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Employment Laws Must Go Forward, Not Back

Wednesday 17th Nov 1999
Richard Prebble
Media Release -- Economy

Hon Richard Prebble speech to launch ACT's Employment Policy Kings Wharf Cold Store, 2.00pm Wednesday November 17 1999

ACT has chosen to launch our employment policy here in Wellington Central, at the Kings Wharf Cold Store because this is an excellent employment and business opportunity for this city.

It is the type of business development that ACT says we must support through common-sense, forward looking employment laws.

In fact, in today's Dominion the Kings Wharf Cool Store is advertising for staff. We haven't had a cold store at Wellington's port for nearly 20 years because there hasn't been enough trade to warrant it. It took Wellington entrepreneurs to get this project up and running. But they don't want to go back in time. They don't want Jim Anderton as an uninvited partner in their business. They don't want Helen Clark-imposed industrial relations.

The Port of Wellington, under our new flexible industrial relations regime, is working with the private sector to bring new business to the port with no risk to taxpayers' or ratepayers' money. The Port of Wellington or Centreport as it's now known should be congratulated. They have shown what the private sector can do if the government just gets out of their way

I was the architect of the port reforms. When I became Minister of Transport, the most efficient New Zealand port was less efficient than the least efficient Australian port. After the reforms, New Zealand's least efficient port had become more efficient than the most efficient Australian port.

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As New Zealanders we need to be reminded of why we shouldn't go back to trade union dominated ports as Labour and the Alliance's policies would have us do. 82.3% of workers have chosen not to join a union. Why should they be forced to pay an average of $500 a year for union membership?

If the left get into power we will face: de facto compulsory unionism, union monopoly on industrial relations, unions having the ability to call sector-wide strikes.

In 1980 this and other ports regularly went on strike. In 1990, 330,923 days were lost through strikes, the highest proportion in the OECD. Compare that to last year when 11,778 days were lost. The lowest since 1934.

ACT's employment policy is based around the fact that it's the private sector not the state that creates jobs. The state's role is to make it easier for a New Zealand citizen to offer a fellow citizen a job. Since the introduction of the Employment Contracts Act over 270,000 new jobs have been created and 66% of these jobs are full time.

If you analyse the policies of the parties of the left they are based around the mistaken belief that it's the state that creates jobs and it's government's role to make it difficult, complex and expensive to offer your fellow citizens a job.

It's ACT's belief, which in this electorate I can substantiate through surveys and my close links with the small business community, that there is no shortage of potential jobs.

Wellington is leading the way in job creation. Wellington has the lowest unemployment of any city in New Zealand. It is vital that the labour market remains flexible. New Zealand is thankfully long past the days of just being open for business from nine to five Monday to Friday.

What the left doesn't understand is that New Zealand is a nation of small businesses. This cold store, which is going to employ around 20 to 30 people, is by New Zealand standards a big business. Some 49,600 net new small businesses are working in our economy. 90% of enterprises in New Zealand employ less than five people. For a company that size, a wrongful dismissal grievance claim which on average settles for $6,000 with a $4,000 legal fee, is a crippling burden.

Small businesses that have been hit by such claims become cautious about employing others. Other employers are just too scared to take the risk. ACT's proposal to have a probationary employment period of six months before either the employer or employee can sue will encourage many firms to take on new staff.

ACT's proposal of a six month probationary period is very fair- in Britain under Tony Blair's government the probationary period is 12 months.

The latest figures show that in the last 12 months there were, on average, 400 employment issues per month filed with the Employment Tribunal. A total of 4,782 for the year. An Employment Relations Consultant in Auckland estimates that 75 to 80% of the issues filed are personal grievances.

There are huge numbers of medium sized business in New Zealand that have been stung by this. There are well established cases of individuals who have brought up to four cases of wrongful dismissal against their employers. Despite this abuse and despite the fact that National has promised action on the matter for more than five years, it continues.

This cold store also raises another real issue for employers. This cold store needs to work alongside the port that works seven days a week 365 days of the year. This means that the cold store is caught up in the absurdity of the outdated Holidays Act.

A recent survey showed that a majority of employers and their workers have been ignoring the absurdities of the Holidays Act. That is, of course, a totally unsatisfactory situation.

Employers have been asking for government to clarify the Holidays Act and for more than five years the Government has been promising change. ACT is committed to bringing the Holidays Act up to date to provide choice and certainty for employers and employees.

Wellington as a city would never have been able to boom the way it has in tourism, or in attracting the world's film and television makers, or be able to have a revival of the port, without the Employment Contracts Act. Let's not go back to collective contracts, compulsory unionism, strikes and industrial conflict.

Let's build on what we have with positive change to create more flexible industrial relations so we can create more growth and more jobs like the ones we are celebrating today. These positive changes together with ACT's proposal to cut unnecessary red tape and bureaucracy and our low tax policy will see 80,000 real new jobs created over the next three years. It's a positive change worth voting for.


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

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