Wellington Chamber of Commerce

Friday 23rd October 2015
Council should follow own legal advice and drop Living Wage

Wellington Chamber of Commerce is calling on the Wellington City Council to drop its flawed Living Wage proposal after its own legal advice said the changes would not be within the law.

The council’s own advice says “the Council is at risk of being found to have acted outside of the purpose of local government as set out by sections 10 and 11 of Local Government Act” and that the changes would be unlawful because “the increased cost that arises as a consequence of the living wage should allow for a corresponding increase in the quality or effectiveness of the particular service being provided.”

Chamber of Commerce Chief Executive John Milford says the council must take heed of its own legal advice.

“The Chamber has said from the start that the council’s pursuit of the Living Wage is an ideologically driven decision. The council has a duty to ratepayers to deliver services in a way that is most cost-effective for households and businesses. This is their clear legal obligation under the Local Government Act.

“The council’s own paper notes that for just the one security contract alone ‘requiring a living wage to be paid would create a significant cost to the Council. The increase is estimated to be more than $2.4 million across the life of the contract of seven years …and the cost to the Council is likely to be approximately a 19% increase on the total contract price.'

“Council needs to stop playing feel-good games with ratepayer funds and focus on the things that will actually deliver more jobs and opportunities for Wellington.

“They surely cannot ignore what their own lawyers are telling them. That would be very irresponsible.

“The decision to force third-party contractors to implement the so-called Living Wage or face losing the council’s business is most concerning. That not only puts Wellington jobs and businesses at risk, it goes well beyond the council’s authority.

“The Living Wage’s methodology has repeatedly been shown as flawed.

“Wage increases should be about performance and productivity. This is not what the Living Wage is based on. Real wage increases cannot be created by the stroke of a pen.

“Central government has a process for setting a fair and transparent minimum wage annually, and New Zealand’s minimum wage is currently the fifth highest in the OECD.

“The Chamber urges councillors to heed their own legal advice, act responsibility and stop the implementation of the Living Wage.”

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