Increasing New Zealand’s productivity – not bureaucracy

Fair Pay Agreements have passed into law and will come into effect on 1 December. HortNZ, product groups and other business and industry groups opposed Fair Pay Agreements, saying they were unnecessarily complicated, did not recognise regional differences, and would styme the swiftness needed to succeed in today’s rapidly changing business environment.

To be clear, our sector absolutely supports employees being paid fairly and being provided with good conditions. If we did not, there would have been an exodus of staff leaving our sector given this tight employment market. So, why the necessity for this type of legislation? 

That is still our view. We believe it would have been in everyone’s best interests – employees and employers – for the Government to have put the effort into improving productivity and reducing bureaucracy – rather than increasing bureaucracy and putting impediments that will hinder innovation in place. 

Fair Pay Agreements will set a minimum across industry or occupational groups. They will make it harder for businesses to take a chance on people who are new to the workforce or are re-entering the workforce after a break. They will affect opportunities for businesses to reward and keep their best people.

Fair Pay Agreements will take some time to negotiate – indeed, the Government has said it only expects three or four to be negotiated in a year. Plus, what is agreed will be in place for at least three years, which is a long time in today’s world.

Wouldn’t it have been better to reduce the barriers to doing business in New Zealand and being innovative, so that our economy might grow and our country improve its competitive edge? In the race to attract and retain the type of employees needed to spearhead growth, wages would have continued to increase and conditions would continue to be tailored to meet the needs of different employees.

Under a Fair Pay Agreement, the employer-employee relationship changes from a relationship of maximums to one of minimums. This change is not what we need in this country to boost productivity and, with more money in the economy, increase wages and enhance conditions in a sustainable manner. This is why National and ACT have independently said they will repeal the legislation if elected as the Government in the General Election next year. 

Too soon to tell

It is too soon to be able to tell quite how Fair Pay Agreements will affect the horticulture industry or occupations within the industry. We are in discussions with the Government and other groups like ours. Our promise to you is that as soon as we have more clarity and detail, we will provide it. 

That clarity and detail will take time and, as the Government itself has said, only three to four Fair Pay Agreements are expected to be negotiated a year, particularly as it will take time for unions as well as business bodies to organise themselves. 

In the meantime, our advice to growers is to focus on the coming season, doing all you can to attract and retain employees. The various seasonal worker attraction campaigns are nearing full swing and current reports from the summerfruit sector are positive. Backpackers are starting to return to the country, and we are working with the Government to ensure that as many Recognised Seasonal Employer (RSE) employees come to New Zealand for the coming harvest as possible. While we know there will still be a worker shortage, we are hopeful that the collaboration that you undertook last year – working together and sharing resources – will also assist you this coming season. 

While similar weather patterns to the last two seasons are predicted, many growers have invested in measures to reduce the damage of bad weather, even though this is another cost to growers. The focus of our sector is as always to increase productivity, which takes me back to where I started with this column. 

At the risk of repeating myself, it would be far better if the Government took more time to understand the realities of doing business and growing in New Zealand, and put in place measures to support industries to grow the economy and wages – rather than increase bureaucracy and unnecessary cost, and stifle innovation.