Prime Minister says fair pay agreement development 'has left a bit of a vacuum'

Tuesday, 28 August 2018

Prime Minister Jacinda Ardern (centre) with Air New Zealand chief executive Christopher Luxon and Finance Minister Grant Robertson, following a speech in Auckland which marked a charm offensive aimed at addressing business confidence. The mood of boardrooms is currently highly pessimistic, which some take as a sign of a slowdown while others claim should be dismissed as a poll by executives of the Labour-led Government.

Prime Minister Jacinda Ardern has sought to ease concerns about a new type of collective bargaining, saying there will be 'no more than one or two' fair pay agreements in the current electoral term.

A campaign promise by Labour, fair pay agreements are designed to set standards above legal minimums across industries or sectors. The agreements are already used in Australia but could represent the largest change to industrial relations of Ardern's Government.

The agreements have been the subject of debate since before the election, mainly focused on the lack of detail around how the agreements might work or who would be affected.

Treasury urged Workplace Relations Minister Iain Lees-Galloway not to send the issue to a working group until more work was done, saying the group was effectively being asked to design the agreements.

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National leader Simon Bridges said the statements on fair pay agreements were an 'acknowledgement of failure'.

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Lees-Galloway rejected the advice. While he maintains the move was deliberate and it would mean better policy would be created, the move has left the Government unable to say how the agreements will work.

In her much anticipated speech on business confidence in Auckland on Tuesday, Ardern said she understood why there had been discussion about the agreements and acknowledged the Government's approach had contributed to the uncertainty.

The agreements were meant to be a tool to address areas where there is entrenched low wages and low wage growth, Ardern said, but would not 'fundamentally' disrupt employment relations landscape and would not be accompanied by the ability to take strike action.

'But I can say all of that – and the truth is of course, that going slowly on their design to make sure we get it right, has left a bit of a vacuum. I acknowledge that. And I want to do something about it,' Ardern said.

'That's why I am confirming today that there will be no more than one or two fair pay agreements concluded during this term. They will be in industries and sectors that have low pay and in which the workers are vulnerable and regularly exploited.

'The vast bulk of you in this room will remain unaffected by these agreements, but you will have a chance to see how they work, the benefits that they bring, and I hope, that some of the speculation around them is unfounded.'

Still boiling the frog, only slower

National leader Simon Bridges said the Prime Minister had made an 'acknowledgement of failure' on fair pay agreements, but was not solving the problem.

'I would argue, this is them saying 'yep, this is scaring the horses, sp we will boil this frog slower so that it doesn't jump out of the pot. They're still boiling the frog, right?,' Bridges said.

'They're still going to do, substantively, what scares people, which is have fair pay agreements, cross sector, they're just going to do it more slowly.'