Protesters outside Parliament after the Government’s pay equity announcement.
This is a transcript of the Premium Politics newsletter. To sign up, click here, select ‘Inside Politics with Audrey Young’ and save your preferences.
Welcome to Inside Politics. The new law making it harder to win pay equity settlements is likely to damage not just the claims of some of the lowest-paid women in New Zealand, but the Government itself.
It is an emblematic bill. The sheer unfairness in making it much harder for women to show they have been unfairly treated in their pay will have a lasting impact, particularly on National.
National had a proud history in negotiating the first pay equity settlement in 2017 with E tū and Kristine Bartlett’s care and support workers, a recognition that work seen as “women’s work” is inherently undervalued. Pay equity allows pay comparisons to be made with males in different jobs but with similar levels of skills, training, responsibilities, stress levels, etc. That is how the responsibilities of a rest home worker might, for example, be compared to the responsibilities of a Corrections officer.
The care and support deal expired in 2022 and most workers are back to the minimum wage. It was one of Labour’s great failures not to have dealt with it in Government. The unions lodged a new claim and, with no progress made, last year applied to the courts. The law passed last night cancels that claim and, under a 10-year rule, it cannot lodge a new one until 2027. Most of the other 32 claims in the pipeline can be restarted, but under tougher criteria.
The threshold for starting talks is higher, comparisons with male workers are stricter, review clauses will be banned and the incentive for a negotiated settlement will be reduced because the courts will be banned from ordering backpay.
The Opposition has been on fire in the past two days, demanding answers about what warranted the coalition’s ambush to cut future pay equity settlements while giving tax breaks to landlords – or, as one put it, “robbing Paula to pay Paul”. The answers have been less than robust.
But Finance Minister Nicola Willis yesterday confirmed what Act leader David Seymour had already said – that the new law will cut billions from projected costs of settlements and will improve the Budget, or, as he put it, “save the Budget”.
The Government sets out in the Budget how much has been booked over four years for unallocated operating contingencies to take account of upcoming general pay claims in the public sector and pay equity settlements. In last year’s Budget, the figure for the current year was $3.76 billion, followed by $4.46b for next year, $4.3b for the following and then $4.3b. That’s about $17b over four years. *
Willis also confirmed yesterday that the savings in the Budget would have been booked whether or not the bill had passed into law. For Budget purposes, the Cabinet policy decision was necessary, not the passage of the bill through all stages. That means there was no compelling reason not to send it to a select committee, other than to avoid a protracted debate.
Act Workplace Minister Brooke van Velden says the new law will improve the system. Straight after the election, she apparently told the Prime Minister when she was made minister that she wanted to work on changes to the pay equity system. She forgot to tell the voters. Nobody campaigned on it.
The Government clearly believes that there have been too many settlements that have paid too much. They refuse to say which settlements or how much. Winston Peters, answering on behalf of the Prime Minister, yesterday said the move was to restore the regime that had been in place before pay equity legislation was passed in 2020 because no settlements had been made since then. That is not correct. A total of 10 pay equity deals have been settled since the 2020 legislation was passed, establishing the process to be followed. Three pay equity deals were negotiated before the 2020 legislation.
Including the care and support workers, there are 33 claims in the pipeline, either sitting with employers or in the court system, which have now been extinguished.
Any of the 10 existing agreements settled that had review clauses in them to avoid the same problem the care and support workers had with eroding relativities have had those clauses nullified. The unions progressing those claims will now have to go back to square one to lodge new claims under the new rules.
But the most egregious result sits with the care and support workers. The way to address an unfair situation is not usually to exacerbate the unfairness.
Part of any debate on a bill is its title. Labour and the Greens put up a series of alternatives to the Equal Pay Amendment Bill, including:
Unequal Pay Entrenchment Bill
Equal Pay (War on Workers) Amendment Bill
Equal Pay (Do Anything Other Than Improve the Tax System) Amendment Bill
Equal Pay (War on Women) Amendment Bill
Equal Pay (Thoughts and Prayers But Your Salary Won’t Get Higher) Amendment Bill
Needlesss to say, none made it.
Respected Labour list MP and former Attorney General, Revenue Minister and Environment Minister David Parker gave his final speech in Parliament last night to a packed gallery including former Prime Ministers Helen Clark and Sir Geoffrey Palmer, Chief Justice Dame Helen Winkelmann, Treasury Secretary Iain Rennie, Labour luminaries Mike Williams, Marian Hobbs, Paul Tolich and Craig Renney, environmentalists Gary Taylor and Simon Upton, and opinion-makers Matthew Hooton, Morgan Godfery, Annette Sykes, Max Rushbrooke and Jonathan Boston.
It was a carefully crafted and dense speech with some lengthy reckons on taxation, the environment and the Treaty of Waitangi. But it would probably be better to read it in detail on the parliamentary website than to watch it. He kept his head down most of the way through it. The after-match function had to be held at the National Library because Parliament’s events venues were already booked: the Grand Hall for a music event with Troy Kingi and Georgia Lines to mark NZ Music Month; and the Banquet Hall for a Europe Day reception.
Parker will be replaced by Vanushi Walters, who was MP for Upper Harbour last term.
Justice Minister Paul Goldsmith showed some gumption at the start of Question Time yesterday. Realising that Nicola Willis wasn’t in the House yet to answer the first question about the Government ‘s fiscal intentions and objectives, he sprang to his feet: “On behalf of the Minister, the Government’s fiscal intentions are to restore fiscal discipline to this country and to meet all our objectives.”
Willis appeared in time for the supplementary question from Nancy Lu: “What is required to achieve the Government’s fiscal strategy?” Quick as a flash, Labour deputy leader Carmel Sepuloni interjected: “Showing up on time.” Welcome to Inside Politics.
“We’re actually going to turn up and act like a real country, and that’s what we’re doing” – Judith Collins on where she is taking the country on defence.
A National electorate MP has put a bill into a ballot that would ban social media for under-16s. Which MP? (Answer below.)
Goes to Leader of the House Chris Bishop for allowing way too much legislation to be passed under urgency and to Winston Peters for quoting Shakespeare to justify this week’s: “If the deed should be done, it had better be done quickly.”
Goes to Labour MPs Jan Tinetti and Camilla Belich, who came into their own this week, leading the charge against the pay equity law changes.
OPINION - pay equity reforms: The coalition Government hasn’t done basic due diligence on an urgent roll-back of pay equity laws that will affect hundreds of thousands of workers, writes Thomas Coughlan.
Pay equity reforms: The aged care worker who took the pay equity case that created the current regime says she’s “really hurting” after the Government’s move to overhaul the law.
ANALYSIS - Defence: “We’re going to turn up and act like a real country”: Defence Minister Judith Collins talks about the coalition Government’s defence strategy and $12 billion spend-up.
Parker valedictory: Long-serving Labour MP David Parker bowed out of Parliament after 23 years on Wednesday night, saying he had “given it [his] all”.
Regulatory Standards Bill: Public feedback on David Seymour’s proposed legislation outlining principles of good regulatory practice was overwhelmingly in opposition.
House rules: Te Pāti Māori’s repeated infractions in the House have raised questions about the role of tikanga in Parliamentary proceedings.
Social media bill: Act will not support a National MP’s bill banning social media for children under the age of 16.
Email controversy: Education Minister Erica Stanford says she has changed her processes after she was criticised for sending Government information to her personal email account.
Quiz answer: Catherine Wedd, the MP for Tukituki.
For more political news and views, listen to On the Tiles, the Herald‘s politics podcast.
The reforms aim to save billions of dollars and address a budget shortfall.