Law lauds Hobbits, hobbles low-paid

Rodney Hide

HIDESIGHT

More than 4000 Kiwis are employed making movies and TV shows. There are 30,000-plus cleaners and thousands more deemed by Parliament to be "vulnerable workers".

Politicians happily perform policy backflips and triple somersaults for the movie and TV business. They don’t lift a grudging finger to help cleaners, catering, laundry and hospitality staff.

Exhibit one: the Hobbit trilogy – the government put Parliament into urgency, declared all film production workers independent contractors, rebated all GST payments and gave Warner Bros tens of millions of taxpayer dollars in handouts.

Exhibit two: cleaners and others – the government sat for three years on a required statutory review, decided to leave the industry hobbled with unworkable labour law, agreed to make complex labour law even more complex and the so-called reforms don’t come into effect until the second half of 2013, another year away.

The difference in treatment is stark. And a shocking illustration of what politics is too often about.

At issue is Part 6A of the Employment Relations Act. The previous Labour government passed the law against the National party’s ferocious opposition.

The National-led government is now defending Part 6A with a series of tweaks that only make bad law worse.

Part 6A enables existing cleaners and other specified workers to transfer from the business that loses the contract to the winning one. The workers transfer with all their existing terms and conditions intact.

Part 6A's purpose is to protect “vulnerable workers”. It sounds good but it's counter-productive.

To boost wages there must be investment in equipment, new technologies and training. That investment is driven by the healthy competition that ensures a business must constantly figure out how to do better with less to remain viable.

Part 6A stifles that competition and depresses wages as a consequence.

As predicted, Part 6A has collapsed the training of cleaners and investment in physical capital. Why invest in training when you competitor could nab your workforce tomorrow?

The Ministry of Business, Innovation and Employment has reviewed Part 6A. Its report is truly woeful.

It declares that Part 6A “creates an even playing field for employers so fair employers cannot be undercut by employers who provide less favourable terms and conditions of employment”.

The triply oxymoronic ministry believes competition drives wages down. If that was true, North Korea would be wealthy and South Korea poor. The report’s garbage.

But it’s good enough for the government and cabinet has decided to tweak 6A. Outgoing business will now have to forward employee information to their competitors.

There is to be a process to “help the employers agree how to apportion liabilities for accrued service-related entitlements of employees who are transferring”.  

Employees must decide to transfer to a new employer within five working days. And, bizarrely, businesses with fewer than 20 employees will be exempt from the provisions of Part 6A if they are the incoming employer.

The government must think it okay for small-to-medium business to drive down wages but not for big business to do so. 

It doesn’t explain why all the rest of us are left out in the marketplace without the “vulnerable worker” protection to have our wages endlessly driven down by competition.

There is no policy logic to this. The tweaks serve simply to make a counter-productive dog of a policy more complex and less workable.

But politicians fall over themselves to help the movie business. Hanging out with celebrities on the red carpet is good politics. Being seen with cleaners, caterers and hospitality staff, not so much.

And so the “vulnerable workers” are politically invisible. Policy that simply sounds good will do for them.

They work away in the dead of the night to pay their tax to subsidise the movie moguls. And to make the politicians who hobble their business look good.

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11 Comments & Questions

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Hey Rodders,

You’re usually right on the mark – however this time, there’s a few little matters that need clarification.

Exhibit1 – The National government gave no hand outs what so ever. A hand-out is something that can only be given once got. NZ Inc never “had” the trilogy until the National government clarified the law on independent contractors – effectively snookering the unions ability to hold a production to ransom through legalised extortion, (but that’s another story) Along with clarifying the law, an increased tax subsidy was extended to enable NZ Inc to secure the $500Million production in the first place. Had NZ Inc not done so, Australia and their sabotaging unions would have tried even harder to secure it for themselves. Or, any of the other multiple locations all vying for the $500Million spend in their country.

The unions don’t like NOT being in a position to hold the country to ransom as they extort whoever to get their own way – so when Key/National slapped them into reality by telling them they weren’t the elected government and they would not have any say on who can and can’t immigrate or work in NZ – they got the pip and spouted their propaganda about hand outs and “laws for sale” populist rhetoric – whilst around that same time, their corrupt MP’s were selling passports for only $15K donations – and in return you’ll get an urgent, private swearing in ceremony. Hypocrisy much!

Suggesting the movie moguls received a hand out is completely dishonest with the entire truth – and you’re better than that Rodders…

Otherwise bang on again as usual!

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Hmmm. I have read your comment a few times. I still think it's a handout. Big movies get their GST back. No other business does. That's a hand out.

On top of that rebate, another $34m was kicked into the can to sweeten further the deal. That, too, is a handout.

That a handout establishes one business over other businesses doesn't make it less of a handout, does it?

I think what you are saying is that the handout was a good idea. You might be right. But it's still a handout!

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In what way does the movie studio get GST back that no other business does? They are not the end user, so not a GST payer.

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I am not sure of the technical details. But as i understand it the government writes them a check for 15 percent of all their expenditure. And then another check for their other hand out.

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Good points Rodders and this could definately be a chicken & egg situation... however, 85% of $500million has gotta be better than 100% of SFA ...because they're making the movie in Aussie, or elsewhere.

Obviously a massive win for NZ inc and on a number of levels - tourism being near the top.

If the $34m rebate was granted after the agreement had been signed, then absolutely it's a hand out of some kind, but since it was obviously a part of the overall commercial due diligence both sides undertook - the end result is it was a fantastic investment for NZ Inc and we should all be just as grateful as the Film industry is...

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I wish my export business could enjoy a few benefits like the film lot gets. I'd even accept it pro rata to the number of employees. But no we witnessed in just a little way as to how little we matter when the big Internal Affairs passport shakeup occured and guess what we are still saddled with an effective 4.5 year booklet half filled with a language no one needs and an inability to add visa pages. Even the fantastic Apec card is out of sync with the passport and that takes months to get through the application process. So John Key burbled away on Leighton Smiths 1ZB show about passports and clearly hasn't a clue at the most fundamental level of what we need. Rodney I reckon you have winner again on this matter. Our industry cant compete with the ego stroking media lot so no one gives a monkeys for us.

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I think, too, that small to medium business is working so hard it doesn't follow politics or lobby and so politicians just ignore it.

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Didnt you vote for this law when it was passed?

And your comments about Part 6A are total BS. Everyone knows the removal of this law will just lead to the slashing of wages and conditions for cleaners. Wages are too low in this country, and it is because of people like you who want to keep them that way.

And why didnt you propose a law to ban unions/bring back slavery when you were reg. reform minister in 08-11? Seeing as you hate them so much?

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Never voted for this one!!

It's competition that pushes wages up. It's the former communist countries that had the low wages even though their leaders declared them workers' paradises.

It is the competitive countries, the more capitalist ones, that have the higher wages.

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Millsy , your uneducated statements are so far off the truth you must clearly represent the SFWU as they quote the same bollocks! Part 6A has nothing to do with slashing of wages and conditions, it is all about stiffling innovation and the related productivity gains, its time you reconfigured the out of date chip in your syc and opened your mind to the new post GFC trading environment, no more protection for SFWU members who are continually instructed to go slow by their own organisers!

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Experience from all Amglo speaking countries is that as you remove legislation that protects workers rights, working conditions and salaries, their wages go down.

Experience is that competition drives wages doen not up as there is too much competion f=due to high unemployment. ....

As Churchill said - the bad employer undercuts the good employer, and the bad is undercut by the worse.

De-rgulation of mine safety seems to have been problematic for Pike River according to the Royal Commission and this will be the case here.

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