Business wants fair pay too, says Ardern

Prime Minister-elect Jacinda Ardern / Mark Mitchell.

Most businesses support a "fair set of employment policies" despite the opposition voiced by some business leaders to the new government's plans to raise the minimum wage and pursue a new style of Fair Pay Agreements, Prime Minister-designate Jacinda Ardern says.

Addressing the Council of Trade Unions biennial conference in Wellington, Ardern said: "There are always those that oppose change - who are comfortable in a status quo that is delivering for fewer and fewer people".

"But I know they are not the majority. I know most businesses want a fair set of employment policies. They know that we need to boost our productivity and low wages are a barrier to that because they discourage investment in training and capital," she said.

Addressing an ecstatic trade union audience, Ardern's comments were her first since the announcement of the new government's coalition and partnership agreements yesterday, which promised to raise the minimum wage to $16.50 an hour next April and to $20 an hour by April 2021.

Labour is also proposing to abolish youth rates so that there is no wage discrimination against younger workers.

Most workers were employed by "big, profitable companies", but she acknowledged "there are some small businesses that will feel the effects of larger staff costs more acutely".

"That's why one of the tasks of the Tax Working Group will be to look at models overseas for lower taxation for small businesses."

Ardern has previously publicly discussed the potential for a lower tax rate for SMEs that agree to pay their employees according to a Living Wage calculation.

With respect to formulating the new Fair Pay Agreements policy, Ardern said Labour had deliberately not locked in the details before becoming the government and would seek a three-way partnership with employers and unions.

In the same way that MMP voting had "forced a culture of cooperation into politics", the new government would seek to "take that culture of cooperation to the next stage".

Also addressing the CTU conference was James Shaw, co-leader of the Green Party, who said his party's three big areas of focus were climate change, the future of work, and pay equity.

Promising "trees and trains - heaps of them", Shaw said the Greens' policy to plant a billion trees would provide regional employment and revive the forestry sector while creating carbon sinks to help combat climate change.

It was also important to try to find work for people affected by the death of industries made redundant by climate change.

"It's no good telling a coal miner to retrain as a tour guide," he said. Rather, investing in like-for-like industries using existing skills should be the objective.

For example, miners would be needed to extract silicon deposits in Southland that could be used to produce solar photovoltaic cells for renewable electricity generation.