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PoliticsOctober 12, 2022

What is the minimum wage exemption and why is it so contentious?

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There are currently hundreds of New Zealanders being paid as little as $2 an hour to work. How is that legal? Josh McKenzie-Brown reports for Attitude.

The Minimum Wage Act 1983

Right now in New Zealand there are men and women earning less than $3 per hour. Legally. Under the Minimum Wage Act 1983 (MWA) businesses can apply for an exemption to pay an employee with a disability less than the minimum wage, on the basis they are less productive. 

Even our national airline, Air New Zealand, hires workers at this rate. To untangle headphones. 

Our current Labour government is fundamentally opposed to this, but nothing’s changed during its term. The reality is that the MWA is not a black and white issue as one may believe looking in from the outside. Most employees and their families under this scheme don’t want it to change. Employment provides them with purpose, increased mental wellbeing, builds independence and facilitates socialisation with people other than caregivers or parents. 

According to the Ministry of Business Innovation and Employment (MBIE), 975 minimum wage exemptions are currently issued for businesses that employ disabled people.

The employers

Altus Enterprises is as much a charity as it is a business, says CEO Martin Wylie in the latest episode of Alice Snedden’s Bad News. He said the nonprofit organisation, which provides employment opportunities for people with disabilities who would otherwise be at home, wouldn’t operate at all without the minimum wage exemption. Hundreds of people with high level intellectual disability would then have no purpose.

An investigation by the NZ Herald in 2019 found that Air NZ were paying $2.30 an hour to disabled employees to untangle headphones. The woman interviewed worked at Altus, with Air NZ as one of its clients. 

All of Altus Enterprises’ clients are following the law as it currently stands. It’s not known how many people with disabilities are in illegal employment situations. 

The employees

Several Altus employees (who cannot be identified due to privacy concerns) spoke to Attitude. All maintained that they enjoyed the work and would continue to attend even if they weren’t being paid. 

The politics

The minimum wage exemption is hotly debated in parliament and parties have different views on the matter.

Labour – Committed to replacing the status quo with a fairer alternative at the start of its current term but has so far made no changes. Former minister for disability issues Carmel Sepuloni called the Minimum Wage Act exemption “discriminatory”. 

National –National will maintain the minimum wage exemption for firms hiring disabled workers if elected”, said social development spokeswoman Louise Upston in 2020. The party didn’t respond to Attitude’s request for comment.

Act – Party leader David Seymour says “Act does not support minimum wages of any kind. Employers may want to give someone a job but can’t afford to pay full minimum wage, so simply won’t do so. This affects people with disabilities acutely.

For some, the realistic alternative is not being paid a higher wage, it is sitting at home disengaged.” 

Green Party – In a written statement to Attitude, the Green Party opposed the minimum wage exemption for disabled employees.

“People with impairments should be supported to work and their workplace rights upheld – employers should not be exempted from paying them the minimum wage. 

The Greens would reform the Human Rights Act to remove the exception which allows pay discrimination for disabled people.”

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Alice Neville
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The resolution

The Minimum Wage Act exemption prompts heated discussions and shock when explained to those hearing about it for the first time. But for those who are employed under the scheme, it’s a lifeline that gives purpose, independence and friendship. Forcing the businesses involved to pay their workers the minimum wage will result in closure and mass unemployment of what could be New Zealand’s most vulnerable demographic. As it stands, the Minimum Wage Act exemption is legal and doesn’t seem likely to be changed anytime soon. But is it exploitation? You decide. 

Public Interest Journalism funded through NZ On Air.

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(Image: Archi Banal)
(Image: Archi Banal)

Local Elections 2022October 12, 2022

Just how big was the ‘change’ vote, and how many mayors hate Three Waters?

(Image: Archi Banal)
(Image: Archi Banal)

Analysis: Almost half of NZ mayoral offices have new occupants. But most of those didn’t defeat the incumbent. Plus: where the elected mayors stand on Three Waters.

The name is on the tin. Local elections are local. They are not a referendum on the performance of central government. But nor do they exist in a vacuum. Whether or not you go along with the idea that the weekend’s results were “a spanking for the Labour Party and the prime minister”, there’s no doubt they send a message. 

Auckland, Wellington, Christchurch and Dunedin all have new mayors. In Wellington, centre-right incumbent Andy Foster was defeated by the Green-backed Tory Whanau, but the other three cities have gone from left-inclined mayors (former Labour ministers Phil Goff and Lianne Dalziel stood down; Dunedin Green mayor Aaron Hawkins was unseated) to centre-right leaders in Wayne Brown, Phil Mauger and Jules Radich. In the super city, home to a third of the country’s population, and in the capital, Labour-endorsed candidates were defeated. 

The traffic wasn’t all one way. As well as Whanau’s victory – which came on the back of a formidable year-long ground campaign – Campbell Barry held on in Hutt City, Anita Baker was comfortably re-elected in Porirua. Based on the preliminary count, Moko Tepania will be mayor of the Far North. In Hamilton – the fourth biggest mayoralty by population – Paula Southgate’s centrist approach won her re-election. 

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Toby Manhire
— Editor-at-large

The low turnout – likely to end up at 40% or so across the country – makes it slightly trickier to read any tea leaves in terms of next year’s general election, but it does reveal the mood of those who are exercised enough to vote. And the mood, in very general terms, appears to be one of broiling frustration with The Way Things Are Going. Donald Trump used to be called a deranged comments thread made human. Wayne Brown is not that at all. But he does sometimes seem like the personification of a Herald letters page. Harrumph.

Brown is not, however, straightforwardly blue or red. He claimed during the campaign to have voted for both main parties, and to have been getting texts of advice from both John Key and Helen Clark. Across the country, affiliation to a parliamentary party is rare. 

In Britain, the turnout is even more dismal than Aotearoa, but the party alignments make it easier to (cautiously) detect a shift in party-political mood. We can’t, for example, produce a lush visualisation like this:

House of Commons Library

Incumbency and churn

Of 66 mayors set to be sworn in in the coming days (Tauranga has commissioners for now), 31 are new to the role – or, such as in the case of returning mayor and celebrant of Ruapehu District, Weston Kirton, weren’t in the role last term. Perhaps the post-Covid great resignation is to blame, but a historically high number of mayors, 20 of them, decided to call it a day before these latest elections. Eleven new mayors are there because they beat the incumbent. That’s up, too, but hardly a wipeout. It’s one more than at the last election.

Thirty-five sitting mayors are returning. Of those, six were re-elected unopposed; nobody stood against them. In a seventh uncontested mayoral election, Kawerau deputy mayor Faylene Tunui stood unopposed.

(All of that is based on preliminary results, with four– Far North, Matamata-Piako, Southland and Gore – still looking too close to call.)

Watery graves

The central-local fault line has become increasingly pronounced. There’s the health system, polytechs, and housing intensification edicts, but the issue that loomed above them all through campaigns around the country, the lightning rod for frustration with the Beehive, was by some distance Three Waters. 

The upset among many sitting mayors and councillors and candidates covered a range of grievances, most centering on a belief that a critical part of the local authority sphere is being seized. Some reject the approach entirely; others reject the design and the drawing of the “entity” maps. Many began their criticisms, it’s worth noting, with words to the effect of “clearly things need to change but”.

Some argue they’ve been managing water infrastructure well and shouldn’t be punished because of other councils’ neglect. Many say the consultation process was insufficient and that alternatives have not been properly considered. Still others attack, expressly or by way of insinuation, the co-governance model. 

On RNZ yesterday, Jacinda Ardern responded to questions about the message sent on Three Waters by local elections by saying that the infrastructure overhaul required was costly, and if left to local authorities that would entail hikes in rates. 

“While there are many who have expressed a view on Three Waters, you haven't had anyone arguing the counterfactual – that is, if we stick with the status quo that they would support rate rises, which is the inevitable outcome,” she said. "The alternative to Three Waters is rate rises in the thousands because of the additional water infrastructure that is required, no one's out campaigning on that."

One candidate for the Nelson mayoralty told me during the campaign that councils could no more vote down Three Waters than they could stop GST. That may be literally true, but there is no doubt they can send a thunderous message – as indeed did the man who was elected mayor, Nick Smith, who said there was “real anger around the government on Three Waters. Unless the government has a deathwish they do need to revisit that”.

Mayors do not necessarily represent the broader position of their councils, but they're as useful a sample as any. Across the group of 66 preparing to chuck on the chains, we’ve looked at their stated positions on Three Waters and assessed their position across a range from strongly against to strongly in favour of the reforms, drawing on statements on (a) Policy.nz, (b) candidate blurbs and (c) media reports. 

That analysis suggests 43 mayors opposed to the Three Waters reforms and nine in support. There were 14 that were ambivalent, unsure or where it was too ambiguous to be sure. The broad sentiment, however, is clear enough.

The three mayors we’ve gingerly classified as strongly in support of Three Waters are Tory Whanau in Wellington, Monique Croon in the Chatham Islands, and Anita Baker in Porirua. 

Only three of the successful mayors who took part in Policy.nz listed opposition to Three Waters among their three priorities: Vince Cocurullo in Whangarei, Andrew Tripe in Whanganui, who both placed it at #1, and Nobby Clark in Invercargill.

Ardern went on to say on Monday that “we've been open to changes, to try and make these the most effective changes that we can”. To win over the local politicians are not dead set against the reform, those changes will need to be substantial. 


Full list of New Zealand mayors

Based on preliminary results, 2022

Far North District Mayor Moko Tepania*
Whangarei District Mayor Vince Cocurullo
Kaipara District Mayor Craig Jepson
Auckland Mayor Wayne Brown
Thames-Coromandel District Mayor Len Salt
Hauraki District Mayor Toby Adams
Waikato District Mayor Jacqui Church
Matamata-Piako District Mayor Adrienne Wilcock*
Hamilton Mayor Paula Southgate
Waipa Mayor Susan O'Regan
Ōtorohanga Mayor Max Baxter
South Waikato Mayor Gary “Puku” Petley
Waitomo Mayor John Robertson
Taupō Mayor David Trewvas
Western Bay of Plenty District Mayor James Denyer
Tauranga City Mayor n/a
Rotorua Mayor Tania Tapsell
Whakatāne Mayor Victor Luca
Kawerau District Mayor Faylene Tunui
Ōpōtiki District Mayor David Moore
Gisborne District Mayor Rehette Stoltz
Wairoa District Mayor Craig Little
Hastings District Mayor Sandra Hazlehurst
Napier City Mayor Kirsten Wise
Central Hawke's Bay District Mayor Alex Walker
New Plymouth District Mayor Neil Holdom
Stratford District Mayor Neil Volzke
South Taranaki District Mayor Phil Nixon
Ruapehu District Mayor Weston Kirton
Whanganui District Mayor Andrew Tripe
Rangitikei District Mayor Andy Watson
Manawatu District Mayor Helen Worboys
Palmerston North City Mayor Grant Smith
Tararua District Mayor Tracey Collis
Horowhenua District Mayor Bernie Wanden
Kapiti Coast District Mayor Janet Holborow
Porirua City Mayor Anita Baker
Upper Hutt City Mayor Wayne Guppy
Lower Hutt City Mayor Campbell Barry
Wellington Mayor Tory Whanau
Masterton Mayor Gary Caffell
Carterton Mayor Ron Mark
South Wairarapa Mayor Martin Connelly
Tasman Mayor Tim King
Nelson City Mayor Nick Smith
Marlborough District Mayor Nadine Taylor
Buller District Mayor Jamie Cleine
Grey District Mayor Tania Gibson
Westland District Mayor Helen Lash
Kaikōura Mayor Craig Mackle
Hurunui Mayor Marie Black
Waimakariri Mayor Dan Gordon
Christchurch Mayor Phil Mauger
Selwyn Mayor Sam Broughton
Ashburton Mayor Neil Brown
Timaru Mayor Nigel Bowen
Mackenzie Mayor Anne Munro
Waimate Mayor Craig Rowley
Chatham Islands Mayor Monique Croon
Waitaki Mayor Gary Kircher
Central Otago Mayor Tim Cadogan
Queenstown-Lakes Mayor Glyn Lewers
Dunedin Mayor Jules Radich
Clutha Mayor Bryan Cadogan
Southland Mayor Rob Scott*
Gore Mayor Ben Bell*
Invercargill Mayor Nobby Clark

* TBC

Politics