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Election Insights 2023 - Labour market policy reset

16 October 2023

Two labour market policy commitments have made it into National’s “100 day action plan” – the repeal of the Fair Pay Agreements (FPA) law and the expansion of 90-day trials to all businesses, regardless of size.

Both are also Act policies and would be supported by New Zealand First (NZ First) which insisted when it was in coalition with Labour in 2018 that the 90-day rule be retained for small employers (fewer than 20 employees). Labour would have wiped it from the statute books entirely.

And there will be some urgency around scrapping the FPA system to abort those negotiations that are already in progress and to prevent any FPAs being completed – although the odds against the unions being able to bring one to completion under a National-led government, even given a year, would be huge.

National is also committed to implementing a Member’s Bill introduced this year by Deputy Leader Nicola Willis which would allow the two primary caregivers to divide up their paid parental leave as they wish, taking it together or separately or a mix of both. This is likely to be progressed despite the tight fiscal position because it won’t extend existing entitlements so will not create any extra costs.

Work on the Holidays Act will continue because all parties agree that reform is necessary but Grant Robertson’s Income Protection Insurance Scheme, already on pause as part of Labour’s policy bonfire, will now be binned.

Act is much more hard line than National on employment policy. It would:

  • Strike out the 2 January public holiday to compensate employers for Matariki;
  • Prevent contractors from challenging their employment status in the courts (as the Uber drivers did successfully);
  • Enforce a requirement that the Employment Relations Authority deliver its written determination within a month of concluding an investigation;
  • Remove eligibility for remedies if an employee’s behaviour contributed to a personal grievance (PG) for unjustifiable dismissal or unjustifiable disadvantage, and speed up the PG process; and
  • Remove the ability for the Employment Relations Authority unilaterally to reinstate an employee.

NZ First is more centrist, although it does advocate a lifetime limit of two years for access to Job Seeker Support for the unemployed.

Minimum wage

The three potential coalition partners are spread across a spectrum on this issue.

Act would impose a three-year freeze. NZ First would “examine the feasibility” of extending the statutory minimum for adults to “at least $25 an hour”, compensating businesses with a tax concession to cover the cost. And National is in the middle.

It generally opposed the increases delivered by Labour but Christopher Luxon has not ruled out future adjustments at “the right time and the right place”.



National would increase the cap on seasonal workers and explore adding new countries beyond the Pacific Islands to the Recognised Seasonal Employer scheme. Its manifesto is silent on the Accredited Employer Worker Visa, although it scoffed in Opposition at the policy’s “disastrous start” with only one application processed within the first four weeks of implementation.

NZ First and Act both have the policy in their sights:

  • NZ First would replace it with a Skills Shortage Visa and a Labour Shortage Visa: and
  • Act would “simplify” it by abolishing the labour market tests and the median wage thresholds and by making it easier for migrant workers to move between accredited employers.

This article is part of our Election Insights 2023 series, which is being published throughout October - you can sign up to articles by email here.

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