future. There is absolutely no reason, for the foreseeable future, to change the age of eligibility.

(Unless, of course, one abolishes the Super Fund to pay for tax cuts for the rich…)

Investing in employment

With our strong economy and record low unemployment, New Zealand is today facing an unprecedented demand for workplace skills. Government continues to work closely with a wide range of industries to address skill requirements.

We are addressing this issue on a number of fronts.

First and foremost, we are focusing on getting all working age New Zealanders into jobs. With unemployment at an 18-year low of 3.8 per cent, clearly our efforts are paying off.

We have also made great strides in industry training. The central North Island region has over 9300 employees in industry training and 694 in Modern Apprenticeships—a significant increase on numbers of 8,800 and 582 at the same time last year.

In my Taupo electorate, there are 3,277 Industry Trainees and 182 Modern Apprentices.

Government’s new $5 million Skills Package will see an extra 5,000 people in industry training nationwide, with apprentice numbers in our region increasing to around 800 and industry trainees to close to 10,000.

This investment carries two important messages. First—we’re listening and responding to concerns about skill shortages. Second—trade careers are valuable, both to individuals and the New Zealand economy as a whole. Trade skills from across the spectrum are as important to the “knowledge society” as scientists and artists.

In my role as Tourism Minister, I recently had the pleasure of speaking at the graduation of the second group of tourism apprentices to achieve tourism training qualifications—part of a new chapter in the industry’s history.

Held in Rotorua, this ceremony also saw the graduation of our first Maori tourism apprentice—another milestone, and a key step towards realising the vast potential of our cultural heritage.

Economic Growth and Business confidence

Now, turning to economic growth and business confidence: Once again, this Labour-led government is proving its critics wrong.

Better working conditions and fairness in the workplace are not the opposite of high productivity and good returns. In fact, work stoppages have declined for the third year in a row.

The Department of Labour's new mediation service has seen disputes resolved more quickly in less legalistic forums. The free service has been recognised by employers and workers alike as a practical mechanism for resolving workplace disputes. Over the past two years, when mediation has taken place, around 77 per cent of problems are settled there.

As I mentioned before, the World Bank’s Doing Business in 2005 ranks 145 countries on ease of doing business. New Zealand placed number one, followed by the United States, Singapore, Hong Kong (China), and Australia.

In contrast to some of our political opponents’ pitiful attempts to argue the opposite, New Zealand is actually on top, in terms of how regulation impacts upon business.

More good news about jobs

Our term in office to date has been rich in job growth. The number of people in work has risen considerably in the last five years.

Since the government came to office 236,000 more people—that’s almost ¼ million—are in work.

This quarter has seen yet another drop in unemployment, to (yes, I’ve said it before—but it bears repeating!) an 18-year low of 3.8 per cent. 19,000 more people became employed this quarter—16,000 of whom are women.

Labour force participation increased to 67 per cent of the working age population—the highest since the Household Labor Force Survey began in March 1986.

Our unemployment rate is the second lowest in the OECD (behind Korea on 3.5 per cent), and significantly lower than our major trading partners Japan, the United Kingdom, Australia, and the United States.

The statistics also confirm that employment gains are being shared around, with strong growth in the regional economies and with Maori and Pacific people’s unemployment dropping again this quarter.

Conclusion

We have come a long way in only five years. Our economy is strong, job opportunities abound across New Zealand, our international profile is high, and our faith and pride in ourselves has been restored.

But we cannot afford to rest on our laurels—we still have a long way to go if we are going to cement these gains into a sustainable future for New Zealand.

This is a government that will keep on working – working for the economy by supporting ongoing growth, working for families by sustaining and improving the strong public services that they need and deserve, and working for New Zealand workers by creating an environment where they have clearly established rights to bargain over pay and conditions.

While the opposition whine and scaremonger, this government is getting on with the job of working with New Zealanders to improve the day-to-day lives of all our people.

While they talk doom and gloom, we are distributing wealth more widely by expanding job opportunities and maintaining the value of benefits and pensions.

And while they whinge about “some groups being better off than others”, we’re increasing our investment in social services like health care, housing, and education, bringing benefits to all of New Zealand.

What do they want? They want your holidays, they want your superannuation, and they certainly want your hard-fought wages and conditions, health and safety clauses, and your time and a half on statutory holidays.

They want to go back to the failed policies of the past—to the days where the social dividend was not shared.

We inherited an electorate that was fragmented and disenfranchised. From it, we are working with Kiwis and building a country where everyone has a stake and everyone is valued.

Labour is looking forward—working with New Zealanders—determined to build a real future for all New Zealanders.

ENDS

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