Speech to Pacific Economic Development Agency - Pacific Business Trust

Good afternoon everyone, and warm Pacific greetings. Thank you for your lovely introduction Mary Losé.

It’s wonderful to be here today at the Pacific Economic Development Agency - Pacific Business Trust.

I want to acknowledge the chair Paul Retimanu and chief executive Mary Losé, your team and the many business owners who have taken time out of running their business to be here today.

For nearly 40 years PBT supported Pacific businesses to thrive and today they are in service of more than 2000 [2281 to be exact] Pacific owned businesses across the country in numerous sectors.

Pacific business owners are supported more broadly too as PBT is now part of the Tāmaki Business Network, alongside associations like the Auckland Chamber of Commerce, EMA, Tātaki and Heart of the City.

It’s so great to hear that you have an active membership of Pacific owned businesses across New Zealand. We know that businesses like yours are the backbone of New Zealand’s economy and we want to support this.

As most of you will no doubt be aware, last week this coalition Government delivered our first full Budget of the term.

I want to acknowledge that it hasn’t been a great time for all New Zealanders and especially for families and businesses across the country who are doing it tough. It has become a lot harder for New Zealanders to feel like they are getting ahead.

That is why, for the first time in 14 years, Budget 2024 will enable hard-working New Zealanders to keep more of their own money through the Government’s tax relief.

What’s more, this Government is committed to investing in the services that are crucial to a thriving society, including increased funding for health, education and law and order. In fact, two-thirds of the new spending in Budget 2024 goes to these three areas.

I want to assure you all today that better times lie ahead.

The economy and the people who are part of it are resilient, and will recover – as long as we, as Government, continue to focus on equipping our small Kiwi businesses the tools they need to keep their businesses growing and their workers happy.

Alongside the Budget, this Government is also serious about delivering policy change in the areas that matter.

And when it comes to important policy change, this Government has heard loud and clear that changes to the Holidays Act is right up there in the priorities for businesses. Bringing about change will also benefit workers, by making it easier for them to understand their entitlements and confidence to know whether or not they are receiving what they are entitled to.

Today, I want to tell you how the Government intends to progress work to fix the state of the Holidays Act.

Since becoming Minister for Workplace Relations and Safety, I’ve heard that the public wants Holidays Act changes fast, but there is also concern that after all this time waiting, the Government gets it right.

In my mind, I couldn’t agree more. Changes to the Holidays Act are incredibly technical and complex, which is why it has taken so long in the first place. If we’re going to dive into this rather daunting job, we need to make sure we get it right.

I have now had time to consider the direction of the previous government’s work to simplify the Holidays Act. Although the previous Government spent many years working on a solution, I believe there are further opportunities to improve the simplicity and workability of the legislation.

I also believe that the only way to know for certain whether the changes this Government is proposing are workable and desirable will be to hear from the people who will eventually have to work with or who are affected by the Act. That is, people like you.

We need your help to change the complexities of the Act so that business owners and your workers can focus on what they do best– rather than spending valuable time and resource trying to comply to the Act and how it stands today.

That is why I am pleased to announce that, we will be releasing draft legislation to replace the Holidays Act so that the public can have their say. An exposure draft will be released for targeted consultation so that we can get feedback on whether we are on track to improve the simplicity and workability of the legislation. The exposure draft will be released in September this year.

From today the public will be able to register their interest with MBIE to be part of the targeted consultation.

I expect to hear from a range of stakeholders, including workers, employers, payroll providers and legal experts. One of the challenges we will face in developing the legislation is ensuring it works for a range of working arrangements and scales of payroll infrastructure. That’s why I would like to make a particular call out to small Kiwi businesses. I want to hear from you. We need the Act to be workable for everyone, from the multi-national corporates to the small-town family run businesses.

I am also pleased to share with you today some of the decisions this Government has already made to include in the exposure draft.

This Government has heard from a number of businesses who are struggling to adjust to the previous Government’s decision to double sick leave entitlements for all eligible workers. Workplaces that rely on part-time workers are now particularly vulnerable to unexpected staffing shortages.

To explore this issue further, the exposure draft set for consultation will include a proposed approach to pro-rating sick leave, to better reflect how much an employee works.

This means if an employee works a full work week they will receive 10 days sick leave. An employee who works fewer hours will receive a proportion of that entitlement. What that proportion looks like will form part of our consultation.

This Government has also agreed to deviate from the previous government’s direction in some places. For example, the exposure draft will now include a change in how annual leave is provided, moving from an entitlement system to an accrual system.

Shifting to an accrual system for annual leave entitlements is just common sense. While workers might not notice any change in their entitlements, from a payroll perspective this should make a huge difference. An accrual system should help avoid the complex calculations that regularly stump payroll software and should therefore reduce compliance costs for employers.

Further changes to the previous government’s direction will also be on the cards, which is why the exposure draft will be accompanied by a consultation document outlining further options for improving simplicity and workability. Those options will involve more complex trade-offs.

As I said at the start, if we’re going to open up the Holidays Act once, we have to make sure we get it right.

My priority with these changes is to increase certainty and reduce complexity. This is about achieving sensible and workable legislation.

And with your help, I am committed to delivering a new Holidays Act by the end of the term.

I, and this Government, wish for our businesses and their workers to thrive, for Kiwis to have good jobs to help them provide for themselves and their families, and for businesses to have the confidence to employ. Changes to the Holidays Act will help both businesses and workers build confidence and will allow businesses to spend less time on compliance and more time on the services they provide.

Thank you once again for having me here today and for your hospitality. I hope to get the chance to speak to you one on one. If that’s not possible today, I hope our paths will cross again soon. Thank you.