Labour is using Covid-19 as the justification for imposing new costs on employers in the form of an extra week of paid sick leave for each employee, but the real reason is because their union mates have been applying the pressure, National’s Workplace Relations spokesperson Scott Simpson says.

“If Covid-19 really is the reason Labour want the change to sick leave entitlements, that come into effect tomorrow, then a better option would be to attach a sick leave response to the existing Covid relief package.

“It would be appropriate to limit the life of an increase to sick leave entitlement and target those who need to take time off work in response to the pandemic. Instead, Labour has used the funds for Covid recovery for policies completely unrelated to Covid.

“MBIE figures show the additional week will add about $1 billion a year to the nation’s wage bill. That’s about 1 per cent of the total wages paid New Zealand wide.

“Labour never gets tired of spending other people’s money, but it isn’t just businesses who will pay for this, it is every single one of us. The extra cost on business will inevitably end up being recouped by increasing the price of goods and services.

“The only thing this Government likes more than regulating businesses is imposing more costs on them. They seem to have forgotten how much businesses – especially small businesses – have been impacted by Covid-19 and have no hesitation in increasing wage costs in every way possible.

“It’s small and medium sized businesses that make up the bulk of our economy and they will be the ones hurt most by the new sick leave rules as they are the least able to absorb the extra cost not just of the leave but of replacing an employee who is away on leave.

“The unions have far too much power over Labour Party policy. They are connected politically, historically and financially, and clearly have decided that while they have a parliamentary majority they need to squeeze every ideological policy in.

“Making it more expensive to hire a new employee does nothing to encourage job growth. It seems there is a basic lack of understanding amongst Labour MPs about how businesses and our economy work.”

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