Richard Wagstaff: NZCTU President voices disapproval with the Government scrapping living wage contract rules

Unions are disputing the Government's reasoning for scrapping living wage contract rules.

This move is part of a wider proposal to simplify the procurement process for companies wanting Government contracts.

Council of Trade Unions President, Richard Wagstaff, says the argument that small businesses are missing out because they can't afford wages doesn't make sense. 

"What it is, basically, is a standard. And everyone bidding for Government contracts has to meet the same standard, so there's no disadvantage to a small, medium or large businesses. They're all on the same playing field."

Wagstaff explained that small businesses can be competitive. 

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Episode Transcript

Speaker 1 (00:00):
Bryan Bridge.

Speaker 2 (00:01):
Unions in the opposition not happy with the government's new
rules for contracting companies that procure US work to Companies
will no longer have to pay the living wage for cleaning,
catering and security guards services, amongst a raft of other
changes that was announced this morning. Richard wagg starts with
the councilor Trade Unions.

Speaker 1 (00:19):
Good evening, Thank you, Ron. Good to be back now.

Speaker 2 (00:22):
The argument is some small businesses companies can't afford to
pay the living wage, so why should they miss out
on government contracts?

Speaker 1 (00:30):
Yeah, I don't think that makes a lot of sense.
You see, what it is basically as a standard, and
everyone bidding for government contracts has to just basically meet
the same standard. So whatever the wage minimums are, or
indeed any other minimums, everyone has to has to meet them.
So there's no disadvantage to small, medium, or large businesses
there are in the same playing field. What this does, though,

(00:51):
is basically enable all of those providers contractors too basically
bid on minimum wages, and this is without standards we know,
or drive wages down.

Speaker 2 (01:01):
But the thing is that the standard, the legal standard,
is the minimum wage, not the living wage, right, So
there is Now, there are perfectly legitimate businesses out there
paying the minimum wage who at the moment can't get
government contracts.

Speaker 1 (01:18):
But as I said to you, when they go for
government contracts, they need to pay the same rates as
everybody else. They shouldn't be able to undercut them. And
that's the problem. But when these when these tenders, when
these things go to tenor what we'll see is that
the wage rates for kanas, for caterers, for security services
will all drop because of the competitive tendering process.

Speaker 2 (01:35):
Might not every company can afford to pay the living wage.
They don't they set up like that, Smaller businesses can't
afford to do that. You'll end up with large companies
taking all the government contracts.

Speaker 1 (01:48):
I don't think that's necessarily the case. I think small
businesses can be competitive. But basically what you're saying is
that they by allowing them to drop their wages, so
will larger businesses drop their wages to everybody will drop
their wages, and only winners will be you know, whoever's
paying for the overall cost, But it certainly won't be
the workers. The workers will be the losers in that
Program's exactly the same as the bus drivers, and that's

(02:08):
why we wanted to have fair pay agreements. Every time
councils put out bus services for tender, everyone who tended
on the minimum wage except the companies that had proper
agreements with their stuff, and they couldn't win tenders because
they were stuck on higher wages. And that's the problem.
They keep driving wages and conditions down with tendering.

Speaker 2 (02:25):
Richard, appreciate your time this evening, Richard Wagstaff, the Council
of Trade Union's president.

Speaker 1 (02:30):
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