Wednesday, 30 March 2016

WEDNESDAY, 30 MARCH 2016

WEDNESDAY, 30 MARCH 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Tax Avoidance—Multinational Enterprises

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement with regard to multinational corporations that “I suspect they are legally paying their correct amount of tax; the question is are they ethically paying the right amount of tax. It feels hard to believe that they are”?

Hon BILL ENGLISH (Acting Prime Minister): Yes, it is unfair that some multinational companies appear to be able to structure themselves so that they avoid paying tax anywhere in the world or so that they pay minimal amounts of tax. The only lasting solution to this problem is collective global action. The good news is that the OECD is leading work on base erosion and profit shifting, and New Zealand is an active participant in that work.

Andrew Little: Do all multinational companies in New Zealand comply with the OECD guidelines on multinational enterprises, which state that “enterprises should comply with both the letter and the spirit of the tax laws and regulations of the countries in which they operate.”?

Hon BILL ENGLISH: They are certainly required to comply with New Zealand law. We need to bear in mind that New Zealand has the ability to tax the profits of these companies in New Zealand—that is, revenue minus expenses. If profit is generated elsewhere, we do not have the ability to tax it in other jurisdictions.

Andrew Little: How many multinationals has his Government taken to the OECD dispute resolution process?

Hon BILL ENGLISH: I do not have that information, and I am not sure exactly what process the member is referring to. The New Zealand model for taxing these companies is about as robust as that of any developed country—that is, we have tighter rules on transfer pricing and thin capitalisation regimes. If they make profits here, they are taxed.

Andrew Little: Does he believe that the Australian-owned banks in New Zealand—[Interruption]

Mr SPEAKER: Order! I ask the member to start that question again.

Andrew Little: Does he believe that the Australian-owned banks in New Zealand, which are the most profitable banks in the developed world, are paying the tax they owe, or are Kiwis having to carry the burden for them as well?

Hon BILL ENGLISH: I believe that they are paying the tax they owe. In fact, 4 or 5 years ago Crown Law won major tax cases, where we collected hundreds of millions more out of the banks—

Hon Trevor Mallard: That Michael Cullen funded.

Hon BILL ENGLISH: —that is right; he did, too—and since then the rules have been further tightened in ways that the banks do not like, but it means that they do pay pretty close to the statutory rate of tax.

David Seymour: Is the Prime Minister aware that our company tax rate of 28 percent gives New Zealand one of the highest effective tax rates on capital in the OECD and that a more effective way of gaining more revenue might be to have a more competitive company tax rate? [Interruption]

Mr SPEAKER: Unless the noise settles down, particularly from my left-hand far quadrant, I will be asking members to leave, and that includes Mr Cunliffe. When I get to my feet—[Interruption] Order! [Interruption] Order!

Hon BILL ENGLISH: Yes, by international standards, we have a robust company taxation system. New Zealand has always believed in a broad based - low rate system, but that means having a company tax rate close to the higher levels of our personal tax rates. That is a bit unusual.

Andrew Little: What conversations has he had with the member for Epsom in relation to tax collection and the need to pay for superannuation, a topic that I know is very dear to the heart of the member for Epsom?

Hon BILL ENGLISH: None.

Andrew Little: Is it acceptable that his Government is penny-pinching to the extent that the health Minister now says of Pharmac that it has not got the money at the moment to buy life-saving medicines like Keytruda while, at the same time, multinationals are ripping us off for anything from $500 million to $7.3 billion a year, which is what the Tax Justice Network says New Zealanders are being ripped off by?

Hon BILL ENGLISH: I simply disagree with and rebut the assertion the member is implying, that the Government is soft on the taxation of companies. It is simply not the case. We have one of the most robust taxation systems for company profits in the developed world. The type of issues the Tax Justice Network is pointing to can be dealt with only by global cooperation to ensure that multinationals pay their tax somewhere. But, for instance, if Fonterra sells a billion dollars’ worth of product in China, we do not want the Chinese Government levying 30 percent tax on them, and nor should it be able to.

Andrew Little: Will the Government join with the Labour Party and support a parliamentary inquiry into multinational tax avoidance and stronger laws and more money for enforcement; if not, why not?

Hon BILL ENGLISH: The Parliament has a regular opportunity every time it looks at a taxation amendment bill—there are two or three a year, generally—and if you look back through the record of what the New Zealand Parliament had done, you will see that the Finance and Expenditure Committee has supported, as far as I know, every single measure that the Government has taken to ensure that multinational companies pay tax on their profits in New Zealand.

Chris Hipkins: I raise a point of order, Mr Speaker. I waited until the end of that question exchange because I did not want to interrupt the flow of the questioning, but while you were on your feet earlier on, chastising a member to your left for interrupting while you were on your feet, a member on your right did exactly that, to which you, I think, indicated some appreciation by laughing. I just want to get some reassurance from you that members on the left and the right will be equally chastised when they engage in that kind of behaviour.

Mr SPEAKER: I certainly did not appreciate the interjection that was thrown. It should not have happened. At the time, I was on my feet dealing with another matter, and there was a very large bulk of interjection coming. There was a quip that some people found amusing. It was unhelpful and should not have occurred, particularly whilst I was on my feet.

Economic Programme—Job Creation and Unemployment

2. KANWALJIT SINGH BAKSHI (National) to the Minister of Finance: Does he agree with the Prime Minister’s statement that “building a strong economy that … creates more jobs will remain front and centre of the Government’s agenda”?

Hon BILL ENGLISH (Minister of Finance): Yes. Under the Government’s economic management we have seen higher incomes and more jobs for New Zealand families. In the last 3 years there have been 175,000 more jobs, and forecasts of slightly less than that number over the next 3 years, and unemployment is currently at 5.3 percent, having been quite a bit higher. Average annual wages have now reached $58,000, around $11,000 higher than in 2008.

Kanwaljit Singh Bakshi: What is the Government’s approach to supporting more jobs and higher wages for New Zealand families?

Hon BILL ENGLISH: We focus on working with businesses and with employees to ensure that there is an economic framework that encourages businesses to invest another dollar and employ another person, because that is at the heart of growth. I have to say that we are not sitting around planning for the mass loss of jobs, because we believe that businesses with confidence in an economy will shift their investment in a way that ensures that there continues to be more jobs created for people, despite the fact that some will be lost in some industries.

Kanwaljit Singh Bakshi: What specific steps is the Government taking to support employment through skills and trade policy?

Hon BILL ENGLISH: As a direct link between trade policy and job creation, we could end up with fewer new jobs if there were no new free-trade agreements such as the Trans-Pacific Partnership, which means better access to 800 million customers, which accounts for 36 percent of global GDP. We are also supporting employment for a range of initiatives that allow particularly young New Zealanders to find a pathway between secondary school and the world of work, Māori and Pasifika trades training, ICT graduate schools, trades academies, increased access to workplace literacy and numeracy, and working towards ensuring that all young people, regardless of where they start, can find themselves on a pathway to employment.

Kanwaljit Singh Bakshi: What support does the Government give to those New Zealanders who are looking for jobs but who are currently unemployed?

Hon BILL ENGLISH: The Government provides an effective minimum income for New Zealanders, particularly those who are currently without work, and on 1 April this year benefit rates for families with children will rise by $25 a week after tax. So the minimum income for those people without work and with children will rise by $25 a week, just next week. Around 110,000 families, with 190,000 children, will be better off. We are also very focused on training to support people moving from benefits into work. All the evidence is that where there are clear pathways and strong incentives people find work. In fact, we are not facing a situation where, because jobs are disappearing, we have large numbers of people on the unemployment benefit.

State-owned Enterprises—New Zealand Post and Kiwibank

3. METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: Ka tū a ia i runga i te mana o tana tauākī e mea ana, “New Zealand Post is Government-owned and we’re going to be keeping it,” ā, mehemea ka pērā a ia, ka pēhea tētahi paku whakawehenga nei?

[Does he stand by his statement that “New Zealand Post is Government-owned and we’re going to be keeping it,”; if so, will he also rule out partial privatisation?]

Hon BILL ENGLISH (Minister of Finance): Yes; and yes.

Metiria Turei: Has he asked Treasury to work on any options or costings for the full or partial privatisation of either New Zealand Post or Kiwibank?

Hon BILL ENGLISH: No.

Metiria Turei: Has he discussed at any time with the board of New Zealand Post that privatisation or partial privatisation could be an option; if so, when did he do that?

Hon BILL ENGLISH: No.

Metiria Turei: Can he guarantee Kiwibank customers that their bank will remain 100 percent New Zealand - owned?

Hon BILL ENGLISH: Yes.

Metiria Turei: What is he doing—[Interruption]

Mr SPEAKER: Order! Start the question again.

Metiria Turei: Sorry, there is just so much chatter from the back end of the room.

Mr SPEAKER: Order! Just—[Interruption] Order! There is a considerable volume of interjection coming from the right. The member is right to point that out. It must cease.

Metiria Turei: Can the Minister guarantee those who use New Zealand Post that the current level of service that they receive will continue?

Hon BILL ENGLISH: I think the member asked whether we could guarantee the continuation of existing services with New Zealand Post, and the answer is there is no guarantee of continuing existing services. Recent changes in post discussed in the last few days are part of a plan outlined in 2013, which New Zealand Post is executing to deal with the reality that fewer and fewer people want to use its service and, therefore, it needs to adapt the way it is organised, and maybe diversify into other services.

Metiria Turei: What is the Minister doing to ensure that New Zealand Post is able to retain its essential services, like rural post?

Hon BILL ENGLISH: The Greens could contribute by stopping using email and using envelopes. Post has had a bit of a boost recently from the flag referendum, actually, with many millions of dollars’ worth of business directed to them by the Government. The rural post is governed to some extent by the relevant agreements with New Zealand Post, and we have had no intention to change those in the short term.

David Seymour: Can the Minister reassure taxpayers that they are not about to take a Solid Energy - style haircut in respect of New Zealand Post?

Hon BILL ENGLISH: There may be a limited appetite for that style of haircut, but for the Solid Energy style of haircut—look, it is tricky. It is quite a challenge for New Zealand Post, and the Government as its owner on behalf of taxpayers, to retain ownership of it at the same time as we are seeing the business declining rapidly. There is no doubt New Zealand Post is worth a lot less than it was a few years ago, and that is by political consent of its owners—that is, its owners want to retain ownership. They do not want to see other people involved in its ownership, and seem happy to accept that the business will continue to decline, and, therefore, the value of New Zealand Post will continue to decline and taxpayers’ value is being lost every week.

David Seymour: Is any amount of loss to the taxpayer unacceptable when it comes to retaining New Zealand Post?

Hon BILL ENGLISH: I am speaking here about loss of value. In terms of profit and loss accounts, New Zealand Post is just holding its own. I suppose the answer to that question is that the Government’s clear and firm policy is to retain 100 percent ownership of New Zealand Post.

Tertiary Education Graduates—Incomes

4. SARAH DOWIE (National—Invercargill) to the Minister for Tertiary Education, Skills and Employment: What recent reports has he received on the benefits to students of tertiary education?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Today the Ministry of Education released a series of fact sheets that show the earnings and employability for graduates after study across a range of disciplines. This is based on actual tax return data, and the release shows those with a Bachelor’s degree earn, on average, around 40 percent more than the national median earnings after 5 years in the workforce, while those with postgraduate qualifications earn even more. It also shows the benefits of study continue to increase over time. The data complements the release by Universities New Zealand last month that showed a typical graduate earning around $1.6 million more over their working life than a non-graduate. Overall, the release provides useful information for students considering their future study options.

Sarah Dowie: Which qualifications provided the highest earnings after study?

Hon STEVEN JOYCE: The highest-earning qualifications include the health-related fields, plus engineering and information technology. They also demonstrate the value of students studying science, technology, engineering, and mathematics subjects. In particular, after 5 years those with a Bachelor’s degree in medical studies earn, on average, 201 percent more than the national median earnings. Those with a Bachelor’s degree in banking, finance, or law earn around 65 percent more, and for sales and marketing it was 47 percent above average. Those with qualifications at honours, postgraduate certificate, and diploma level have even higher premiums. Graduates with a qualification in accountancy had earnings 100 percent above the national median earnings. Graduates in civil engineering had earnings 91 percent higher, and graduates in mechanical and industrial engineering 83 percent higher. There were a few subjects where earnings were lower than the median wage, those subject choices including the performing arts, where graduates earned on average 20 percent less than the median wage, and visual arts and crafts, which was 5 percent less.

Sarah Dowie: Has he seen any reports on approaches that may impact the benefits to students from tertiary study?

Hon STEVEN JOYCE: Yes. I have seen a number of approaches promoted by a number of international commentators of more of a left persuasion in the last week or two that would see all graduates, no matter how much they get paid, being paid an additional $11,000 or $22,000, or thereabouts, by the Government—where they earn even 100 percent more than the median income, for example. They would then be taxed, though, by as much as 50 to 80 percent of their actual income. These two changes could have the effect only of discouraging people from training in occupations that our country needs. Jobs like engineering, science, and software development, which are very important for New Zealand’s future, would be discouraged on such an approach.

Chris Hipkins: If the National Government has finally woken up to the value of post-school education, and no longer thinks it is worthless, as the Minister tried to claim earlier in the year, what is he going to do to reverse the forecast 10,000 student loss that is going to happen over the next 3 years?

Hon STEVEN JOYCE: Firstly, the member is incorrect and is guilty of reading his Twitter backwards, which is quite hard to do, because it is quite short—

Dr David Clark: Ha, ha!

Hon Member: Slowest MP in 50 years.

Hon STEVEN JOYCE: The worst Opposition MP in 50 years—took him a while to catch up with that one. Thank you for arriving, Dr Clark. The important thing, actually, is that this Government is promoting tertiary education. It is promoting science, technology, engineering, and mathematics subjects. It has initiatives like Curious Minds—

Chris Hipkins: 10,000 fewer students.

Hon STEVEN JOYCE: —and Futureintech to encourage it. For Mr Hipkins’ benefit, if there is a projected decline in students, and there is, it is because of a demographic bubble of 18 years ago that has moved past. If Mr Hipkins would like to go back and encourage his mum’s friends—

Mr SPEAKER: Order! [Interruption] Order! I think the question has had the answer that it deserves.

Economy—Per Capita Growth

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is ASB economist Kim Mundy correct when she said last week, “While headline growth appears reasonable and encouraging, underlying per capita income growth remains flat and highlights New Zealand’s economic vulnerabilities going forward”?

Hon BILL ENGLISH (Minister of Finance): No, I disagree with the ASB economist. New Zealand—with the exception of, I think, one quarter, subject to revision—has had a long period of consistent GDP growth, which has delivered income increases of 2 to 3 percent to households at a time when inflation is low. Job growth has been pretty strong. Whatever other measures the member may want to apply, that actually shows that the economy is on a sustainable track of moderate growth.

Grant Robertson: What has been the percentage of per capita GDP growth in the last year, based on the Statistics New Zealand figures released last week?

Hon BILL ENGLISH: I cannot tell the member that. What I can point him to are the forecasts by ASB economist Kim Mundy, which show per capita GDP is to go to an annual growth of 2 percent over the next 2 years. That looks pretty robust, particularly when you have got a fast-growing population.

Grant Robertson: Could the failure of the Government to lift exports as a percentage of GDP and the fact that it is nowhere near its own target of 40 percent of GDP be one of the economic vulnerabilities Ms Mundy is talking about?

Hon BILL ENGLISH: No. In fact, recent performance in the export sector shows exactly why the New Zealand economy is less vulnerable than that member wants it to be. In a year when dairy exports dropped, I think, $3 billion, total exports actually went up by $5 billion—

Hon Steven Joyce: $2 billion.

Hon BILL ENGLISH: —sorry, $2 billion—which shows that the rest of the export sector is surprisingly strong. It is not correct, as that member has said, that New Zealand is far too reliant on dairy.

Grant Robertson: When independent commentators are calling per-person growth “sluggish” and “feeble”, does he not think that he should pay a little bit more attention to that instead of giving patronising answers?

Hon BILL ENGLISH: I thought they were referring to the Opposition spokesman on finance, but there you go.

Grant Robertson: Is “importing growth, rather than creating it”, as the Manufacturers and Exporters Association put it last week, one of the economic vulnerabilities facing New Zealand?

Hon BILL ENGLISH: No, and I do not know quite what it means. I mean, the fact is that a small, open economy like this has to be part of global supply chains, whether it is goods or services or, in fact, people, as illustrated by the pretty strong migration at the moment. We need to be more integrated with the world, so importing what we need to add value and, therefore, grow would seem to be a perfectly legitimate way of growing, as much as the bright idea that comes out of some young person who is setting out with a start-up that does not import anything. Both are legitimate sources of growth.

Grant Robertson: At what point is the Minister going to wake up from his 8-year slumber and work out that the economy has not diversified sufficiently, that we are still reliant on dairy prices, and that we actually have not got an economy growing per person, based on productivity?

Hon BILL ENGLISH: The economy has had, relative to others, a dream run, and in that sense we would be happy for that to continue. The member seems to be trying to make a point about a low per capita number from a year when dairy incomes slumped dramatically and we had record high migration. Of course in that circumstance, for 1 year, per capita growth would be a bit lower, but, as the economist he quotes has set out in the ASB graph, per capita incomes are likely to return to annual growth of 2 percent over the next 2 years.

Workplace Health and Safety—Legislative Changes

6. Dr JIAN YANG (National) to the Minister for Workplace Relations and Safety: What reports has he received on reactions to the upcoming health and safety legislation changes?

Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): The new health and safety law coming into force next Monday emphasises that everyone in the workplace is responsible for health and safety, because all workers deserve to go home safely every day. Unfortunately, I have received reports that kids should be banned from climbing trees at school because of this new law. This is patently ludicrous and incorrect. All playground and outdoor education activities possible today will still be possible next week—nothing changes. It is disappointing to see that that sort of fearmongering is being generated about the changes.

Dr Jian Yang: Should sports clubs and volunteer organisations be worried about the upcoming changes?

Hon MICHAEL WOODHOUSE: In a word, no. Another myth being perpetuated is that sports clubs, voluntary associations, and the like will be wrapped in red tape, resulting in people withdrawing from volunteering or from holding sports events. Again, this is nonsense. The Act adopts exactly the same legal framework that exists in the current law. The Government was clear that the current framework for voluntary associations and sports clubs was managing risk adequately, and transferred it into the new regime. Business should be alert to the new law when it comes into effect, but there is no need for the overreaction on things like tree climbing.

Housing—Housing Developments on Crown Land

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: How many houses have been completed as a result of the $52.2 million Crown land policy he announced in Budget 2015?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Minister for Building and Housing: Land purchase agreements have been finalised for eight parcels of land and negotiations are under way for a further 27 parcels. Over the next month we expect to make announcements on development agreements for these sites, which could provide around a thousand homes. In Budget 2015 we said that the first homes would take at least 18 months to get under way and, less than a year later, it is not surprising that none have actually been completed, but they are on track.

Phil Twyford: Why did he claim in the House yesterday that developments at Weymouth and Hobsonville were completed under the programme when they were both begun before he had even announced it, or is he now claiming credit for every random house built in Auckland to make it look like his failed scheme is actually working?

Hon BILL ENGLISH: Of course, Weymouth is one that the Minister was heavily involved with, and it seems to have made—by any standard—remarkable progress, but I would have to say that in the first 12 months it did not succeed in getting houses built. You do have to follow the process. For instance, iwi have rights under the Treaty settlements related to this land, and those rights have to be respected. That takes time.

Phil Twyford: How does he expect his Crown land scheme to make a significant difference to Auckland housing supply when it has taken so long to get off the ground and looks like it will be less than one-third of the 500 hectares that he and the Prime Minister promised, or has he identified more cemeteries and power substations to build on?

Mr SPEAKER: The Hon Bill English—either of those two questions.

Hon BILL ENGLISH: It will certainly help, in the context of what I think is a record for building consents from the data that has been published in the last few days. It will have the same sort of impact as similar schemes had in Christchurch. The member should feel free to look at the Crown land programme in Christchurch, because in relatively short order—about 18 months—it is now starting to produce a larger number of reasonably priced homes that middle-income families can afford.

Phil Twyford: Why does he trumpet today’s consent figures as some kind of success, when the 12-month rate of 9,500 will not even house the new migrants who have settled in Auckland over that period, let alone the 13,000 new dwellings a year that Auckland needs or the 40,000 shortfall that has built up under his watch?

Hon BILL ENGLISH: The Auckland Council can always do more. It can always become faster at issuing consents on subdivisions. It can always become a lot faster at issuing its building consents, sorting out its issues with Watercare Services, and ensuring that communities are properly consulted. It has got quite a bit faster, but it has got some way to go yet.

Phil Twyford: How can he try to spin an annual consent rate of 9,500 in Auckland as a success, when his own housing accord sets the target for this year at 17,000 new dwellings, so he is missing his own target by 7,500 new homes?

Hon BILL ENGLISH: The member, despite being an Auckland member, does not seem to understand that the Auckland Council makes those decisions. The Minister is not the consenting authority. The Auckland Council is the one that has to sign off every single thing, from the pavement to the height of the chimney, and the faster it can do that, the better. I share the member’s concerns, and I have had the chance to share them with the Auckland Council, that if it can go faster, it would be better, but it is going faster than it ever has in the last 10 years.

Question No. 8 to Minister

RON MARK (Deputy Leader—NZ First): My question is to the Prime Minister and asks: does he stand by his statement, “We welcome migrants who can make a contribution to New Zealand.”?

Hon MICHAEL WOODHOUSE (Minister of Immigration): The question is to the Minister of Immigration.

Mr SPEAKER: I am sorry. I did not hear. I suspect it was not—I am going to ask the member to read the question again, please.

RON MARK (Deputy Leader—NZ First): It is listed. It was actually lodged to the Minister of Immigration but it is listed to the Prime Minister, for some reason. It is listed to the Prime Minister—

Mr SPEAKER: My understanding was it was transferred, and legitimately so, to the Minister of Immigration. If the member would ask the question to the Minister of Immigration, and then we will proceed.

RON MARK (Deputy Leader—NZ First): I raise a point of order, Mr Speaker. The question for oral answer, listed here, says “Ron Mark to the Prime Minister”.

Mr SPEAKER: My understanding is that will be incorrect. It was originally set down, at 10.30, and then transferred by the Government to the Minister of Immigration, and for the person to proceed I am asking the member now to ask it in that fashion.

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Speaker. I think it is important we get to the bottom of the matter. I am not familiar with the background, but if the member lodged this question to the Prime Minister and the Government then subsequently decided to transfer it, it needs to be reflected on the Order Paper that it has been transferred and the member needs to be informed. He cannot be expected to ask a question to some other Minister if he has not been informed of the transfer. The Order Paper that we have all been given, the yellow sheet, says that it is to the Prime Minister and therefore it should be put to the Prime Minister.

Mr SPEAKER: I am afraid that is not right, and if the member looks at Speaker’s ruling 169/2 the question can actually be transferred at any time, right up to being asked. What I think has happened, and I will check it out subsequently, is that the mistake has been made in the presentation of that Order Paper. I was advised when I met with the Clerk at 11.30 that the question had been transferred and that the transfer had been accepted by New Zealand First. So the way forward is that I am going to ask the member to ask the question as I understand it, to the Minister of Immigration. I will, for the sake of Mr Hipkins, check later as to how this mistake may have happened.

Immigration Policy—Low-skilled Migration and Unemployment

8. RON MARK (Deputy Leader—NZ First) to the Minister of Immigration: Does he stand by the Prime Minister’s statement, “We welcome migrants who can make a contribution to New Zealand.”?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes, I stand by the full statement of that speech, which was “We welcome migrants who can make a contribution to New Zealand, and we value the benefit and opportunities that free trade agreements can deliver. … I back our farmers, our manufacturers, our ICT companies and in fact all our exporters to succeed. Our view of New Zealand is a positive, confident country that is well connected with the rest of the world, including our neighbours in the Asia Pacific region.”

Ron Mark: How can he stand by such a statement when Ministry of Business, Innovation and Employment briefing documents raise concerns about the number of low-skilled migrant workers at a time when there are more and more unskilled foreign students working here?

Hon MICHAEL WOODHOUSE: Well, the international education industry is now our second-largest service export earner. It generates about $3 billion, I think, and employs nearly 30,000 people directly or indirectly. One of the attractions to that is the fact that the students themselves can work for a small amount of time while they study. It is a very good marketing tool. Only about one in four takes it up but I think it is an excellent strategy.

Ron Mark: How does he think it is fair or even sensible that almost 67,000 foreign students with no work skills are allowed to work in this country while over 70,000 young Kiwis cannot get a job?

Hon MICHAEL WOODHOUSE: Well, I do not accept that international students have no work skills, any more than domestic students have no work skills. All students from time to time work part-time to augment their income in hospitality, in tourism industries, in horticulture, and so on. As far as young unemployed New Zealanders are concerned there are definitely challenges in getting them into work, but the Minister for Social Development, the Minister for Tertiary Education, Skills and Employment, and I are working together to ensure that Kiwis are at the front of the queue and that immigration policy is at the end of the pipeline.

Ron Mark: Does he agree with the Minister of Finance that “the inflow of migrants is driven by students,” and, he goes on to say, “that requires high levels of skill to grow”; if so, how does he reconcile that statement with the fact that the majority of international students are not actually in universities but in polytechnics?

Hon MICHAEL WOODHOUSE: I have not seen the quote the member is referring to but what I do know is that the migration trend is driven by international students, it is driven by working holidaymakers, it is driven by skilled workers we need to help things like the rebuild of Canterbury, and it is driven by our Recognised Seasonal Employer scheme policies, which are helping with the harvest in one of the fastest-growing industries in this country. It is a demand-driven immigration policy and higher migration is a sign of success not failure.

Ron Mark: Why, when Treasury—Treasury—and the Ministry of Business, Innovation and Employment are concerned, and are expressing that concern in written reports, about the number of low-skilled migrants and when the OECD has described the inflow as “unmanaged”, will this Government not change its policy settings on migration?

Hon MICHAEL WOODHOUSE: To the second part of the question, the answer is no. I believe that we have the policy settings right to respond to demand in a growing economy. As far as the lower-skilled worker trend is concerned, there is a very high labour need in many of those industries and if that member wants to go into the Western Bay of Plenty, into Nelson-Marlborough, into those places and say they would stop migration—[Interruption]

Mr SPEAKER: Order! There is just no point in carrying on with an answer when the member does not want to listen to the answer.

Drugs, Illegal—Policy

9. KEVIN HAGUE (Green) to the Associate Minister of Health: What steps will he be taking to ensure New Zealand drug laws are still fit for purpose given the recent findings by Johns Hopkins University and British medical journal The Lancet that the punitive approach to drug offending has done more harm than good?

Hon PETER DUNNE (Associate Minister of Health): In August last year, as the member I think will be aware, I published a new National Drug Policy. This contains 28 wide-ranging actions over the period from 2015 to 2020 that take a compassionate, proportionate, and innovative approach to addressing drug harm. I believe that this policy, like the attitudes being expressed in a number of countries around the world, reflect the view that the harm from illicit drug use is best addressed primarily through a health lens. This does not mean there is not still a role for law enforcement, but it should not be the primary approach, and the Government’s actions contained in the National Drug Policy reflect that position.

Kevin Hague: Does the Minister agree that the primary goal of the drug policy should be the reduction of health-related harm and that the regulatory response to particular drugs should be proportional to their risk of such harm?

Hon PETER DUNNE: Yes, I do. In fact, when I spoke to the United Nations Commission on Narcotic Drugs in Vienna last year I stated that in the New Zealand national statement the central pillars of a drug policy should be about proportion, innovation, and compassion. I believe we are generally achieving those goals in New Zealand, but, obviously, there is more to do, and I look forward to reviewing the National Drug Policy at its mid-point sometime next year.

Kevin Hague: What prospects for change does the Minister envisage at the upcoming United Nations General Assembly special session in New York on the world’s drug problem?

Hon PETER DUNNE: Having attended the United Nations convention meetings for a number of years now, it has been noticeable that there has been a perceptible shift in international attitudes from what one could describe 5 or 6 years ago as, essentially, a legalistic punitive approach to a much greater emphasis on public health issues being a driving force today. I also want to make one other point, which New Zealand has raised strongly over the years, and that is the use of the death penalty, particularly for drug offences. I hope that one of the outcomes of the New York meeting will be a very strong call for its abolition.

Kevin Hague: Is the Minister open to a cross-party working party of MPs from across the House to form to discuss moving drug law reform forward?

Hon PETER DUNNE: Yes, I am. I am certainly open to working with colleagues who have a range of views on the subject, and I particularly want to thank the member for the interest that he has shown and the approach that he has taken over a considerable period of time. I appreciate that.

Transport Infrastructure Investment—Economic Growth and Job Creation

10. JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport: Is the Government’s investment in transport infrastructure supporting the economy and creating jobs; if so, how?

Hon SIMON BRIDGES (Minister of Transport): Yes, it certainly is. The Government is investing billions of dollars in upgrading New Zealand’s transport infrastructure. That is because quality transport infrastructure gives businesses the confidence to invest another dollar, employ another person, and grow the economy. We have committed almost $11 billion to deliver seven roads of national significance that will move people and freight more quickly and safely. The projects are also a rich source of jobs, with Treasury estimating they will involve around 35,000 construction jobs in regions all over New Zealand. The Government is also investing strongly in accelerating a number of important regional State highway projects across the country, which Treasury estimates will create another 2,100 construction jobs.

Jonathan Young: What recent reports has he seen showing how the Government’s roads of national significance programme supports regional economic growth?

Hon SIMON BRIDGES: I have seen a recent report from the Horowhenua District Council that says that the Wellington Northern Corridor road of national significance will bring a fresh injection of economic potential and job growth to the Horowhenua district. The council says economic development in the region will receive a free hit from the project, with nearly 1,000 additional jobs over the next 20 years. The new road will support economic growth in the region and open up new business opportunities by attracting new investment into the region, and is further evidence of the Government’s commitment to build lead infrastructure to support the regions and grow our national economy.

Education, Minister—Statements

11. TRACEY MARTIN (NZ First) to the Minister of Education: Does she stand by all her statements?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes.

Tracey Martin: Does she stand by her statement on Newstalk ZB on 26 November 2015 that “No, I am not set on my decision. It is an interim decision”, with regard to Redcliffs School, and can she give an assurance that the final submission by Redcliffs School, due tomorrow, will be considered with an open mind?

Hon HEKIA PARATA: Yes.

Tracey Martin: Does she stand by her statements of 16 March 2016 endorsing the Intensive Wraparound Service as a lifesaver for special needs students, when only 28 of the 335 students supported by the Intensive Wraparound Service were included in the last Ministry of Education review, and of those, only 10 are predicted to have sufficient resources available to ensure they can stay in school?

Hon HEKIA PARATA: Yes, I stand by the statement I actually made, which was in reference to the report of the New Zealand Council for Educational Research, not the ministry’s, and I was quoting a parent who stated that she considered it a lifesaver for her child.

Tracey Martin: Does she stand by her statement on Newstalk ZB on Friday, 12 February 2016 that “the ministry makes the decisions on whether or not statutory intervention has to occur.”?

Hon HEKIA PARATA: Yes.

Tracey Martin: I seek leave to table a document released under the Official Information Act showing Minister Parata signing off on the decision to dissolve the board and appoint the commissioner at Rangiora High School, dated 11 February 2015.

Mr SPEAKER: Leave is sought to table that particular document. Is there any objection? There is none.

Document, by leave, laid on the Table of the House.

Tracey Martin: Does she stand by her statement on Newstalk ZB on Friday, 12 February 2016: “We don’t have anyone gagged”, with reference to Rangiora High School?

Hon HEKIA PARATA: I will have to take the member at her word that she has scrutinised these transcripts, but that would be true, yes.

Tracey Martin: I seek leave to table a letter from the commissioner of Rangiora High School dated 12 February 2015 to the then principal Peggy Burrows, effectively gagging her.

Mr SPEAKER: Order! The last part—[Interruption] Order! I would have put the leave until the last part was added; it was totally unnecessary. That is an interpretation—[Interruption] Order! That is an interpretation by the member, which was not necessary.

Chris Hipkins: Does she stand by all of her statements regarding the sufficiency of National Certificate of Educational Achievement (NCEA) literacy requirements, given that the New Zealand Qualifications Authority is currently proposing that eight credits of the 10 literacy credits required for NCEA level 2 could be met by getting a driver’s licence?

Hon HEKIA PARATA: I do, and to be clear about those eight credits, two are at NCEA level 1, for the written test, four are at NCEA level 2, for the restricted, and two are at NCEA level 2 for a full licence. They are based on literacy requirements relevant to each of those stages of the driver’s licence.

Chris Hipkins: Can she confirm that the only literacy requirement for all three levels of a driver’s licence is a 35-question, picture-based, multi-choice test; if so, how can she possibly claim that completing that test demonstrates almost all of the literacy skills required for further study or the workplace?

Hon HEKIA PARATA: No to the first part of the question, but can I say that the member’s unhappiness that this Government is actually doing stuff that his party has promised but never delivered is driving his angst.

Police—Resourcing

12. STUART NASH (Labour—Napier) to the Minister of Police: Does she believe the Police have sufficient funding to meet their operational objectives?

Hon JUDITH COLLINS (Minister of Police): Yes.

Stuart Nash: Why has she closed 30 police stations over the past 4 years, and does this not show that she is more concerned with saving money than with catching criminals?

Hon JUDITH COLLINS: I may be many things but I do not have the ability to close police stations all by myself.

Stuart Nash: Why has she overseen the cut of over 500 general duties constables since 2009, and does this not just show she is more concerned about saving money than solving crime?

Hon JUDITH COLLINS: The member may well be aware—and I know he is—that the general duties constables have actually been redeployed into other areas more specific to what the needs are, such as neighbourhood policing teams, which are very front line—they are just not called “general”.

Stuart Nash: Does she agree with the police’s own assessment that her cost-cutting drive has “resulted in instances of highly trained, well-paid police constabulary employees taking up middle and back-office roles”, and does this not mean good cops are now just filling out forms rather than catching criminals?

Hon JUDITH COLLINS: No.

Stuart Nash: Is it not the case that all these cuts and closures are just a way of making police claw back the $300 million in operational cost pressures that her Government has made them observe?

Hon JUDITH COLLINS: I do not know where that member has been for the last 7 years, but I can tell him that there has been a $200 million increase in the police budget since 2009. Police numbers have increased by 600 since this Government came to office, which shows what a sorry state of affairs it was when we took over.

Stuart Nash: I would like to table the briefing to the incoming Minister, which shows that the police have had to claw back $300 million in cost pressures—

Mr SPEAKER: Order! I just need to check. I would have thought that briefing to the incoming Minister was available on the internet to all members. I am sure it is.

General Debate

General Debate

MARAMA FOX (Co-Leader—Māori Party): I move, That the House take note of miscellaneous business. A couple of weeks ago Television New Zealand, to the credit of all those who want to know what it is like to be a Kiwi, put out a survey called the KiwiMeter. It was going to take an academic look at how we view ourselves. There were some questions raised about whether there was any validity in the KiwiMeter and whether or not some of the questions were, indeed, racist. I put it to you that some of the questions were not only racist but also bigoted and misogynistic.

There is a portion at the end of the KiwiMeter that has a whole lot of symbols—symbols that we are supposed to identify with as Kiwis. No. 1: the rugby ball—fantastic. No. 2: the All Blacks, who play rugby—again, fantastic. No. 3: the haka, performed by the All Blacks, who play rugby—fantastic. Not anywhere in those symbols did I see rowing, knitting, gardening, or any other sort of pastime that other Kiwis in this country might like to enjoy. We get to the questions, and the questions come up and say: “How do you perceive yourself? Do you think that Māori are privileged in this country?”. Oh, my goodness! What sort of a question is that? What are we asking here? Is this really how we see ourselves as Kiwis in this country? Is this what this KiwiMeter was designed to do, or was it merely a guise for fleshing out the most controversial subjects in front of our nation at the time: the flag referendum, or whether or not we want more Asians or immigrants in this country. All of those questions are the focus of the KiwiMeter, and, really, is that how we see ourselves?

Do you know what? There is some misunderstanding in this country, that Māori are seen to have some sort of undeserved special treatment—some sort of privilege. Well, let me tell you a little bit about that privilege. According to the statistics that have just recently been put out in regard to the Better Public Services goals, Māori make up 50 percent in the men’s prisons and 63 percent in the women’s prisons. Māori numbers for children in the care of Child, Youth and Family are 60 percent, despite 15 percent of the population being Māori. Is that the privilege that we are asked to determine in terms of whether Māori have special privileges in this country?

Then we come to the Kermadecs. Yes, that is right. We are going to talk a little bit more about the Kermadecs because this is the sanctuary that is a gift to the world on behalf of our Government. Yet we can, with one stroke of a pen, wipe away Treaty rights guaranteed to iwi under the fisheries settlement. We agreed that there should be a sanctuary, but, actually, can we please address the issue of the rights and the property rights that have now been eliminated?

Pita Paraone: Aren’t you sitting at the table?

MARAMA FOX: And it is something that the member who likes to yell out from the right has agreed to as well. In fact, the very honourable—or not so honourable; I am not quite sure—David Parker, and that was in regard to whether or not he has been a Minister and not whether he is, actually, honourable, said that Māori do not deserve compensation and that environmental rights need to take precedent over Treaty rights at all times.

We are not saying that Māori would not have agreed with the Government and gifted that area to the country, to the world, as a sanctuary, but, actually, if you do not bother to go and talk to them first, before you remove their Treaty rights, then surely it is a bit hard to swallow when they want to take you to court and determine whether or not compensation should be paid.

Are those the sorts of privileges that we are talking about? Or is it about the privilege of whether Māori should be recognised in water rights? Should we recognise Māori in water rights? No, because nobody owns the water. Is that not right? That is what we have heard. Yesterday we had a wonderful petition come here saying “We need to have not just swimmable water, we think, actually, but drinkable water, and water where we can gather our food.” Do Māori own the water? Do they have rights in water? Well, I will tell you who think they have rights to own the water—regional councils, because they allocate it as if they own it. They allocate it to farmers, to horticulture, as if they own the water. Once that water has been allocated, in fact, they do own it. They can also then go and sell it overseas. And what did they pay for it? Absolutely nothing.

But here is the thing: the one thing that we do need to ensure that is put first before all other things is the rights of our children. When—when—will we be debating that under urgency? When will we ensure the safety of our children? Thank you.

Hon SIMON BRIDGES (Minister of Energy and Resources): The flag referendum has been and gone, and there has been a lot of debate, and an unprecedented number of flags flying—I think that has been a great thing. The people have spoken and the flag has been retained, and we have all, as a country, I think, unified and moved on.

Phil Twyford: Ha, ha!

Hon SIMON BRIDGES: Or so I thought, Phil Twyford—or so I thought, but Sue Moroney did not seem to move on. She seems to think that rich people in baches are not allowed a view. The thing that is a little bit strange about that is that Sue happens to be a rich person with a bach. I think that on this side of the House we do not need highly paid political operatives like Matthew Hooton to tell us that that is a little bit stupid.

Hon Annette King: But you’ve got him anyway.

Hon SIMON BRIDGES: What, though, I say to Annette King, is doubly strange about all that is that the Labour Party—Annette King, Andrew Little, and the front benches—has been cosying up big time to those rich people with baches. They have been cosying up. They want to give them a benefit every single week. They want to give those rich bach owners a benefit every single week, so that when they come off, the spa is still hot, the pizza oven pizza ingredients are still fresh, and I think we could call this—what is it called? “UBI: universal bach-owners income”. That is what we have got here.

Hon David Cunliffe: Owner starts with an “o”.

Hon SIMON BRIDGES: Whether you are worth $20 million, David Cunliffe, whether you have got a house in Herne Bay—whatever your circumstances—you are entitled to a couple of hundred dollars a week. Here is the small, technical point about this that I cannot work out. What is the tax going to be to pay for that? Fifty percent? Eighty percent? Maybe. We do not know and we would like answers to that, but we can say, to be fair to the Labour Party, that it is based on some very clever thinking—robots are going to take over all of our jobs.

Grant Robertson: Lift your game.

Hon SIMON BRIDGES: Grant Robertson says robots are going to take over all of our jobs. There are a number of incredibly clever people behind this—professors from all around the world—and there is one incredibly clever person who has got more good ideas than anyone in New Zealand. If you do not believe him, just ask him—Gareth Morgan. He has come up with many good ideas, and in the year of ideas for the Labour Party, I just say to Labour members: “Don’t take just one good idea from Gareth Morgan—take them all. Get him to write your manifesto, because he is full of good ideas.”

There is the fat tax he proposed, which I know the Labour Party is keen on. Listen up, Annette King: he says that food is the No. 1 killer in New Zealand—the No.1 killer. I am not sure that not eating is a very good idea either, but there you go. He has also got the cat policy, and I know Phil Twyford is keen on that one. All good parties need a cat policy: “That ball of fluff you have at home has to go.” I do not know whether cats are getting the universal benefit as well—that is something for the Labour Party—but everyone else is, Phil Twyford. On this side of the House we are not concerned about cats, or the “universal bach-owners’ income”, or any of these things, because, actually, we have got real job creation happening in this country. We are creating real jobs—

Hon Annette King: What? Like the building of 10 bridges?

Hon SIMON BRIDGES: Well, Annette King mentions bridges. She mentions roads. There is transport infrastructure investment going on in this country. The roads of national significance, $11 billion worth of investment in this country, is creating 35,000 jobs, without robots. Regional highway projects throughout the country are creating, on Treasury’s estimates—which are quite conservative, actually—2,100 jobs. On this side of the House we do not need silly ideas like a universal benefit whether or not you are worth $20 million or are a rich bach owner. We have got real job creation in a country that is increasingly confident.

JACINDA ARDERN (Labour): I think we will file everything that Simon Bridges just said under the heading of “blatant denial”—blatant denial about the current set of circumstances we are experiencing in the wake of the flag debate in New Zealand.

Do not get me wrong. I have always believed that Governments can multitask. I have always believed that you can do the big stuff and the progressive stuff all at the same time. Take, for instance, addressing social inequalities with a policy like Working for Families whilst at the same time pursuing issues like civil unions and greater equality.

Labour has always been the Government that has been able to multitask. The common theme for Labour has always been: we do it for the stuff that matters—the things that are important. Did changing the flag matter? Well, it could have. Does the future of our relationship with the monarchy matter? Does the idea of us becoming a republic versus choosing to stay within the Commonwealth matter? Does the role of the Treaty as a living document matter? Did a discussion and debate about constitutional reform in New Zealand matter? Yes, absolutely.

So in as much as the flag could have been emblematic of all of those things, then, yes, that debate mattered. But that is not what John Key and this Government delivered to New Zealand when he started the flag consideration process. It was utterly hollow. It was almost completely meaningless, and even then and of itself the process he established to just simply pick a logo, which is what it was, was utterly shambolic.

So I make this simple request to the Government: now that we have wasted $26 million on a debate that could have mattered, could it please return to the issues that, quite frankly, New Zealanders are not just having a discussion about but are having to face day by day? Put aside the petty politics of legacy that John Key is flailing around trying to find at present, in the dying years of his Government, and instead start looking at what matters. You do not have to go far, Mr Bridges. Perhaps just open the paper today and read an article about 500 jobs being lost within New Zealand Post. That story is not in isolation—46 percent of jobs within two decades’ time will be obsolete as a result of the technological transformation that is going on globally, not just in New Zealand.

This is not new information from the Government. The fact that Bill English can sit there and say: “Look, we acknowledge that these losses were happening. It was signalled a long time ago.” In fact, his actual response to New Zealand Post was: “They’ve done pretty well under the circumstances.” That will be cold comfort to the 500 people who are facing job losses. A Government that is doing the stuff that matters would look ahead and see not just what 500 workers are facing but what thousands of workers are facing, and ask: what can we do? What does a just and fair transition look like?

If Simon Bridges’ response was anything to go by, the Government’s current perspective on that massive dilemma is to laugh, is to make a joke, whereas Labour has, instead, not only established the Future of Work Commission, we have brought together international evidence. We have brought together some of the best minds. We are not afraid of having a debate about what we need to do as a future Government to make sure that New Zealanders have a future that is dignified, that has work that pays, and that acknowledges that we increasingly have insecurity in our workforce.

That, Mr Bridges, is no laughing matter. If even Robert Reich is standing up and telling Governments that there is almost an inevitability to us having to debate issues like a universal basic income in this insecure environment, then he should stand up and pay attention to that. To do anything else demonstrates that this is a Government that not only is ignoring what matters, it is ignoring the people of New Zealand as a result.

Hon MICHAEL WOODHOUSE (Minister of Immigration): That speech by Jacinda Ardern would have had much more credibility about work and job growth if it came from a member of a party that actually supported job growth. Labour opposes every single thing that the Government is doing, and the largest single thing it has done is signed the Trans-Pacific Partnership (TPP) agreement. I thought that party believed in jobs and growth, believed in trade—a small, open nation wanting to trade with the rest of the world—but no. In opposition, Labour opposes. At least we have got to give it credit for that. It is certainly good at opposing because it opposes every good thing that is going on.

If that member really wanted to talk about the future of work, let us talk about the future of jobs under a framework that did not have New Zealand in the TTP. It is a pretty scary scenario. Let us take this: in Japan at the moment there is New Zealand lamb and Australian lamb. Both attract a 35.5 percent tariff into that country. If Australia joined the TPP agreement, over time its tariff would be reduced and then eliminated.

Hon David Cunliffe: What a static analysis.

Hon MICHAEL WOODHOUSE: It is an absolutely accurate analysis that brings home the folly of the Labour Party’s opposition to the TPP agreement, because in a future that had Australia in and New Zealand out, New Zealand lamb would be 38.5 percent more expensive for the Tokyo shopper. Which lamb is going to be bought? It is a pretty simple mathematical equation, and any party that purports to support jobs for our young and for our young Māori in freezing works and on farms but cannot support the TPP agreement has no credibility on this subject.

One of the other discussions that has been going on over the last few months is whether the strong positive net migration that we have right now is a good thing or a bad thing. One of the sad parts about that discussion is that certain people, including some in this House, confuse migration with immigration and immigration with residency. They are not the same thing. When Labour left office, for every Kiwi arriving home to New Zealand there were 2½ Kiwis leaving for the long term. Now for every Kiwi who is leaving, one is coming home. That is a sign of strength. It is a sign of and a contribution to positive net migration, but it is a sign of success, not failure.

The overseas workers coming in are also a sign of success, because we have a growing economy, and we are struggling to fill the jobs that are available. I accept that there is a mismatch. We have a hard core of unemployed and the Minister for Social Development and I are working extremely hard with employers to make sure that those people are at the front of the queue for jobs. But there is no doubt that if we want to rebuild Canterbury, if we want to support the horticulture and viticulture sector, which is growing gangbusters—even in the dairy sector we still rely on labour—we are going to need smart immigration policy to do that. I challenge those members on the other side to go to employers and convince them that it is easy to recruit an overseas worker, because it is not. There is no evidence that this policy is suppressing wages. [Interruption]

Mr SPEAKER: Order! I have warned a particular member once. He has just continued right throughout question time, and now throughout the general debate. Reasonable interjections throughout a robust debate I will accept, but a continual barrage like the one that I am getting will leave me no choice but to be asking the member to leave.

Hon MICHAEL WOODHOUSE: There is no question that there is a concern about the labour-market effects of migration policy, but we need to be very careful not to be the xenophobic ranters that some people are on the other side. Good migration policy contributes very strongly to this economy, and a strong economy contributes to good immigration policy. It is a feeding cycle. But the question of how many people are coming and gaining residence is a confusing one. If you listen to the rants on the other side you would think there are these floods of overseas people coming in and gaining residence. Nothing could be further from the truth. The highest residencies granted in this country were 10 years ago, when the Rt Hon Winston Peters was Minister of Foreign Affairs in a Labour-led Government. That number of residencies dropped 20 percent, and is now recovering from that historic low. It is hard to believe, given the rants that we hear from the other side: 52,000 residencies were granted at that time. It dropped to 42,000; it is going up to 47,000. Good economies, strong economies, need good immigration policy.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): Following from that contribution by Michael Woodhouse, good migration policy would not put at risk domestic jobs for Kiwis. It is that simple, and what the Government is trying to do is ensure that we open up the immigration doors and then say to our own people in our own local communities: “Oh, sorry. There’s no jobs here for you. We’ll go and get someone from somewhere else.” It does not work, because in communities it is a very simplistic but very simple message: the Government should not put at risk Kiwi jobs that could be gained here by people who have been educated here and skilled here—of different ethnicities, very diverse—and can be trained here. Invest in local talent. Let them have the jobs. Do not open up the doors carte blanche and then prevent Kiwis from taking up those jobs.

Those listening to this debate would be asking the question: why is the Government, after the fact, urgently going around to communities consulting on the Trans-Pacific Partnership (TPP)? Having negotiated it in secret, now the Government is trying to convince New Zealanders just how good it is for them. The information has come a little bit too late, and there are a lot of concerns that need to be responded to.

For example—and we asked the questions of the negotiators just today in the Māori Affairs Committee—what exactly are the benefits of the TPP to the Māori economy? Let us be under no shadow of a doubt. Māori want to contribute to the growth of this country in ways that realise benefits here: back in New Zealand, back in our regions, and certainly back to communities. They want to know the detail of that, but after the fact people are a little bit cautious about the Government’s strategy of trying to secure support and say that it has a good process in consulting with people on the TPP.

Simon “10” Bridges—Simon “10” Bridges—will be for ever known as the Minister who made big promises at a point in time when the regions were saying that the National Government had neglected the regions. He went up there, promised 10 bridges for Northland, and failed, and the deal was done because that particular seat, a former National stronghold, actually went to New Zealand First. So the National Government’s view that it has done well for the New Zealand economy and this has been delivered to the regions is simply not true—simply not true.

Marama Fox talked about the KiwiMeter. Well, here it is: if the flag had been put on that particular survey, I suspect the outcome would have been the same, because New Zealanders wanted more than just a change in a symbol. They wanted to know what sat behind the choice of a different flag. There had to be a better reason. What does our country stand for? What should the symbols reflect in terms of the country we look like? What would be the type of change that would show we have moved on as a country? It is a country that represents all New Zealanders. That was just a vanity project that simply did not get over the line.

Labour is prepared to talk about the things that really matter, because New Zealanders deserve that. They want to know what kind of country will build the economic opportunity and the social prosperity that will advantage the 99 percent of New Zealanders, who deserve a fair go. They want to know that there is going to be a Government that will look at the things that are most important for a changing demographic, and that understands that the demographic is younger, is more disenfranchised than ever before from community and also from opportunity through education. There is a big group of our young people that is simply not taking up the advantage in the system that it could.

Then there is the reality of technology and how that will change the workforce. No, it is not as bland as Simon Bridges has put it, that the robots are coming and therefore all the jobs will be gone. It is to recognise that technology will have its place in a modern economy, and we have to invest in the skills—the life-long learning opportunities for all New Zealanders to upskill and reskill—and continue to invest in our domestic workforce so that it can take advantage of higher-value jobs, a more skilled workforce, and a continually evolving and innovative economy.

These are the types of ideas that Labour will not shy away from. These are the types of ideas that we believe New Zealanders want to talk about, and these are the ideas that Labour will put well ahead of a vanity project, because we are serious about the future that we want to create for New Zealand.

Hon TODD McCLAY (Minister of Trade): Kia ora to the House and thank you to that last speaker, Nanaia Mahuta. Can I say that the OECD has suggested that a 10 percentage point increase in trade openness—that is, a share of exports plus imports to GDP—lifts GDP per capita by 4 percent. I think, deep down, that New Zealanders know this. I think New Zealanders know that we are a trading nation. They know that the very first people who came to this nation traded with each other: they traded between villages, between hapū, between different iwi groups. New Zealanders know that when settlers came to this country, they traded with them. And later on, as there were better trading links created and transportation, then New Zealanders—Māori and others—sold to Australia.

We are a trading nation, and I think everybody, in all parts of this Parliament and around the country, knows that without selling the things that we produce in abundance and the great services that our education system provides to New Zealand overseas, then, as a country, we are poorer not richer, and, as a Government, we do not get to provide the quality of living and a standard of life that New Zealanders demand and deserve.

That is why I think, in particular when the Hon Annette King said earlier to Michael Woodhouse that the reason so many New Zealanders are coming back to New Zealand is everywhere else is worse, that that is a bit glass half-empty. What she meant to say was that, actually, New Zealand is in a privileged position and a better position than almost every other country we have a relationship with and almost every other country we trade with because of the hard work of this Government, and successive Governments before us, when it came to opening up markets and giving opportunity to New Zealanders to sell the things that we produce to countries overseas. In many cases our nearest neighbours do not have the same quality of production to consume and to enjoy.

So that is why New Zealanders are coming home, because they know that, actually, it is better here than in many other countries in the world. We had 2.3 percent economic growth in 2015—much higher than most others that the Opposition likes to compare New Zealand with—with forecasts from Treasury of growth rates of 3 percent for 2016-17. The manufacturing sector has notched up 41 straight months of expansion and services, which at 70 percent of our economy, have been growing at the fastest level in the last 7 years. Indeed, our unemployment rate has just dropped to 5.3 percent. One hundred and forty-eight thousand additional jobs are expected over the next 3 years. Mrs King, that is why New Zealanders are coming home; not because everywhere else is worse than New Zealand but because New Zealanders are working hard, the economy is growing up and down the country, and there are opportunities for them and their families back here—that is, jobs.

Let us dig down into this a bit further. Tourism directly contributes $10.6 billion to the economy. Beef exports topped $3.3 billion—up a third in the last year. International education, another export—$2.8 billion—is supporting more than 30,000 Kiwi jobs. Wine exports—the wine industry has just had its best year ever with $1.5 billion worth of sales, which are predominantly exports, and 14 percent growth on last year. The ICT sector is, actually, a growing sector—one of the fast growing parts of our economy. It is still modest, but has had 9 percent growth since 2008. The kiwifruit sector in my area is having the best year it has had for a long time, through the hard work of kiwifruit growers.

So there is good news in all of this, and that good news is the Trans-Pacific Partnership (TPP), because in all of those areas I spoke about, there is greater access, greater liberalisation, and better access to 800 million consumers in 12 countries, who spend $28 trillion every year. It will be worth $2.7 billion extra to our economy by 2030. This is absolutely about good access to countries that a previous Government—a Labour Government—said it wanted free-trade agreements with.

And here is the final bit of it: Andrew Little knows that he got it wrong when he said to New Zealanders that he would oppose the TPP. That is why we have heard nothing from Labour on this for more than a month, and we will hear nothing more, except at the end of the year when it comes time to vote against hard-working New Zealanders having access to 800 million consumers who spend $28 trillion every year. Mrs King, as with your last Government, Helen Clark was always right.

CLAYTON MITCHELL (NZ First): I rise to take a call for New Zealand First in the general debate today. I have to say, I have never seen as much animation or excitement from the Hon Simon Bridges as I did with his contribution today. In fact, at one point he got so excited he almost launched himself across the lectern, and I actually think he touched a little bit of cloth, because he very quickly stood bolt upright and his cheeks were closed tight and his eyes were wide open, and the reality was he tempered himself down. But we know, and New Zealanders know, that he must be taking his stupid pills, because there is nothing in anything that we have heard from the Minister of Transport that has an integrated transport policy that includes rail. We have to take New Zealand seriously and involve rail into our discussions. I am not here in the general debate to have a complete smack at Mr Bridges, but he does make it very easy, I have to say.

Today we are on the precipice of change. Come Monday, 4 April we are heading into new, uncharted territory with the legislation arising from the Health and Safety Reform Bill coming in. There is a lot of fear, and a lot of that fear is driven by uncertainty of what is going to take place come 4 April. We had questions—patsy questions, all of them patsies—with Mr Woodhouse today in the House to try to bat away some of those concerns. The reality is that there are some serious concerns, but the Minister for Workplace Relations and Safety and this Government need to take ownership and responsibility for some of those concerns, because the reality of it is that we are coming so close to this new legislation and very little has been done to appease and ease the minds of the rank and file of New Zealanders. And there is no guarantee that this Minister can give the people of New Zealand that there are not going to be some serious changes when it comes to people being pulled before the courts and having some hefty fines put upon them. Case law will determine the way of this new legislation arising from the Health and Safety Reform Bill when it goes into action on 1 April.

Also, the reality is that only 5 weeks ago—5 weeks ago—the Minister released the regulations to actually encompass this legislation that is coming into the days and the lives of all New Zealanders who are going to be affected by it. Five weeks for the regulations to come in is just not good enough, and this Government is flying by the seat of its pants trying to push something down the throats of New Zealanders without giving them real time to engage and to get to appease themselves and settle into what is going on. On 18 and 25 February the 33 regulations were put through, giving New Zealanders only 5 weeks to adjust and get themselves ready. I think this is an embarrassment to this Government.

But, let us be honest, it is used to being embarrassed in recent times—you only need to look at the flag referendum. That was a bit of a Watership Down, a little bit of egg on the face—a little bit of Cadbury Creme Egg down the side of your cheek there—and, of course, we have had the Northland by-election. But get used to it: there are going to be plenty more embarrassments coming your way, as New Zealanders know the real truth behind this Government, which is not actually standing up for the best interests of New Zealanders. You are looking after your corporate buddies, your foreign nationals, and all those people coming in and making it harder for New Zealanders to own their own homes. The list goes on; I could spend hours just talking about that—how is my time looking, Mr Speaker? You are looking at me like my time is up, but I am still going.

Mr SPEAKER: You have got a minute and a half.

CLAYTON MITCHELL: Communication is the key with the new Health and Safety Reform Bill, and we have got to see more from this Government to appease the minds. Perception is reality, because, unfortunately, we have got school principals who are stopping children from climbing their trees because their perception of this bill is that that is what they have to be fearful of. What we could actually look at are the unintended consequences of the Health and Safety Reform Bill, and one of those unintended consequences is those not-for-profit organisations that are seeing their qualified and valued board members stepping down. You only have to look at Peter Jackson, for example, who stepped off his Weta Workshop board. There is not a more qualified person to be taking a position, and he is stepping down out of fear of the legislation arising from the Health and Safety Reform Bill—and his fear is a reality. There are organisations throughout our country—in fact, most councils have council-controlled organisations, which are boards put together by councils. They get seconded on there, they get paid a small honorarium—they are stepping down from those positions because they are up for huge amounts of penalties if there is a serious accident, a breach, or a death under their charge.

We needed to cut out clause 29AA—that was an amendment New Zealand First put through right back when we were debating this, to actually indemnify people in certain positions to stop things of this insidious nature happening the future. In saying that, I think health and safety is something we need to make a priority, but this Government has not done a great job of integrating it into the rest of New Zealand. Thank you.

Hon MAURICE WILLIAMSON (National—Pakuranga): I want to just explore a little political axiom with the House today, and it is literally about how the public vote. I think that the New Zealand public are to be congratulated, because they vote on the things that matter, and they decide when it is time for a change.

Let me just give you a little example of a simple indicator that almost sort of passed me by for many years. I stopped at the Ōhākea weigh station once when I was transport Minister, and one of the policemen there said: “I don’t know why you pay all those officials at Treasury to measure the GDP.” I said “Why is that?”, and he said: “Come inside.” I went inside, and he had a big piece of tracing paper. On the plane was the amount of tonnage of trucks that passed through the weigh station by the day, and he put the tracing paper on top it, which was the New Zealand GDP, and it was an exact copy. He said: “I can tell you every day that I work here whether the economy is going good, or sluggish, or dropping, and I’ll know that the grocery store down the road will be getting fewer people buying stuff, and so on.” It is that simple. It is that simple. He said: “You just need my piece of tracing paper, and I could phone you every day with the latest value of the New Zealand GDP.”—and he was right.

Why I brought that up is because the voting public is like that as well. They vote on one major thing. If they had 487 votes when they went into a polling booth, they would say “I like National on this, I think the Greens have got a better idea on that, and I think something or other.”, or whatever. But they get only one vote, and so they have to accumulate all of their views about the nation into that one party vote as to who is best to run the place. While the economy is actually functioning well, they will stick with the tried and true, always. I know.

I have been in an Opposition party on a number of occasions trying to ping the Government off, and you cannot do it while the economy is running smoothly and while it is going well. But the moment it turns to custard and the public think it is your fault—because they do give you excuses. They do allow a global financial crisis to impact, as has happened. They do allow the biggest sort of disaster, in terms of the Canterbury earthquakes, to at least affect whether the economy is going smoothly. But in general, right now, the public are showing, through polling after polling—and I do not care whether you go with Colmar Brunton or any of the other polls you want to look at. It is quite clear from that view that the public are comfortable with the economic management of this country.

All the issues that flow on from that—like whether my kids are getting a good education or whether my job is secure or whether my interest rates may go up—are all secondary to whether the place is being managed well economically. I would say that the message to the Opposition is that the one thing you have got to stop doing, because it is not going help you, is having a double standard—a double standard like attacking us for allowing foreigners to buy land when, in fact, foreigners bought twice as much land when those members were in Government.

Hon David Parker: They’re talking about forestry.

Hon MAURICE WILLIAMSON: That can only—I am not allowed the “h” word, so I can only use the “double standard” word, but those members sold twice as much land to foreigners as we did, and when they go on TV saying that it is evil, that has no credibility whatsoever.

When Labour members get up and say that it is wrong to be selling State assets, as they did when they opposed our mixed-ownership model, the public just said: “But didn’t they sell more of our assets than you’ve ever sold?”. I mean, we were babes in the woods compared with what Labour sold. So it is that double standard, which will not win you a single vote—

Hon Annette King: You’d know about that.

Hon MAURICE WILLIAMSON: —“Mr and Mrs Labour”. It will not win you a single vote while you know that you did it, and, in fact, you did it on steroids. Those members know, and they did it on steroids.

Similarly, with the flag referendum, what I think will not give Labour members a single jot in the polls is that they actually had a policy of holding a referendum to see whether we would change our flag, and as soon as they realised they could maybe get a bit of political influence to try to smack at the PM, they said: “Oh, it’s all wrong and it’s all evil and it’s all disgusting and it’s all disgraceful.” But the public do not see it like that. The public say “Well, hang on. Hang on, isn’t this, again, one of the double standards?”—and I have got a list of the double standards. I am not going to get anywhere near enough time but, I tell you what, you could go for 3 hours on things that Labour did when it was in Government.

Labour said—oh, look, there is a better one. Let us go with trade. Trade is one on my list, but I have got only a short time. Labour members negotiated some fantastic trade agreements—well done; good on them—and now, when we get the opportunity to bring 11 other countries into the Trans-Pacific Partnership, because those members are so scared of their politics, they go against it. Well, they are wrong. They are totally wrong. The Trans-Pacific Partnership is one of the best things that has ever happened to this country.

JAN LOGIE (Green): Before the 1980s our country’s great achievement, which we were known all around the world for, was having a pretty level playing field, at least for Pākehā men. Since then we have seen greater recognition for women and Māori, amongst others. Of course it was not perfect back then, but successive Governments of both colours recognised the importance of ensuring families had enough to sustain themselves and a warm, dry home to live in. The goal was for everyone to have enough to be able to participate in society, because that was fair and right and because we wanted to ensure that we could get the best out of everyone for our society. We were known for this all around the world, and we were just a little smug about it.

But Government policies since the 1980s have created huge income and wealth imbalances that have harmed us all. Governments through the 1980s and 1990s removed the ability for working families to negotiate decent pay and hours, they cut the family benefit and made it harder to buy a house, and, of course, famously, Ruth Richardson set benefits levels below the poverty line. Then they said that struggling people were the problem.

This week the Government is, of course, proudly promoting the fact that it is giving some beneficiaries a few extra dollars, albeit with lots of strings attached, but it is not mentioning the fact that the ministry advice told it that this is not enough to get any of those families out of poverty. So what the Government is really announcing to the country is its decision to continue to keep these families in poverty. These are families where parents are unable to work while they rebuild themselves after leaving violent relationships, or provide for the physical and emotional needs of their children, who may have disabilities, or manage their own fragile mental health, while doing their best to care for their children. The Government has decided that these families do not deserve enough money to do those important jobs and pay all their bills and have opportunities in life.

Of course the Government has also failed to acknowledge the fact that it is taking this money from other struggling families. The Government is helping to fund this small conditional increase, which will not bring anyone out of poverty, by cutting the value of Working for Families and the accommodation supplement. These supports were introduced to try to keep people off the street and out of poverty. Eroding the value of these benefits means more families will now struggle to pay their bills, enjoy life, and contribute to our communities. It does not make sense to erode these supports, when rents are going up out of kilter with wages. Families are doing their best in increasingly tough circumstances, and the Government needs to stop making it harder.

The Green Party believes that we are in this society together, and our benefit will be better off if we fix the wealth and income imbalances. Although National Party members may groan at that idea, if we were in power we would improve the ability of people to negotiate decent pay and hours, crack down on corporate tax avoidance, introduce a capital gains tax, and put a price on carbon, so that we could ensure all of our families have enough to sustain themselves, while we protect our environment. We can rebalance our policies to ensure the dignity of every New Zealander. These are fundamental goals that are achievable.

SARAH DOWIE (National—Invercargill): All I can say about that contribution is that it was a lullaby and a diatribe. This is a land of opportunity. New Zealand is a land of opportunity, and I am very, very proud of this country and I am very, very proud of what this Government is delivering. We are delivering a framework that is creating a stronger economy and, through that, jobs, and that is where people gain opportunities. They gain opportunities through work, through being productive members of society, and through putting more money in the pockets of their families, which means that they can achieve their hopes and dreams. New Zealand is a land of opportunity.

Let us contrast this side of the House with the Opposition, on the other side of the House. Like I say, we are delivering results. We are delivering a framework that means our businesses have confidence to invest another dollar, to hire another person, and, again, to put money in their back pockets and achieve their hopes and dreams. What is the Opposition doing? Well, Opposition members are having a talkfest. They are talking about what work looks like. They are talking, they are yapping, but are they delivering? No. We are the ones who are delivering.

Let us talk about that delivery. What is happening is while they are pontificating about what work looks like, we have one of the highest labour participation rates ever in this country, at 69 percent. And what about Southland? Let me tell you. We roll up our sleeves and we are very, very hard workers. We are at 74 percent. Did you get that, Mr Hudson? Southland is at a 74 percent labour participation rate. We are the envy of the OECD. We have an unemployment rate of 5.3 percent, and in Southland, what is it? It is 4.1 percent. And why is that—why is that? It is because this Government has a framework to diversify our economy and to diversify our markets.

I am ashamed—I tell you, when I am out, talking to my dairy farmers and my beef farmers and my manufacturers, they are concerned that the Labour Party would be turning its back on 30 years of supporting free trade. That is disgraceful, and they are worried.

My people in Southland are export-driven. They are export-driven and they know that we need to open up new markets. We are treating people as New Zealanders to trade with, breaking down the tariffs, breaking down the barriers, and creating more opportunities so they can invest in their business and take on more people in respect of jobs. The Trans-Pacific Partnership? Well, they are thrilled, actually, to have that across the line. My beef farmers are absolutely thrilled to know that they will be trading with 11 other countries around the Pacific Rim. They are jumping for joy.

New Zealand First has the audacity to say that it is there for the regions. Well, I kid you not, they certainly do not believe that in Southland. We are pragmatic people, and we believe in free trade.

In respect of Southland, talking about dairy—yes, dairy—our dairy farmers are hurting at the moment, and my sympathies are with them. But we are more than a one-trick pony. We are a diversified economy, and we are providing a framework that allows people to take chances, to start up businesses, and to grow into other sectors.

Let us take a look at tourism in Southland—30,000 people visited Stewart Island, a fledgling tourism site that is steeped in absolutely wonderful nature. We have got our Minister of Conservation sitting right here. The work that she is doing with the kākāpō, with the natural beauty, with the geckos, and with the wonderful things that are going on down in Rakiura—people want to see our nature. They want to enjoy it, and they are paying good money to do it. How many jobs have spun off from that? A whole economy is supporting Stewart Island.

What about aquaculture? We have aquaculture as well. Aquaculture is growing, and it is an opportunity down in Southland. With regard to our Sanford operation, that is producing 20 percent of New Zealand’s national salmon production. It employs 20 staff on Stewart Island and another 80 in Bluff. That is traditionally red territory that I won back—80 in Bluff. Why are we winning that back? Why are we winning? Because we are supporting families.

I support families. I support growth. I support putting wealth in their pockets, and that is through jobs. Thank you.

JENNY SALESA (Labour—Manukau East): This last week has been a week of contrasts, of highs and lows. Just before Easter, we saw the lowest low, when the results of the Prime Minister’s vanity project came in, in terms of the flag referendum, with an expensive whimper. Over $26 million has been wasted on a flawed process to change our flag. But New Zealanders have spoken. They have spoken, loud and clear: we are keeping our current flag. Only six out of 71 electorates voted for a change in flag. The Prime Minister could not even convince his own electorate of Helensville to change the flag. At Helensville 56.6 percent voted to keep the current flag and only 43.3 percent voted for a change of flag, which is quite ironic. It is ironic because that is exactly how the rest of New Zealand actually voted.

This Government has spent so many millions just to keep our current flag. But there are so many other issues, so many other issues, that should be of priority. For instance, let me give you a few examples. Addressing child poverty—we have over 300 kids in Aotearoa New Zealand who are living in poverty. Addressing homelessness—ensuring that people, including children, have a roof over their heads. That is another issue that could be of priority. Investing in our hospitals is another issue. Ensuring that those with melanoma cancer have access to first-line treatment and, at the same time, saving hundreds of lives—I would have thought that saving lives should be a priority. It would definitely be a priority when this side of the House gets into Government—let me assure you.

Another priority—fixing up and maintaining our State houses so that they are warm, dry, and healthy and so that they stop contributing to children dying. The young toddler in my electorate of Ōtara, in Manukau East, Emma-Lita Bourne, died because she lived in a State house in conditions that were so bad that the coroner said—[Interruption] Honourable Minister, the coroner said that the condition of the house that she lived in contributed to her death. Instead of continuing to waste millions of dollars on things like the flag referendum, this Government needs to get back to focusing on real issues—issues that affect people’s lives on a daily basis. As my colleague Jacinda Ardern spoke about earlier, let us focus on the things that matter.

While this wasteful flag process has been under way, Labour on the other hand has been working hard to build a national conversation about the future of work. We have been engaging experts, business leaders, economists, and workers alike to help define pathways into the future that will offer opportunity, a fruitful life, and a shot at the Kiwi Dream for all New Zealanders not just the privileged few—and it has not cost us that much money. We have convened lots of consultations across New Zealand over the last year and a half and the results have been that we have developed 10 big ideas. That has given us a snapshot of the kinds of ideas from the ground up that would help us with our policy development.

OECD countries are looking at the future of work. We are not the only party that is looking at the future of work and, instead of burying our heads in the sand like the current Government is doing, we are actually looking and addressing and talking to people and asking them how we address this. When the New Zealand of Economic Research comes up and gives us a report that states that 46 percent of our current jobs in New Zealand are not going to be around in the next 10 to 20 years we do not bury our heads in the sand. As the party of big ideas we try to develop policy ideas to address those head-on—the future of work. Thank you.

BRETT HUDSON (National): New Zealand is in great shape. We are making huge strides building a stronger, more resilient, more prosperous society—one where Kiwis can enjoy the lifestyles they want and have good incomes. It is a society, a country, that compares well against the rest of the world.

Let us look at our economic performance. Sustained growth over the last year was 2.3 percent last year and forecast to average 3 percent or more over the next 2 years. What does that mean for Kiwis? Well, that gives businesses the confidence, as my colleague Ms Dowie pointed out, to spend another dollar, to employ another person. It sees wages rise; it sees more jobs created. Let us look at that.

Over the last year, wages on average rose 3.1 percent—far greater than the rate of inflation. New Zealanders are better off, better off in work. Over the last 3 years 175,000 jobs were created and there is still good news because over the next 3 years a further 148,000 jobs are expected. This is extremely important across New Zealand and no less so in my electorate of Ōhāriu. In Ōhāriu we have the highest proportion across New Zealand of people in the labour force. There are 72.3 percent in the labour force—the highest proportion in Ōhāriu out of any other electorate across New Zealand.

We also have the greatest proportion on wages and salaries: 56.6 percent. Those are the people who are directly impacted by the work this Government does to create opportunities for business, which leads to more jobs and leads to higher wages. New Zealand is benefiting from the work this Government has been doing, and Ōhāriu is particularly benefiting and is particularly looking forward to this work continuing.

So let us look at what a Government does to support these strides in the economy that we want to see. Well, in the Government we call it the Business Growth Agenda. You invest in opening new markets for your exporters, you free up channels for investment, you invest in infrastructure that will enable businesses to be more productive, you harness your natural resources better, and you invest in the skills and safe workforce that you need to deliver all that. We call that the Business Growth Agenda and it crystallises perfectly in things such as free-trade agreements.

We have acknowledged that the previous Labour Government did a very good job in creating the China free-trade agreement—an agreement that this Government has leveraged to the hilt to grow into an enormous trading partner and regime. Along with the China free-trade agreement we signed the free-trade agreement with South Korea and most recently signed up to the Trans-Pacific Partnership, a free-trade agreement with 11 other nations that have almost 37 percent of the global GDP. In dollar terms that is about $27 trillion a year, and 800 million customers for New Zealand’s goods and services. This is a boon for all New Zealanders—for workers as well as businesses. This is the opportunity, as I said, for our businesses to grow further, to want to invest in greater production, to hire more people, and to see wages rise.

Along with opening up our export markets we have been making enormous investments in productive infrastructure. Ultra-fast broadband and the rural broadband initiatives—there is now over $2 billion invested by this Government in connecting Kiwis with the world. What do we see there? Well, we see New Zealand businesses able to harness that, to be more productive. There is the general practitioner up in Whangarei who is able to do retinal eye scans in his clinic and send the information off to the local district health board to be processed, saving him and his patients a great deal of time. Or there are the panel beaters on the North Shore who are able to take photographs and video of damage and send that off to assessors, having claims approved much more readily. There is over $2 billion invested in connecting New Zealand businesses and Kiwis to the world.

We are doing the same thing in roading. With our roads of national significance, along with some regional roading initiatives, we are unlocking productivity. We are helping Kiwis get to work. We are helping goods get to market more cost efficiently and much quicker, supporting our export businesses, supporting Kiwi businesses, supporting Kiwi workers. This is a Government that is working for New Zealand.

The debate having concluded, the motion lapsed.

Bills

New Zealand Business Number Bill

In Committee

TIM MACINDOE (Senior Whip—National): With the agreement of the Opposition whips, I move that the parts of the New Zealand Business Number Bill be considered as one debate, with the questions to be voted upon separately at its conclusion.

The CHAIRPERSON (Lindsay Tisch): You have to seek leave, not move a motion.

TIM MACINDOE: I beg your pardon. I seek leave for that course of action.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that course of action. Is there any objection? There is no objection.

Parts 1 and 2, schedules, clauses 1 and 2

Dr DAVID CLARK (Labour—Dunedin North): We on this side of the Chamber, in the Labour Party, intend to support the New Zealand Business Number Bill, but we have had reservations about the bill right throughout the process because, as was stated from the outset by the chartered accountants, there is a very real risk that the New Zealand Business Number becomes just another number and that this bill implements exactly the opposite of what is intended.

The intention, of course, is good. We believe in making interaction with Government as simple as possible for businesses, so that businesses can get on with doing what they do best: producing goods and services and, hopefully, exporting some of them for the wealth and prosperity of our country. So we support the intention of this bill. We want to be able to (a) enable businesses in New Zealand to interact more easily with Government, which is the stated purpose in the bill, and (b) reduce the cost of business transactions in New Zealand.

We want to support those intentions, those purposes, in the bill. However, our concern from the start has been that the Government has no clear plan as to how this is to happen, because it is asking only a few agencies to take this course of action. It is asking only a few Government agencies to step up and use the New Zealand Business Number as their primary number for contact with Government.

We on this side of the Chamber want to move an amendment. In fact Ria Bond, my colleague in New Zealand First, is going to move an amendment to the bill that would force the Government to use this business number, thereby achieving the purposes of the bill. Ironically, it takes the Opposition to suggest a course of action that actually achieves the purposes of the bill. But there we are—that is the Parliament we are with currently.

I intend to move an amendment to Ria Bond’s amendment—believe it or not; an amendment to an amendment—that will ensure that it is done in a time frame that is reasonable, so that over 2 years the Government has time to implement the purposes of this bill so that businesses can then have one number to deal with when they are dealing with Government. Those 2 years will give the Government sufficient time to pass any Budget measures required to enable departments to meet that challenge.

The Government tells us there will not be a great deal of cost, so I do not imagine that it will be a big deal, but we have learnt not to trust entirely what the Government says when it comes to IT programmes—we have seen what has happened at the Inland Revenue Department with child support legislation revisiting this House several times, and we have seen what has happened with privacy matters at several departments under this Government’s watch. So we will give them time to sort out their own affairs so that they come back to this House—sort out any budgetary matters and switches that need to happen, so that they can implement this bill and achieve the very purposes that are specified in the bill. That is, a single point of contact for all businesses with the New Zealand Government, in terms of having just one number—one number—that they need to use to interact with Government.

I expect this particular amendment that is being proposed, and with my modification, would also be supported by Federated Farmers, which in their initial submission made it very clear that they would like to see this expanded. They think that the initial list of Government departments, not including places like WorkSafe New Zealand or Immigration New Zealand, will hamper their efforts in dealing with the Government and therefore creating another number just creates more work for Federated Farmers members. I share Federated Farmers’ concern and I trust that they will be supportive of this amendment because it achieves the purpose that they have asked to have achieved in this bill.

Likewise, Chartered Accountants Australia and New Zealand had a concern that this number that is being created “just becomes another number”, to quote them—just becomes another number—“rather than a replacement for the many current identifiers as is intended.” So I expect that, were it here, Chartered Accountants would support the amendment that is proposed, because it ensures that the bill’s purpose is achieved.

The Government in select committee looked very flat-footed when it was questioned as to why it would not happen quicker—as to where the plan was for this to be implemented. It had no clear answers as to how it would be ensured that this was not just another number for an indefinite period. There was no forthcoming explanation as to when and where the number would be universally adopted in Government.

This amendment that I am moving affects clause 28. Ria Bond’s Supplementary Order Paper says that “Government agencies must use NZBN”—that is the heading—“A Government agency must use the NZBN of an entity (including using it in addition to, or substitution for, any other identifier the Government agency may use for that agency) if that use is in accordance with the purposes of this Act.” My amendment to her amendment simply slots in after the words “a Government agency must” the words “within 2 years of the Act coming into force”. It gives the Government time to order its affairs, to make sure this change happens without the kind of embarrassment it had to face in respect of child support legislation where it had to come back to Parliament to change the very Acts it put through Parliament, because it was not able to deliver on them. So this gives the Government time to get its affairs in order; it gives the Government time to achieve the very purpose that it has set out in this bill, and to make sure that businesses are not hampered by yet another number when dealing with Government.

This slow implementation that will otherwise happen will incur additional cost for businesses, because we already know—and it is their very argument behind this bill—that too many numbers has an additional cost and an additional compliance component as businesses wrestle with the different parts of Government and the different numbers that are required, and so on. It also avoids the double jeopardy and the potential conundrum that arises if agencies wait for all businesses to adopt the number: if everyone adopts a wait-and-see approach—“Government doesn’t seem to be adopting it fast; we won’t adopt it fast”—and that kind of slow progress where the number falls by the wayside because Government agencies are not implementing it and people are not using it.

This is a very sensible amendment. I commend Ria Bond for putting it forward, and I will take some credit for ensuring that it does have the right time frame around it. Far be it for me to be a wallflower in this debate—but it is an important amendment and it does make sure that the bill achieves its own purpose. How ironic it is that the Government could be putting forward a bill that actually achieves the opposite of its own stated purpose; how ironic that we could be spending taxpayer money in the hundreds and thousands to put this bill through the House, with all of the parliamentary staff and all the MPs, and the costs attached to that, just so that the Government could achieve the opposite of what is laid down.

I look forward to the Government supporting Ria Bond’s amendment, with my amendment to it, because it is a sensible way forward. It ensures that the bill really does achieve what it sets out to achieve in making one point of contact—one number—for businesses to use when they interact with Government. It will reduce compliance costs. I expect it will keep Federated Farmers and Chartered Accountants happy in their requests, and rightly so. It is a very sensible thing to do: to reduce compliance costs, to support businesses to have more time to get on with the good things that they do to make our economy more prosperous.

So as I said from the outset we will support the bill and we trust that the Government will see sense and actually seek to implement the very bill and its purposes, as stated in its own propaganda.

BRETT HUDSON (National): Seeing as we are talking on the purposes and the intentions of this bill, I will just respond to Dr Clark’s contribution because I think it highlights a couple of very important pieces. One is, firstly, that both his amendment to the amendment and Miss Bond’s amendment highlight the fact that they do not actually understand the technology systems that are going to have to be upgraded and changed to actually give effect to a New Zealand Business Number. The other thing is that by trying to do it within 2 years, what he is saying is simply that the Government should be throwing money across every Government agency, in a really, really short period of time, to do something.

One of the things the New Zealand Government has done an excellent job of is delivering better public services, for the same or less public expenditure. What Labour is showing, just as it did with its ridiculous plan for a universal basic income, is just to say “Let’s spray money we don’t have at a perceived problem”, in the idea that you can just fire-hose it down and create a new outcome. Well, it simply will not work for them. So what Labour is saying is: “We’ll just throw a whole lot of money we don’t have to get agencies to derail their current IT programmes of work and to focus on this one thing right now, to do this tomorrow.” Whereas what a sensible approach would say is that we have a lot of Government agencies, and in order to interface with a single New Zealand Business Number system or an interface they are going to have to make changes to their applications—not one but probably several, and in some cases many—to be able to pass that information backward and forward and to be able to exchange it in a way that, as the member says, will actually work.

They can do all that now, instead of other work that is already on their IT programme, or they can do what a sensible business would do, which is they would actually integrate it as part of their programme of change. You see, businesses, including Government agencies, are not static things, particularly their technology systems. They do not just stay at one place, in one shape, for all time. They have change programmes already. Dr Clark just says they should completely derail them and move on to something new. It is, quite frankly, a ridiculous proposition and just shows the Labour Opposition is still not fit to govern.

The other point that Labour has made quite incessantly through the readings and the select committee deliberations on this bill is, why do we not just pick one number that an agency already uses. Anyone who perhaps has any experience of an IT system or two would realise that if they were to do that—and they could pick any particular agency’s identifier—because you are looking at an identifier to be used by all agencies, it would constrain what that one agency could do with what was originally its identifier; for instance, the Inland Revenue Department (IRD) with the use of the IRD number.

It is an utterance, an idea, that comes from a party that has no fundamental understanding of technology. It is a ridiculous proposition, and one that would derail perhaps the IRD’s business operations and its own transformation project, all to try to deliver something that is not actually necessary.

You see, one of the great things about technology in the last 25 years is a thing called integration and interoperability—the idea that systems and applications can message between each other, that they can communicate messages, actions, and information between each other. You do not need to change every one of them to be some homogenous, identical thing.

It is a smart IT project to create this unique New Zealand Business Number in a separate central repository and interface those other systems to it. To somehow break that by using one feature of one of those agencies’ systems and then make all of the others fit into that is simply 30-year-old-technology thinking.

If we really want to defeat the purpose of this bill, if we really want to make it less efficient for businesses or agencies to interact with each other, we would support the Opposition members’ amendments. But nothing could be worse for this bill than to follow the amendments that Ms Bond and Dr Clark have tried to put into the House. Thank you.

RIA BOND (NZ First): I just want to remind the member, Brett Hudson, that when the New Zealand Business Number Bill was originally written it actually had it in there that it was mandatory for all Government agencies to belong to and to uptake the New Zealand Business Number legislation. It was written that way, but it was actually removed from the bill recently, so what you have said just now is absolutely not right at all.

I want to say that it has been no secret that New Zealand First has supported the intent of this bill and what the purpose of this bill will actually achieve, but what we had issues with were areas of the bill that identified risk with privacy for businesses. It also identified the fact that not all Government agencies have come along and collectively agreed to be on the uptake of the New Zealand Business Number legislation. So I am actually really happy after looking through the bill, reading through areas, and trying to ensure that when we in this House set legislation we are mindful and make sure that we are not going to be here in a year’s time amending this bill again. My gut instinct is, because of the good intent of the bill, let us get it right. Let us get it right. Let us actually make the provisions for all Government agencies to have a time frame to bring their IT systems up to date.

I have spoken to IT specialists and they have said that some of the error was mostly because of the limited time, 28 days after the Royal assent. It did not give them enough time, so I am offering an olive branch with my amendment. I am offering that the word in clause 28, Part 2, change from being “may” to “must”, as it was originally in the bill. As Dr David Clark has indicated, this amendment is common sense. It says that we believe in your bill but let us take it from being a voluntary involvement, which is absolutely pointless, it would make this whole bill and the purpose redundant if that was the case. We are asking for the Government to show some support for its own bill and change the word from “may” to “must”. That is all I have asked for. I am not asking for the world. What I am saying is that we believe in the intent of your bill. Let us look at the amendment that I have put forward, which makes sense, and let us make the right choice so that we are not back here in 12 months’ time making an amendment to this bill.

I want to add, also, the fact that the Chartered Accountants Australia and New Zealand were really quite disappointed that this mandate, under section 34 in the bill as previously written, was removed. Their big concern, like Dr Clark and like we had indicated in the first and second readings, was the fact that this bill would run the risk of being another overhead to businesses, and of not being fit for purpose—for the intent—because it had only a very small buy-in by Government agencies. In a responsible working world, and even here in the House, I and New Zealand First would like to think that when a good amendment comes along and actually helps endorse all Government agencies picking this up, the Government would support that. I thank the Labour Party for supporting my amendment, and Dr David Clark for doing an amendment on my amendment, and I am looking forward to the Green Party supporting my amendment, as well.

I want to say that the intent is to cut the red tape, it is to help small businesses, medium businesses, and also those sole traders cut back on their administration time. Productivity in small businesses and as a sole trader could only increase if this bill was to be passed in the House. Sole traders do not have time to sit on the telephone to do an address change with the Inland Revenue Department and wait on that telephone call for 10 minutes. If it is a salon working environment and you have got to quickly do that, and you know you have got to do that, the worst thing is that when you are doing a chemical service—there is a time frame within which you have got to take that chemical off. If you are waiting on the telephone and you have got to ring all the different Government agencies to change some details, it is not good productivity, and it is also a workplace health and safety issue.

So the easiest way to explain this bill is with the fact that companies have been allocated the number since 2013, and this bill seeks to also encompass small businesses, medium businesses, and sole traders so that the achievement of cutting red tape, of actually increasing business productivity, is consistent across all sectors. I do believe that with my amendment we can achieve that. This is the one fish-hook that we are saying we would oppose this bill on. So in order to support the bill we would call for the Government to support the amendment, as well. Thank you.

JACINDA ARDERN (Labour): I want to stand and support the statements that have been made by the member Ria Bond, and also by David Clark. If I were to summarise the amendment that Ria Bond has put before this House, for the benefit of Mr Hudson, it basically says to back yourself—back yourself. To have Mr Hudson actually stand up and say that putting a time line or a requirement on Government agencies to actually implement the purpose of this bill would ruin the bill shows to me what an absolutely shambolic process this has been—absolutely shambolic.

Brett Hudson: If you listened, maybe you would comprehend, Jacinda.

JACINDA ARDERN: Unfortunately, I did listen, Mr Hudson, and that was my take-home point: back yourself. If you believe that this bill can deliver for business in the way that you have described, and, in fact, if you read the background papers to this bill, as I have—the Cabinet papers, the committee papers, the regulatory impact statements—they clearly set out that this bill will be useful to business only if the widest possible range of Government agencies adopt the purpose of this bill, adopt the whole Business Number regime. So unless the Government is willing to say that there are some requirements for those agencies to pick up the Business Number, then it will not achieve its purpose clause. It will not achieve the purpose as set out at the beginning of the bill.

I want to reflect, though, on the real reason, Mr Hudson—it is not necessarily because of the argument that you seem to put across that in putting a time line we suddenly do not understand technology on this side of the House. I find it quite laughable to be lectured on that by a Government that, only in recent times, basically lost $7 million in the Ministry of Justice by the failed eBench project alone. That is before you start on Novopay and every other failed technological project that this Government has tried to implement.

Putting that aside, the most telling paper that I would recommend that Mr Hudson read is the paper to the Cabinet economic growth and infrastructure committee from March 2015. It sets out the real reason there is reluctance on that side of the House to put forward a date for implementation. Treasury has called this policy high risk because of concerns around Government agencies implementing this proposal. It also sets out just the level of compulsion that the Government is trying to put behind these agencies in order to get the Business Number rolling.

It talks about the Government directions. It says “The Government has previously stated that the main goal of the NZBN is to replace, over time, many of the separate identifiers currently used by businesses … However, no comprehensive statement has been made stating when or how this goal will be achieved.” It set that out as being problematic in the Cabinet paper. “Consequently, many Government agencies are unsure about what they need to do to meet the Government’s expectations …” We are setting out a path forward on that one with this amendment, or how to plan and how to meet those expectations.

It goes on. It says: “We consider the most appropriate vehicle is to issue two directions, one to government departments under cover of a Cabinet Office Circular, the other under … the Crown Entities Act”. What would those directions set out? They would set out the range of agencies to which the direction applies. They would set out a high-level description of what agencies need to do to achieve the goals and milestones in the implementation plan. What better place for it than in the bill itself? There would be a requirement on agencies to report on progress annually. There would be a centralised system for monitoring agencies’ reports, including reporting to Ministers on progress. The Cabinet paper also states: “Consideration would also need to be given to whether there should be a mechanism for resolving any disputes about whether a business identifier is within scope of the NZBN policy … because it is not always clear whether an identifier that is currently being used by an agency should be replaced by the NZBN …”.

What all of that tells us is that the Government knows that the success or failure of this policy relies on its implementation. It will be putting out directions to agencies to implement this policy itself. All I am hearing is that there is a lack of confidence from the Government that those agencies will be able to follow through. That is what we are hearing. It is absolutely clear in this Cabinet paper that implementation is reliant on that happening and, therefore, the only reason it is not in the bill is that there is fear they will not be able to deliver. Why else would you have to set up a dispute resolution mechanism for agencies that are going to push back that hard against a Government direction?

It also suggests to me a bit of a lack of confidence from those agencies as to whether or not they have got the capacity to deliver. Certainly, we have seen, I think, a number of disasters as agencies have tried to transition to new Government-imposed regimes. Perhaps there is a genuine fear amongst those agencies that in that transition they will be unable to deliver to their business clients. Perhaps that is one of the fears.

But I want to just reflect, again, on the purpose clause of the bill, set out in Part 1. The main purpose of the bill we are debating is set out very clearly in three parts. Clause 3, “Main purposes” states “The main purposes of this Act are to—(a) enable eligible entities in New Zealand to interact more easily with government;”—that is the goal. I highlight “government” there—that is a broad turn of phrase. It goes on: “and (ab) enable eligible entities in New Zealand to interact more easily with one another; and (b) reduce transaction costs in New Zealand;”. Then paragraph (c) is about the how. Those big, giant goals are all going to be achieved by establishing and maintaining the New Zealand Business Number Register.

That is a big goal. It is all linked into the Government’s desire under Better Public Services agenda result area 9—which I always think sounds like a bad sci-fi movie—which is to reduce the cost of dealing with the Government by 25 percent, which is a big goal. I can absolutely see why the Government sees that goal as hinging on the success or failure of the business number. I can see that, because it is all about transaction cost—transactions Government to Government. What I am concerned about is the degree to which business believes this is the most useful thing the Government could be doing.

I would like to ask the Minister in the chair, Minister Barry—it seems clear to me from some of the other Cabinet papers I have read that the Government has surveyed business in this regard, perhaps in 2013 when a piece of work called The Benefits of a New Zealand Business Number: the Opinions of New Zealand Businesses was conducted. I do not know whether the Commerce Committee was ever provided with that research, but excerpts seem to have made their way into the Cabinet paper, and they include statements like: “During public consultation in March this year on extending the NZBN to all businesses, larger businesses and industry representatives strongly supported extending the NZBN”.

So big business thinks “Good.”; smaller businesses were less enthusiastic. Smaller businesses were less enthusiastic. Why? What was it about the New Zealand Business Number that they had concerns about? Where is the discussion and dialogue about that? If we want to fulfil that big, bold purpose clause, we need to answer that question. All the Cabinet paper tells me is that this “likely reflects a lack of knowledge about the NZBN.”

So there is a bit of an arrogant view in there that they just cannot do it, and it continues in paragraph 24: “A small number of businesses and individuals commented. Some of these did not see any value in the NZBN.” Again, that is another statement that small businesses question the value of this $14 million project. Again, it is explained away by saying that a number of these small businesses appeared to be giving their initial reaction. I want to see more detail on why it was that small businesses had big question marks over this.

Look, you can theorise around why it could be potentially beneficial—big business sees the value of it. But why is it that those small businesses simply did not? What opportunity is potentially being missed here by there being a lack of transparency around that research, which I think could have really helped the consideration of the select committee and helped us, ultimately, make sure that this big, bold purpose clause is not hollow in its aims, and helped us make sure that the New Zealand Business Number is not just about one section of our business community but is genuinely something that proves useful for the majority of our businesses, which are, indeed, small to medium sized enterprises. I look forward to contributing to the debate on other parts of this bill.

SIMON O’CONNOR (National—Tāmaki): I want to take one quick issue with the member Jacinda Ardern, who was asking a whole series of questions as to why small businesses have issues. I would actually just encourage her to go out and talk to small businesses. It is one of those novel things that MPs can do—one of those really strange things, I have to say. I find it myself as I move through the electorate of Tāmaki, where there are a number of small businesses. From time to time people will ask questions and ask what it is about. The funny thing is that by having them ask a question and you feeding back, they are usually quite comfortable with it, because, as has been noted in the purpose of this bill, it is a chance for businesses to better engage with Government agencies, but it is important, too, for business to engage with each other.

I do not want to get too bogged down on where the primary discussions have gone. Most people have been focusing on clause 28 and referring to Ria Bond’s amendment. I think that has almost been done to death. I think that, fundamentally, we are not a Government that is about compelling Government agencies to act in a certain way in this particular circumstance. Importantly, when we start saying, as the amendment does, that all Government agencies must use the New Zealand Business Number, we are not talking simply about the likes of, say, the Ministry of Social Development or the police, we are talking about every school, we are talking about every State-owned enterprise, and so forth. That is becoming incredibly unwieldy and unnecessary. My colleague Brett Hudson earlier highlighted something, as well. There is a huge cost here if every Government agency, every school, and everything connected to the Government has to start overhauling its system for the sake of just—well, a desire of the Opposition to have it for the sake of it. The bill is very clear, and, again, as it has always been drafted—and I should point that out; it is as it has always been drafted—a Government agency may use it.

Look, where I want to focus, though, is really around the issue of privacy. It is about how we access the register. One thing that came up quite early from submitters was the question of how information was going to be protected and who was going to have access to that information. Importantly, first and foremost, the register is looked after by a registrar, who is going to be appointed through this bill and through, I think, the State Sector Act, so that is all pretty normal. That person—he or she—will have oversight, and, ultimately, the information within it is fairly limited.

In fact, if we turn to schedule 3—and I am sorry to indulge the Committee but I think it is quite important. Some people who came before the select committee or who were in conversations were very much concerned that huge amounts of information were going to be given out. What we are talking about is the legal entity’s name, any trading name—I mean, that is pretty normal, again. If people who have an interest in a small business would like to go out, often there is the use of a trading name—I thought I would just help out a member there—a registered address, and a location identifier. That is quite important to someone who has studied geographic information systems years ago. Actually, it is quite useful to have that for meshblocking, and so forth. There has to be a start date for that entity and it has to say what kind of entity it is. So we are talking about pretty basic information there.

The registrar has, obviously, enabled the person who provides that information to access it, to update it, and to make sure it is accurate. They are also allowing, where required, Government agencies to get hold of that information. I think it is really important in this case, because there is often some fear about what the Government does, and that a Government agency will actually—and the select committee spent a bit of time teasing this out. It can access that data, first and foremost, if another Act gives that Government agency the power to do so. OK? So a Government agency cannot access your business number simply because it wants to; it must not only want to but also be enabled and authorised by an existing Act.

There is, then, a secondary clause that allows that entity—that Government agency, if you will—to approach the registrar and explain its reasons. The entity itself—this is in clause 27(1A)(b), which says that “the NZBN entity has consented, in the manner determined by the Registrar, to the government agency accessing …” that data. Look, it is a small point but a really fundamental one that, again, limited information is being shared. A Government agency is able to access it if another Act already in force authorises that, and in other circumstances the entity must authorise it.

Importantly in all of this, the select committee heard from the Privacy Commissioner and from the Government Chief Privacy Officer. They submitted to the committee, that evidence was weighed up, and my understanding is that they are pleased with the provisions set out in that regard. Ultimately, this is a register. It has to have a degree—

FLETCHER TABUTEAU (NZ First): It is a pleasure to stand and take a call on the New Zealand Business Number Bill. I wanted to take this opportunity, basically, to respond to the contributions from the other side of the Chamber, which have been kind of marginal at best, to put it politely.

First, to address the resistance of the previous speaker, Simon O’Connor, to all Government agencies having to comply and use the business number: if he had read the amendment, it clearly says: “any other identifier the government agency may use for that entity) if that use is in accordance with the purposes of this Act.” Ria Bond wrote this amendment understanding that of course not all Government agencies are going to necessitate the need for the use of the business number—of course it does not make sense. If the member had taken the time to read the amendment, then we would not have wasted those minutes in the debate.

I think that after that contribution the previous speaker, from the other side of the Chamber, should stand up, stand against his party, and vote against this piece of legislation. That is how passionate he was about how pitiful, or how terrible, it is to ask Government agencies to actually have a time line and a budget to comply with the expectations set out in this legislation. I mean, he just could not believe that we would ask Government agencies to comply with those kinds of requirements. It is nonsensical.

What I wanted to touch on, because Minister Joyce, when we first addressed this in the House, spoke very eloquently about how this universal business number will—actually, he spoke about it adding to GDP. He said that it would be so monumental in its application that it would actually improve the economy. We are given numbers such as reduced costs of dealing with the Government by 25 percent. New Zealand First says that companies are now dealing with that. I think we have seen that companies that are obliged to work with the business number system at the moment are seeing some of those benefits. So they are saying: “Actually, we think New Zealand’s small and medium enterprises might benefit from this.”

But as the member Jacinda Ardern pointed out, actually, there is quite a bit of debate around that, and there is actually not a lot of engagement from the Government as to why this would benefit New Zealand businesses. New Zealand business at that smaller level, which you would think would benefit the most from not having to deal with all these Government organisations and that deal with this every day, actually cannot see the benefit of this legislation at face value. So where is the engagement? Where is the conversation? It just undermines what the Government is trying to achieve. I have to say that New Zealand First does support the intent. If it does make it easier for small to medium sized enterprises in New Zealand to engage with the Government so that they are spending less time on red tape, then we think that is a wonderful thing.

I just want to refer to some of the amendments, for example. In the original bill, as has been pointed out, the original obligation for Crown entities was that they “must”—they must—commit to this process. If they do not, it makes a farce of the entire piece of legislation. I put it to you that if it is not mandatory for Crown organisations to commit to this process, not only will the legislation fail and, therefore, undermine its intent but in fact it will be costly for New Zealand businesses in its failure, in terms of their being forced to comply with legislation that, essentially, has no meaning, because the Crown is not there to act in the same manner, on a level playing field, with business.

Originally, the bill said that the legislation must bind the Crown. Now it does not. This bill is all about Crown entities, and they have scratched out: “this Act must bind the Crown”. It just makes no sense whatsoever. I think what Miss Bond and Dr Clark have come up with is exactly the solution that we need. But perhaps if I put it to the Minister: maybe there is another compromise? Maybe if Crown entities can commit in writing to a time frame and a budget to say when they will comply—

Simon O’Connor: It’s in clause 8—clause 8, “the Act binds the Crown”.

FLETCHER TABUTEAU: No, it has been deleted, mate.

Hon DAVID PARKER (Labour): You know, one of the sayings you hear when you have been around this place for long enough is that the longer someone is in Government, the more out of touch they become and the more they become captured by the interests of their officials and of the Government departments that start to rule them, rather than the people they are meant to be here to serve.

I am somewhat shocked to hear that this Government, which has introduced this piece of legislation to reduce compliance costs by making sure that businesses can use a common number when they are dealing with the Government, is now saying: “Oh, but that is actually not what we are going to do with this legislation.” Members of the Government are actually now saying that the Government departments do not have to do it. They do not even have a list of half of the Government departments that would be willing to do it, and they are not even willing to give us a time frame within which any percentage of the Government has to deal with people through this unique or universal business number.

This idea that there are going to have to be 150 different computer programs written across Government departments is also a nonsense, but it belies an incompetence on the part of the Government more generally when it comes to IT projects. Of course there are a variety of IT platforms across Government, and the actual interfaces between the new software and those different software systems will have to be a little different. But, you know, the Government could have already written the overlying piece of software so that it then had to deal with only the interfaces for each department.

It has not learnt the lessons of PAYE. How many PAYE systems do you think the Government owns across the public sector?

Hon Clayton Cosgrove: Heaps.

Hon DAVID PARKER: There are an enormous number of them. Do they all work?

Hon Clayton Cosgrove: Bound to not work.

Hon DAVID PARKER: Well, they do not all work. The Government proves that to us every 6 months. We had Novopay. You would have thought that after Novopay, when the superministry, the Ministry of Business, Innovation and Employment—we are not allowed to call it “MoBIE”; there was a ministerial directive that we were not allowed to call the Ministry of Business, Innovation and Employment “MoBIE”—was formed as the superministry, would have checked it had the right PAYE system. Did it check? Was it the same Minister who is responsible for this piece of legislation? No, it did not check, and, as a consequence, we recently had the embarrassing spectacle that the Ministry of Business, Innovation and Employment did not have its own PAYE system right, despite the fact that it houses the Department of Labour.

Dr David Clark: They don’t even comply with their own law.

Hon DAVID PARKER: They do not even comply with their own law.

Hon Clayton Cosgrove: Fawlty Towers.

Hon DAVID PARKER: It is like Fawlty Towers. And then we are expected to come along and trust Minister Joyce to get it right here, despite the fact that, by amendment to this legislation, there is no compulsion on the Government departments to provide this universal or unique business number.

You know, I heard it said that this ought not to be used for all Government departments, and it is true. But I recommend this to the Police. We have actually got to the point in New Zealand that with less than 10 percent of burglaries resolved, the only way the police are going to resolve most burglaries is if the burglars provide their own unique identifier.

I do not say that seriously, but, really, consider the laughability of the Government in respect of its opposition to Ria Bond’s very sensible proposed amendment to this legislation to put some date by which the Government has to do something. Maybe the period is wrong. Maybe the Government or the Minister would like to take a call and say: “Actually, you know, we can’t do it overnight. We can’t do it within 2 years, as Dr Clark proposes, but we could do it within 3.” I think we in the Opposition would probably agree to 3 years. We would not mind even if we heard from the ministry, or the Minister in the chair, as to when the first Government department is going to be using it. It would be quite nice to have a unique Government department applying this universal business number. But we have not even heard the Minister addressing that.

There are a couple of other issues that I would like to raise quite seriously. One is: I do not think that we have had a proper discussion as to why it is that the IRD number—which every one of these businesses already has and already knows and already uses every 2 months on their GST return, or every year on their income tax return—cannot be the unique identifier that Government departments use. I have not heard the Government explain why that is. There may be some good reasons, but I have not heard an explanation from Government Ministers or in the Commerce Committee’s report or from the Minister in the chair as to why that unique identifier, which every business already has, is not the unique identifier that is going to be used across Government. I heard Brett Hudson say that that was impossible. Why?

It seems to be possible for the IRD number to be a unique identifier for every New Zealand taxpayer—i.e., every business already—so they seem to be able to work that for every business in New Zealand. Why can the rest of the Government not adopt that number? Why can the Government not be more sensible in the use of data generally?

We have got the problem in New Zealand that some people cannot vote at elections. The Government does not mind that, because most of the people who are disenfranchised by that are not likely to vote for the National Party. So National actually likes the rolls to be imperfect. You actually see this in election cycle after election cycle. The Labour Party, when in power—[Interruption] Mr Chair, this is a matter relating to unique identifiers. The Labour Party—

The CHAIRPERSON (Lindsay Tisch): Return back to it.

Hon DAVID PARKER: —makes it easier and easier to enrol—

The CHAIRPERSON (Lindsay Tisch): Go back to the New Zealand Business Number Bill.

Hon DAVID PARKER: —for people to get their ability to enrol. Then the National Party comes in and it makes it harder every time. There is a cycle to this. Well, why can people not have a unique identifier, like the IRD number, that entitles them to vote? That is how some other overseas countries manage their electoral rolls. They base it on the IRD number. They sometimes put a year of birth after it so that it makes it harder for people to defraud voting, because they will turn up and they have got to be about the right age.

Why is it that the Government will not do these sensible things that would save money to businesses, save money to the Government in the case of the electoral roll, save money to the Government in the case of using the likes of the IRD number instead of some other new unique identifier when we already have got one for every business in New Zealand? Why is it that the Government will not do those things? And then, more particularly, why is it that the Minister in the chair of this Committee stage of this process will not get up and defend the Government in respect of these questions? The answer is that on these issues they are less than competent.

We see it time and time again. We have cost overruns in respect of IT projects. We have delays. The one that we have had that is particularly egregious is that Parliament, twice, has had to have amending legislation to extend the date for implementation of a piece of legislation relating to child support payments. Twice, the Government has put deadlines on it for implementation, and, twice, because of its incompetence in respect of IT projects, it has not met the deadline and it has had to come back to this Parliament and do it again.

Now Government members have become so scared of their own incompetence that they will not agree to any time line, even though they know, as my colleague Jacinda Ardern has pointed out, from their own Cabinet papers and their own Treasury reports, that one of the reasons this will not work as well as it could work is that there is no built-in mechanism from Parliament saying: “Well, you know, we’ll agree a reasonable deadline, but, actually, we want to have some compulsion for the Government to do what it needs to do, in terms of its systems, to make this unique business number work.”

CLARE CURRAN (Labour—Dunedin South): This is the Government that in 2012, when Microsoft—with which this Government has major contracts in every Government agency, for the computers that run in every Government agency—announced that a software program called XP was going to run out and they were going to stop servicing it and were going to bring in other programs, this Government basically ignored that direction and did very little about it. When it came to 2014, when the actual servicing by Microsoft ran out, there were 20,000 computers in district health boards and more than 20,000 across Government agencies that were still running a software product that Microsoft no longer serviced, which meant that they were vulnerable to attack.

If that does not give you an indication of how this Government approaches big IT projects, managing across agencies—something that should be quite simple to manage, and it could not even do that. When you look at the Cabinet papers that came out on that issue, they said it was too hard because it was about managing across agencies. What this Government cannot do is manage big projects across agencies, and what we have before us in the Committee today is a piece of legislation that has been put forward and the work has not been done. The work has not been done to prepare the groundwork for how something like a New Zealand Business Number, which on paper and in concept seems to be a not too difficult concept to get your head around, could actually be put into practice.

When this bill came to the Commerce Committee, it had a clause in it—clause 34—that mandated all Government agencies to introduce a New Zealand Business Number. This side of the House, all of the Opposition parties that sat in the select committee, agreed that the intent of this bill was good, that it was sensible, that, ultimately, it should be done. And, yes, there was discussion about how that would ensue and what sort of mechanism would be used, but we supported that. When the bill came back to the House, mysteriously that clause disappeared and was replaced with clause 28, which says that Government agencies may use the New Zealand Business Number. We hear through other contributions in the Committee this afternoon as to why that is the case: it was all going to be too hard and the work had not been done.

So we have two amendments that have been put up this afternoon. One is from Ria Bond—I congratulate you on the amendment that you have put forward. The other one is by my colleague David Clark. Both of those amendments deal with the two flaws that are in this bill. The two flaws in this bill are, No. 1, that there is no mandate for Government agencies to adopt this legislation, which does make it a farce, and, No. 2, that there is no time line for any process for this to occur. So it could be that in 10 years’ time we see that many of the agencies, the Government departments, have not gone ahead and taken up this legislation. So it does seem to be rather a farce.

In the discussion and the submissions on this bill in the select committee, there were numerous submissions from agencies and from the private sector that asked for this bill to apply to all Government agencies, and for that to be mandated in the bill. That was fair enough. That was absolutely fair enough. If the private sector is being required to institute a business number, why then is the public sector not? We had numerous debates on whether there should be any exemptions within the private sector and what those exemptions should entail, but when it came to the public sector that clause disappeared, and it became as if it was all too hard.

I want to actually list what some of those agencies said. Business Central and the Wellington Employers’ Chamber of Commerce said that they were concerned that the intent of the New Zealand Business Number may be undermined if Government departments continued to use their own business identifier numbers. There must be a smooth transition, and the use of dual numbers should not be a barrier to full implementation. Chartered Accountants Australia and New Zealand, as we have heard earlier, said that it was disappointed that clause 34 in the exposure draft of the bill had been removed from the bill. Federated Farmers said “as many government agencies as possible should adopt the [New Zealand Business Number] as soon as practicable.” GS1 New Zealand said “it is critical … that [Government] agencies commit to, and meet published timetables for implementation of” the New Zealand Business Number. The New Zealand Chambers of Commerce and Industry said “government departments should transition … into this system once implemented,” and it cautioned against a “staggered approach”.

These are heavy hitters, yet, basically, the advice from officials was that this was outside the scope of the bill as it was emerging through the Commerce Committee and that it would now be implemented through Government directives. The problem is that this is a piece of legislation that went through extensive discussions and it has come back watered down, and you could even use the word neutered—neutered—as a result. And what it shows is that there is a veneer of organisation from this Government. Behind it lies the lack of preparation. I think this bill has had three, maybe four, Ministers who have carriage of it. I do not think there has been any strategy that has gone on behind it, and that is a real shame.

And it is not the only piece of legislation like this; my colleague David Parker referenced other legislation. The Harmful Digital Communications Act is another example of a piece of legislation passed by this Government in, seemingly, a hurry. It implemented a new criminal offence for people in the cyber environment and cyber-bullying, but one of the major parts of the legislation is the creation of an approved agency and a means by which parents, particularly—people who have got children who are being bullied online—can go somewhere. But they are unable to, and it is nearly a year since that legislation passed.

The CHAIRPERSON (Lindsay Tisch): Come back to the bill.

CLARE CURRAN: The relevance, Mr Chair, is that it is another example of the Government not being prepared when it brings a piece of legislation to the Committee. It has not done the work. The Harmful Digital Communications Act—that approved agency has still not been appointed. There is nowhere for parents to go for mediation when there has been cyber-bullying that has occurred.

With this New Zealand Business Number Bill we have no idea as to when the public sector is going to fulfil the intent of this bill, what the time line will be, whether or not major Government agencies will actually take it on, and when they will take it on. This is a problematic bill. What we have before us today is a neutered bill that does not fulfil the original intent.

KRIS FAAFOI (Labour—Mana): Seeing as you have a copy of the bill in your hand, Mr Chair, I will refer directly to it. I wanted to point out clause 3, which sets out the main purposes of the bill. I know other members have, but at this stage of the debate I just want to draw together a few strands of speeches that already have been made. The main purpose in clause 3(a) is to “enable eligible entities in New Zealand to interact more easily with government;”, and I do not think anyone in this Committee has a problem with that. Paragraph (ab), which is new and is from the Commerce Committee’s consideration, is to “enable eligible entities in New Zealand to interact more easily with one another;”. I do not think anyone in this Committee has a problem with that. Paragraph (b) goes on to “reduce transaction costs in New Zealand;”, and I think most parties in this Committee would like to reduce the amount of imposts that businesses have, so that they can be more profitable—no problem with that. I could go on, but I think people have got the gist.

The intent of this piece of legislation no one has any problem with. I think the Government has missed a trick, because we are actually trying to help it achieve these purposes in an effective and timely manner. When the Government was criticising the amendments of New Zealand First MP Ria Bond and my colleague David Clark it missed a trick. A contribution from Brett Hudson earlier on in this debate gave the game away. The Government is taking—and we have had this from its side of the Chamber—a yeah, nah attitude towards this piece of legislation: “Yeah, we want to do it, but nah, we don’t necessarily want to do it.” That is our concern on this side of the Chamber.

We want to achieve all the things the Government wants to—we want to help you. We have put forward amendments to make sure that the bill is effective, that it is timely, and that the kinds of benefits to businesses and government that you want to achieve actually happen in a good and proper way. But, as we have said, the bill in its current form, we feel, does not change that. When we first started this process, before Mr Hudson got on his feet, we feared. We perceived fear. That is why we thought we would bring these amendments—because we feared that the bill as we read it would not cut the mustard. Then Mr Hudson got on his feet and admitted that this piece of legislation does not cut the mustard, and the Government is quite happy that it does not cut the mustard.

So I am very confused about the attitude of the Government. It says it wants to do all these things for business. It wants to make it more efficient, it wants to make it more profitable—as it says in clause 3, the main purposes of this bill—but it is not backing itself to get there. So we are being helpful with these amendments, and good on you, Ria Bond, and good on you, David Clark, for putting these amendments here, to give this piece of legislation just a bit of guts and to make sure that it will effect what the Government actually wants to achieve. That is what this is all really about.

There has been concern about the effectiveness of this piece of legislation from one part of our economy that the Government usually does not pay any attention to, and that is Federated Farmers. In their submission to the select committee they expressed concern, concerns that we share, that the initial list of Government departments does not include agencies such as WorkSafe and Immigration New Zealand. Hold on a minute—that is what our amendment does. It is not just us playing politics; it is actually submitters, like Federated Farmers, who have come to the select committee and said: “Hey, if you are going to do this, do it properly, and make sure more than just a handful of Government departments are included in this.” They also helpfully suggested that we move things forward and also include local government within the realms of this piece of legislation, which we support on this side of the Chamber.

Maybe the Government should listen to Federated Farmers—pick up the red phone and listen to them around this piece of legislation. We do not agree with Federated Farmers all the time on this side of the Chamber, but on this occasion we do, because if the Government wants to achieve the efficiencies and the benefits to businesses and Government agencies, then we believe that pushing the boat forward a bit faster and giving it some guts is a good thing.

Mr Hudson claimed that on this side of the Chamber we do not know much about technology. I believe he has worked in the IT sector, and I have not, so I am taking a rather large risk using the next analogy I am about to use, and that is around the ultra-fast broadband roll-out. The analogy here is that you roll out this ultra-fast broadband cable, but you do not really want people to link up to it—just a few, so you do not overcrowd the market. You do not want to get too many people connected to it, because it might blow the system.

That is not what this Government, funnily enough, is doing with the ultra-fast broadband roll-out. It is rolling it out down all the streets. We hear all the time that “It’s a part of the economic development of our country. We’re rolling out this ultra-fast broadband and we want as many people as we can to connect to it, because it is good for our economy.” I can see some parallels here, because the Government is saying “We’re creating this New Zealand Business Number, and for these reasons we think it’s good for business, and we want only a few of our Government agencies to use it but not all, because we think it might overload the system and they’re not ready for it.”—which is another issue in itself.

So I think the Government is guilty of a slight double standard here in that it wants this piece of legislation out there, it wants businesses to be able to use this Business Number, but, in all reality, it is not ready for it to be out there and to be effective. Chartered Accountants Australia and New Zealand also came to us and expressed concern around that. It said in its submission “the benefits for businesses may be overstated” without the mandate for recognition of the business number contained in the original section 34, and “without significant uptake there is a risk that the identifier is not integrated and utilised widely, and just becomes another number,”. And that is a phrase that you will hear during this debate as we continue, because that is what we fear may happen if there is not a clear sense of purpose and a clear sense of urgency for Government departments to sign up to the New Zealand Business Number.

There has been talk of why we have not adopted the IRD number as a New Zealand business number. I think it was my colleague David Parker who said that that number is already in place, so could that have been adopted as the identifier, instead of adopting a new business number? That was one submission put up during the Commerce Committee’s considerations.

The question was raised as to whether this is the most effective way to do it. It could be. The New Zealand Business Number could be the most effective way to do this, but we do not believe that the Government is backing itself in this instance to make sure that it is effective and timely. That is why, to finish up, the amendment in the name of Ria Bond and David Clark’s amendment to her amendment should be taken seriously by the Government if it really wants this New Zealand Business Number strategy—apparently there is a strategy—to be effective. If you want to help businesses and you want to make them more profitable, then do things properly.

STUART NASH (Labour—Napier): I would like to talk about clauses 24, 25, 26, and 27.

Simon O’Connor: What about 28?

STUART NASH: Well, we can do 28 if we have got time. Let us wait and see. These clauses, basically, talk about the difference between public primary business data versus other primary business data. What we have here is two different types—two different levels—of data that have to be collected on the register. There are some questions that I have got.

Clause 24 basically says that the registrar must keep and operate a register. That makes sense. I mean, it is part of the bill—it is just how things are done. But clause 25 says “Public primary business data … must be available for access and searching by members of the public at all times,”—OK, that makes a lot of sense. If we go to Part 1 of schedule 3—I only want to talk about corporate and public entities here—it outlines the sort of information that must be registered. It is the sort of stuff that should be found on any business website—you know, your name, your trading name, your address, your location identifier, obviously the number, start date, and type of entity. But there is one question that I have got here: in clause 25(2) it actually says: “The Registrar may refuse access to the register or otherwise suspend the operation of the register, in whole or in part, if the Registrar thinks that it is not practical to provide access to the register.”

What does that actually mean? Under what circumstances would the registrar say: “Look, it’s just not practical for me to provide this access, therefore, I’m not going to.”? I would have thought there would be at least some sort of test, as opposed to just saying that it is not practical. Does that mean, you know, it is 4.30 on a Friday and I am about to go home, it is not practical? I am unsure what that means; it is a little confusing.

The other thing that I would also like to talk about is that we have got public primary business data, then there is also other primary business data. This is the data that must be provided, but can be accessed only by Government departments. The thing that strikes me as a little bit skew-whiff about this is that after 2008 and the global financial crisis, when a whole lot of entities fell over due to, you could argue, negligent business practice, the Parliament passed a whole lot of legislation that made investing a lot more transparent. It was recognised that, OK, there is business risk in any sort of investment, but one of the risks that investors should not have to deal with is that of negligence or dishonesty. But here, the sort of information that the public does not have access to is the sort of information that, I would have thought, the public should have access to.

The other thing is that it is called “Other primary business data” and it is in Part 1 of schedule 3A. It is things like GST status, postal address, and physical address. It is not onerous. There is nothing that I would have thought would be proprietary in this—it does not contain any sort of intellectual property or anything that I would have thought a business’ competitors could look at and go: “Ah, now I know a lot more about this and I can mount some sort of competitive—or I can gain some sort of competitive advantage.” But the thing that gets to me a little bit is if we go to clause 27—this is “Government agencies’ powers relating to register”—subclause (1) says “A government agency may access and use any public primary business data contained in the register”, which is absolutely fine because, according to this bill, any member of the public can do that. But then we go down to subclause (1A), “A government agency may access and use any other primary business data”—so this is the confidential stuff—“contained in the register … if (a) an enactment, other than this Act, authorises the agency to collect that information;”.

I would have thought if someone is operating a business and they are going to be part of this—because this is supposed to make it easy between businesses relating to Government etc.—then the business would want to know what enactments, apart from this legislation, could be covered under this. I would have thought that at least in one of the schedules it could outline the other enactments, or the other pieces of legislation, under which a Government agency would be likely to access this data, because if I looked at this, it just provides no information whatsoever.

It also says that if a New Zealand Business Number “entity has consented, in the manner determined by the Registrar,”—fine, no problems with that. If you consent to give information to a Government department, then there are no problems whatsoever. But I just would like—[Bell rung] Mr Chair.

The CHAIRPERSON (Hon Trevor Mallard): Urgh! Stuart Nash.

STUART NASH: Gee, it is a hard choice, is it not? It must be riveting that people want to hear what else I have got to say. I would have thought that what we need to do and what we should be looking to do with all legislation that pertains to making business easier—interactions between Governments and business and between businesses and businesses—or what the No. 1 test is: (a) how transparent this is, and (b) how it is going to drive efficiency. As my colleague Kris Faafoi pointed out, yes, the purpose of the bill is actually noble. I mean, of course businesses want to be able to interact with Government agencies in a way that creates efficiency, and of course businesses want to be able to interact with other businesses in a way that minimises cost and creates efficiency. But the thing that I would have thought we would have in here something about transparency, because it is not just the businesses and Government agencies that need the information, it is also potential investors and current investors, who I think now require or demand a level of information that allows them to make informed decisions. And I think that by saying that they are not allowed access to Part 1 of schedule 3A—“Other primary business data”—it just goes against what we have been trying to do as a Parliament since 2008, or certainly 2009, when legislation came in that made companies more accountable to their investors.

The last thing I would just like to reiterate is that I just cannot figure out what other pieces of legislation may be enacted that would require a Government agency to download the information here. I would have thought, again, in the interests of transparency, that at least some or all of the legislation—because there cannot be that much—would be outlined in a schedule so that the transparency exists, both for the business and, to be fair, for the other Government agencies. The last thing a business wants to find out is that the Inland Revenue Department or the Department of Labour or some other Government agency has, in fact, accessed its data and the entity has not given it permission to do that. A business wants to know under which piece of legislation a department has been able to gain access to this data. So transparency must be a cornerstone of all legislation that pertains to business information. Thank you very much.

The CHAIRPERSON (Hon Trevor Mallard): Jacinda Ardern. Let us just check—

JACINDA ARDERN (Labour): And fair enough, too, that you check whether the Government might like to make a contribution on this bill.

I want to speak specifically to Part 2, clause 29. This specific clause empowers Ministers, by Order-in-Council, to make a recommendation to the Governor-General that would authorise a Government agency to require an eligible entity, or class of eligible entity, to register for a New Zealand Business Number. This does go to the heart of some of the substantive debate that we have had in this Committee this afternoon, around at what point, and to what degree, do you compel agencies to adopt the New Zealand Business Number in order for it to achieve its stated goals. I spent my first contribution talking about the fact that in order to achieve the purpose clause—to reduce transaction costs for business and to improve costs for the Government as well—we actually need a wide-ranging number of Government agencies and entities to take up the New Zealand Business Number, and the Government’s reluctance to put a time line around that really will destabilise the ability of this bill to achieve its goals.

Clause 29, though, does allow—does empower, to a certain degree—the Government to kind of compel that to happen. Under clause 29(2), it states: “Before making a recommendation under subsection (1), the Minister must—(a) consult the Privacy Commissioner …”—obviously, taking into account privacy effects—“and (b) have regard to the following matters: (i) the advantages and disadvantages, for eligible entities, of the authorisation; and (ii) the potential effects of the authorisation on the government agency’s costs.” But I am disappointed not to see consideration given there to the cost to business of an agency or entity not taking up the New Zealand Business Number. We are concerned, here in this clause, around the costs to an agency but not to business, and yet it is cost to business that drives the entire purpose of this bill. That seems to me to be a drafting oversight. If we are going to do a cost-benefit analysis on whether or not an agency or entity should be compelled to take up a New Zealand Business Number, and we are interested in the cost to an agency but we are not, on the flip side, interested in the cost to business, that seems, again, slightly counter to the stated purpose of the bill.

I also wanted, though, to raise a submission, which has not been discussed up until now, by a group called GS1 New Zealand. For those of you who are not familiar with GS1, I will read directly from its submission: “GS1 New Zealand is a partner of the Government for the NZBN Registry. NZBN identifiers are GS1 Global Location Numbers (GLNs, provided by GS1) and we have been very involved in the consultation process and implementation for the NZBN. Under the partnership with the Government, all public data from the NZBN registry is mirrored into GS1 New Zealand’s registries and thereby syndicated out around the world.”

GS1 New Zealand represents over 5,000 organisational members, and it submitted to the New Zealand Business Number discussion document. It is a partner to Government in delivering the New Zealand Business Number and, obviously, fundamental to the implementation of this bill. With the fact that it syndicates out more broadly, it is more than just a partner; it is a delivery mechanism. It set out in its submission some specific views on clause 29, which I have just referred to. It stated: “Our view, in alignment with our Point 1 above, that agencies should be encouraged to mandate the use of a NZBN in transactions with business as early as practically possible.”—as early as practically possible. It identifies uptake as being one of the key turning points on how well this piece of legislation, and this whole policy, will work. As I have said, it is not just an interested party; it is a partner, essentially, in the delivery of the New Zealand Business Number.

I think that we have really used the Committee stage to highlight (a) the potential we see, but (b) the pitfalls with this piece of legislation.

Part 1 agreed to.

The question was put that the following amendment in the name of Dr David Clark to the proposed amendment in the name of Ria Bond to clause 28 be agreed to:

After “A government agency must”, insert “, within two years of the Act coming into force,”.

A party vote was called for on the question, That the amendment to the amendment be agreed to.

Ayes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Noes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment to the amendment not agreed to.

The question was put that the following amendment in the name of Ria Bond to clause 28 be agreed to:

Replace entire clause 28: “Government agencies may use NZBN”

New clause 28:

“Government agencies must use NZBN”

A government agency must use the NZBN of an entity (including using it in addition to, or substitution for, any other identifier the government agency may use for that entity) if that use is in accordance with the purposes of this Act.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Noes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

Part 2 agreed to.

Schedules 1, 2, 3, 3A, and 4 agreed to.

Clauses 1 and 2 agreed to.

Bill to be reported without amendment presently.

Bills

Building (Earthquake-prone Buildings) Amendment Bill

In Committee

The CHAIRPERSON (Hon Trevor Mallard): Members, we now come to the Building (Earthquake-prone Buildings) Amendment Bill. The question is that Part 1 stand part. Just to make it clear, this is clauses 3 to 41B and the schedule, David Seymour’s two amendments, and there is debate on Ron Mark’s amendment, but at the appropriate time it will be ruled out of order because it is of an omnibus nature and outside the scope of the bill.

Part 1 Amendments to principal Act

PHIL TWYFORD (Labour—Te Atatū): As we kick off the Committee stage on the Building (Earthquake-prone Buildings) Amendment Bill, I want to focus, in my opening remarks, on the two Supplementary Order Papers in the name of David Seymour. Mr Seymour has put up a couple of amendments that pertain to Part 1 of the bill, which I think deserve some serious discussion.

The first is Supplementary Order Paper 152, which basically reflects the advice that GNS Science came to the Local Government and Environment Committee with and submitted. The amendment covers the areas that are in a low seismic risk zone—so we are talking about Auckland and Northland—that are basically deemed to have an extremely low risk of a severe earthquake, for example, one in 110,000 years. David Seymour’s amendment would let that entire part of the country off the hook completely, when it comes to the requirements of this bill. The argument is that including the buildings in this bill would have minimal benefit but would impose large costs on private property owners.

We approached this debate genuinely with an open mind, and I would like to invite the Minister in the chair, the Hon Nicky Wagner, to take a call on this and to share with us the Government’s view and the officials’ advice, so that we can have a real debate about David Seymour’s amendment. It is worth, I think, on the face of it, taking it seriously because it is based on the submission from GNS Science to the select committee. I suppose the basic question of logic that I have is that this House and the committee have created this stepped risk-based approach that is now fully reflected in the bill, based on the idea of dividing up the country into zones of seismic risk. I think everybody accepts the logic of that.

But the question is, if we are going to allow a large part of the country to be completely let off the hook when it comes to the requirements of earthquake-strengthening in this bill, is that a step too far? Is that driving a bus right through, perhaps not the middle but the side of this bill? Is that a step too far? Is the science precise enough that we can say, with any level of certainty, that the risks—given that GNS Science came along to the select committee and said: “Actually, seismic risk differs from place to place, throughout the country, and you need quite a fine-grained analysis of the areas of seismic risk.”, can we be sure enough, to support David Seymour’s amendment, that there really is insufficient risk to justify imposing the requirements of this bill on a very large part of the country? As David Seymour says, even the costs alone that will be imposed on the owners of buildings for getting the assessments done are very significant.

On the other hand, the risk-based approach that is now in the bill will mean, I think, that a non-priority building in Auckland, for example, would have a 50-year time frame, when you add up the different components, before remediation would have to be completed. If it was a heritage building, the owners could apply for a further 10 years. That is a long time, in anybody’s book. I think that is the kind of counterargument to David Seymour’s amendment. I want to just make it clear that we approach this with an open mind. We would really like to hear the Government’s point of view on this issue and, of course, hear from David Seymour.

The other amendment from David Seymour would inject into the bill, in clauses 6 and 23, an earthquake life risk rating. I think this is also an interesting idea that we think merits serious discussion. If, for example, a country church is deemed to be an earthquake-prone building, but it is used only for a very short period of time, sporadically—it might only have people in it for a couple of hours a week—does that justify what proportionately could be really significant costs?

On the other hand, you have to wonder whether or not it would be workable to create a system that could actually be implemented and managed that would allow particular buildings to be subject to a whole other rating system, as is proposed by David Seymour’s Supplementary Order Paper, and how that would be maintained over time. What if the particular building—it might be a sports club or some kind of community facility—has a very erratic usage pattern? In one week maybe it is not used at all, and then it might be used intensively for a period of weeks or months. So these are real, logistical issues that need to be debated and discussed, and I invite both the member who has put these amendments up and the Minister in the chair to share the advice and views that are available on these two amendments.

I have lots to say about Ron Mark’s amendment, but we will not waste any time on that, given that according to Mr Chairman that Supplementary Order Paper will not be debated at all.

POTO WILLIAMS (Labour—Christchurch East): I am happy to take this call. It is quite a meaty bill, and there are many parts of it that we will, no doubt, cover over the course of this Committee stage debate. I want to start, perhaps, with just saying that we all know that as a result of the earthquake sequence in Canterbury, work has been done to assure the public of New Zealand that we are taking full cognisance of the risk of earthquakes and the state of our buildings across the country to ensure that we have got plans in place to ensure that we do not have similar types of issues that we had in Canterbury.

Specifically, within this bill there are three main issues that really speak to some of the concerns that came out of the Canterbury earthquake sequence. My colleague talked about deciding a triage, I guess, of seismic risk and of developing a process that really looked at identifying what type of earthquake posed more risk to buildings than others. We have stratified that into three categories of low, medium, and high. I do not know whether you have the GeoNet app on your phone. I certainly do. It is a bit of a pastime to see where quakes have been happening around the country. We have been getting quite a few through Porangahau and through some areas of the country, but a lot of those lower-level earthquakes, when they occur, cause very little damage to buildings in those areas.

Stratifying the risk and identifying what is low, medium, and high, has been very useful and actually having a definition of medium seismic risk within this piece of legislation is useful as well, as is identifying some priority buildings, as well as those that we know we should be attending to first. So under the Ministry of Business, Innovation and Employment guidelines, they have been identified as being the hospitals and emergency services, and certain educational facilities. I want to speak of the unreinforced masonry buildings separately, but those first two—the hospitals and the educational facilities—are important, regardless of where they are across the country. They have a priority.

Not only are they centres for medical support, but in times of disaster they actually become the hub for the community. So they become the place that the community will go to, to ensure they can get information or they can be accommodated. Often, school facilities are used as places where people can stay, where they can get a meal, and where they can get information on what is happening in a disaster. So it is great that those buildings have been identified as being a priority for assessment and then going on to have the work to strengthen them, should that be required.

I come to the third point I wanted to make, which is that it is really important that this bill includes the issue of unreinforced masonry, because we know most significantly that during the February earthquake in Canterbury the parapets and verandahs that fell on people and on vehicles actually caused significant harm. In fact, I think about 40 people lost their lives when parapets fell, and so it is really important that, as part of this legislation, we take care of those buildings that have those unreinforced structures attached to them.

Just in relation to the Supplementary Order Papers by David Seymour, I notice that there has been quite an extraordinary amount of work that has gone into, particularly, Supplementary Order Paper 156, which really looks at the earthquake life-risk rating. Through a process of identifying the risk rating for a particular building and doing an assessment of that, Mr Seymour is attempting to, I guess, provide a mechanism for those owners of those properties to then find the ability to identify what is low risk and then, if they can identify that they are low risk, they are able to receive an exemption. The exemption is then noted in the register, and then any material changes to that particular building would mean that the building would no longer qualify for that exemption and a material change in circumstances would be noted. I do note, however, that it is the owner’s responsibility to notify when there is a change in circumstances to the territorial authority, and this does put the onus back on the owner to do this work.

My only argument against this proposal is that I think it would be much better if we actually build our buildings up to building code in the first place and then we do not have to have an assessment to assess which buildings are low priority to be remediated in terms of their earthquake-prone nature. It would be much more positive to have the solution being good engineering and substantial building codes to build buildings properly in the first place, because there is an issue that we have that may not be identified with this Supplementary Order Paper.

There is a set of criteria within this Supplementary Order Paper that could determine what buildings are low risk—you know, that is the seismic capacity of the building, the construction characteristics, the occupancy and when this building is occupied, the conditions that may change to affect the earthquake risk rating, the seismic risk, and its location to other buildings. If you will recall, during the Canterbury earthquakes the Hotel Grand Chancellor was one such building that posed a risk to the other buildings around it. Those buildings were not necessarily damaged to the extent that they had to be demolished; however, because of the threat of the Hotel Grand Chancellor falling on top of them they became hugely risky. Those buildings were closed as a result of the risk posed to them by another building.

So I would want Mr Seymour to consider within this Supplementary Order Paper whether the risk rating of a particular building is dependent on the building next door to it or being in proximity, which may cause it some risk. That, I think, is something that Mr Seymour may want to explore. On that note there is plenty to explore within this bill and I am happy to take a call later. Thank you.

JAMI-LEE ROSS (Junior Whip—National): I seek leave for the Committee to consider all questions and debate on this bill as one question.

The CHAIRPERSON (Hon Trevor Mallard): Leave is sought for all parts, the two clauses—for all provisions to be debated as one question, but, clearly, there will be separate votes because there are separate amendments later. Is there any objection to that? So the question now is that Parts 1 and 2, the schedule, clauses 1 and 2, Mr Seymour’s amendments, and Mr Mark’s amendment—notwithstanding the fact that it is going to be ruled out—stand part. Those who are of that opinion—

David Seymour: Aye.

The CHAIRPERSON (Hon Trevor Mallard): Do you want to debate them?

David Seymour: Yes, yes.

The CHAIRPERSON (Hon Trevor Mallard): Well, take a call.

Parts 1 and 2, schedule, and clauses 1 and 2

DAVID SEYMOUR (Leader—ACT): I was waiting to say “Aye”, Mr Chair. Can I make two opening remarks about this bill. One is that, as many people have said throughout the passage of this bill, it is very important to honour the victims of the Canterbury earthquakes, and that is foremost in my mind, too. I believe that the best way to do that is to make sound public policy and actually enable New Zealanders to protect themselves against all the risks that they face. That is very much the intention of the two Supplementary Order Papers—Supplementary Order Papers 152 and 156—that I have on the Table today.

I will run through those Supplementary Order Papers, but, first, I have one other observation about the passage of the bill to this point. The Minister for Building and Housing, in the select committee process, was pushed back very, very hard, and, as he said in the second reading, he was surprised, despite having a PhD in civil engineering, to learn that earthquake risk varies around New Zealand. I found that unusual, but it explains a lot about how the bill got to this point.

Having accepted that there is a variation in earthquake risk around New Zealand, I think it is appropriate that we consider going one step further, because by having low-risk regions such as Auckland, such as Northland, such as Ōāmaru, and such as Dunedin included, what we are saying is that even though your chance of being in a severe earthquake in Auckland, for instance, is one in 110,000 years, you must consider the possibility of earthquake damage to your buildings being a risk, and you must be prepared to spend $10,000 to $20,000—according to the regulatory impact statement—to work out whether or not a particular building is in danger. The estimates in this second version of the bill are that rather than 700,000 buildings being potentially in need of assessment, only 30,000 buildings will need to be assessed, but that still gives you anywhere from $300 million to $600 million of cost in assessment alone, assuming that one already knows that the buildings being assessed are in that 30,000, which of course one would not know because the purpose of assessing them is to find out. So we are talking about hundreds and hundreds of millions of dollars in building assessment costs.

I would put it to the Committee that we can say that in the case of Auckland, Northland, Ōāmaru, and Dunedin, where the risk has been assessed by GNS Science to be so low that there is as little as a one-in-110,000-year chance of having a severe earthquake, that money is throwing good money after bad. There are so many other risks that New Zealanders would like to protect themselves against that it is almost impossible to conceive that that is a good use of half a billion - odd dollars, or at least the $200 million that we might expect to be spent in the one-third of the country—

Phil Twyford: Over 50 years, though.

DAVID SEYMOUR: —that has been assessed as being low risk. And Mr Twyford is quite correct.

In addition to introducing a new set of risk categories, what the Minister has done is further trivialise the costs, or at least the perceived precautions taken against risk in those regions, by saying: “Don’t worry. The cost will be lower because you will have 50 years, and potentially 65 in the case of a heritage building, to assess whether or not the building is truly at risk.” The Minister cannot eat his cake and have it too. He cannot say that the danger is great enough that private property owners will be forced to spend between $10,000 to $20,000 finding out whether they are at risk in the first place, on the one hand, but also that the risk is so small that they need not concern themselves with mitigating against it for up to 65 years.

The fact is that New Zealanders face a very wide range of risks in their lives. If I could just give three examples of the types of risks that Aucklanders or Northlanders like myself face, the chance of dying of cancer in New Zealand in any given year is one in 500, and, as we know, there is a lively debate in New Zealand at the moment about how much of our community’s resource should be going into mitigating against that risk. The chance of dying in a car crash in New Zealand in any given year is one in 10,000, and we spend a lot of time in this country trying to mitigate against that risk with a whole variety of measures, including spending a lot of money trying to make roads safer. And the chance of being caught in a severe earthquake—not even the chance of dying, but just the chance of being in one—multiplied by the chance of being in a particular building, and multiplied by the chance of it being severe enough to hurt you is such an infinitesimal risk that we would be far better to exempt these regions from being forced to spend a large amount of money mitigating against it.

I would add that it is not only that they will be forced to spend money on assessment but also that buildings will be stigmatised by having to have notifications that the building is unsafe. It will take some time for that information to percolate through the community, and for a time it will undermine property values and damage people’s livelihood, which is another distortion and another reason to exempt those regions given the very small risk, which the Minister has acknowledged by creating new categories and by saying that you have up to 65 years to adapt the building, in any case.

The second Supplementary Order Paper that I have on the Table is somewhat more sophisticated and, I believe, possibly more important because it affects the whole country. If one talks to structural engineers, and I have spoken to some of the experts in the field on this topic, they will tell you that when a new building standard is calculated for a particular building, of course engineers—a profession with which I myself have some considerable sympathy—take into account the factors of the occupancy likelihood, or the chance of somebody being in a building at a particular time; the location and the probability of a severe earthquake in that area; and, of course, the type of building and its structural characteristics to try to work out what the new building standard should be in respect of earthquake risk. There is also considerable debate and dispute about whether or not the extent to which those differences are allowed for truly reflects the extent of differing risk to life in different buildings. Some will claim that, in actual fact, the Z factors of adjustment that are cited in the bill are insufficiently reflecting the true difference in risk.

The simple way to resolve that dispute from the point of view of this Committee is to take the advice of GNS Science and actually follow the principle that the law should be accessible to the citizenry. So if we believe that it is the intention, by having a new building standard, to take into account the probability of a serious earthquake in a given area, the probability of a particular building being occupied at a particular time, and the probability of a building of that type collapsing and doing damage, then what one needs to do is spell that out in the law.

So my Supplementary Order Paper 156 inserts new section 133ABC, which introduces the concepts of earthquake life risk into legislation. What that would mean is that buildings that do not wish to comply with the regime of new building standard—which I regard as a blanket approach right across the country and, therefore, inappropriate—will have the option of demonstrating that the risk associated with a particular building, given its location, its structural characteristics, and its occupancy characteristics, will actually be able to calculate the real earthquake risk to life in a way that is comparable with other risks. [Bell rung] Mr Chair.

The CHAIRPERSON (Hon Trevor Mallard): It is normally the case to give a member only two calls. Seeing as the member has an amendment, I am just going to ask Mr Foster-Bell to wait a minute and let Mr Seymour finish.

DAVID SEYMOUR: Thank you, Mr Chair, and these are quite technical matters, so I appreciate being given the time to be able to explain as much as I can of them.

So the idea is to introduce the concepts of life risk for a particular building. Going back to my initial remarks about paying tribute to the victims of the Canterbury earthquakes by making public policy that is human, what this allows us to do is empower the people of New Zealand to make decisions about what sort of risk is tolerable in the case of a particular building, to calculate that risk based on the real probability of life being lost, and to actually compare that with other risks and other threats and other resource destinations, if you like, that New Zealanders have as they try to grow and prosper and live their lives.

I suspect, based on the feedback that I have had from the Minister, that he will be unlikely to take on this particular Supplementary Order Paper and that his party will not support it. I think that that is a great shame. But I hope, pyrrhic as it may be, that other parties will come along and support these amendments for the simple reason that the best way to pay tribute to the victims of the Canterbury earthquake is to make good public policy to say that the transaction costs of establishing whether or not a particular building is an earthquake-prone building under the currently proposed regime are excessive for the risk that is faced in Northland, in Auckland, in Ōāmaru, and in Dunedin, and to say that if it is the intention of this House that people will actually be able to compare the risks that they face in different areas, then we should actually put that in the law and make it accessible to the people whom we are supposed to represent, who should be able to read that law.

There were a couple of questions raised by the Labour members that I thought were very good questions, which I will try to address in the remaining minute or two of this call. I think it was Phil Twyford who asked what would happen with a high level of variability of occupancy in a particular building. Well, Mr Twyford, I think the only way to answer that is to assume that any legislative proposal must be given strength by the regulations put in place. You can only hope that the regulations the Minister would put in place, if he was forced to regulate on the basis of this legislation, would allow at the very least for an annual cycle and not cherry-pick a particular part of the year—that would clearly not be in the spirit of the legislation—and, as the other Labour member, Poto Williams, pointed out, they would actually allow for liability to self-report whether or not the occupancy rates given at one time continued to be viable, because otherwise that would be a breach of the law. I believe the law as it is written does allow for that possibility, presuming that it is going to be enforced and adhered to by the parties to it.

Poto Williams’ question about the building in Christchurch—I think it was the Hotel Grand Chancellor, and I remember seeing it teetering in Christchurch before it was destroyed. She asked what would be the impact on neighbouring buildings and how the potential impact on neighbouring buildings would be assessed.

I can only assume that if we are going to legislate that the risk of a particular building, given its structural characteristics, is going to be considered, then you would have to have a consideration of the neighbouring environment and what other buildings might do to that building. So you are back where we started, with the law of neighbourly relations, which is that if you are going to impose that sort of danger upon your neighbours, then that is going to be a cost to them and they are not going to be too happy with you. So I believe that although I did not anticipate that objection in the drafting of this Supplementary Order Paper, I think it is a very good one. I would think that within the Supplementary Order Paper as currently drafted it would be considered in the interactions between neighbours, as it is now. I am quite happy to have that challenge.

The CHAIRPERSON (Hon Trevor Mallard): Paul Foster-Bell—in calling the member, I want to thank him for his politeness in allowing a more coherent debate.

PAUL FOSTER-BELL (National): Thank you, Mr Chair, and it was a pleasure to yield to my colleague, even if I do not agree with aspects of his contribution.

In speaking on this Building (Earthquake-prone Buildings) Amendment Bill in the Committee stage, I want to begin by focusing on a piece of this legislation that may not have been concentrated on so far, and that is the provisions around heritage buildings. There are two reasons for that. As a resident of Wellington, where we have some wonderful heritage that needs protection, but also as a resident of the second-most vulnerable capital city in the world to seismic events, after only Tehran, which is the No. 1 city vulnerable to seismic events, I think there are some balances that we have to strike in this legislation to ensure that our heritage is protected but that human life is also protected. As someone who not only works in this beautiful heritage building 3 days a week but also lives in a heritage apartment block from the 1930s, it is something that is on my mind and, I know, on the minds of many Wellingtonians.

If we turn to clause 23 of this bill, which amends section 133AT of the principal Building Act, it talks about the owners of certain heritage buildings being given additional time. I think this is a sensible measure. If we look at the times that it would be required in Wellington, Wellington is the highest-risk area, so there would be a 5-year period for investigation and assessment of buildings, with a further 15 years provided to allow for upgrades and renovations to take place to bring the building up to standard. In addition to that, this particular section of the bill would allow an additional 10 years for the owners of category 1 listed historic places. Those are buildings that are listed in the New Zealand Heritage List, maintained under section 65 of the Heritage New Zealand Pouhere Taonga Act 2014.

Those are the most significant, most important buildings, and we have actually had a number of them feature in the media recently. There is the excellent work that has been done on the old Public Trust Office on Lambton Quay, for instance—on the corner of Lambton Quay and Stout Street. That is a building of significant architectural heritage that has been renovated up to a very good standard, using the latest technology, to allow it to continue to function as offices, including offices for the Ministry for Culture and Heritage but, also, it is rumoured to feature a new Jamie Oliver restaurant—another fine eatery for our capital’s entertainment sector.

The sort of work that would be required there may actually be significantly more expensive than building owners can afford to do, if it was required to be delivered within that 20-year period of assessment and renovation that would usually be provided for in an area like Wellington. So I think the addition of the extra 10 years for those most important buildings, those very significant, perhaps even unique, examples of that style of architecture in New Zealand—for them to be preserved, that is sensible.

But we have other issues here in Wellington. The Harcourts building further down Lambton Quay; it is not a category 1 building. It is a less exceptional example. Having previously worked in that building—it is used in part by the Ministry of Foreign Affairs and Trade—I can say it is not actually a fantastic building in its current state. It is not, in my view, particularly aesthetically pleasing. However, it does have certain protections applied to it, and that has complicated the renovation and strengthening process there.

I think this part of the bill strikes a sensible balance between the need to protect human life and giving building owners of those heritage buildings sufficient time to undertake the work, so I particularly want to applaud and welcome that provision in the bill that is clause 23. Thank you.

Hon DAVID PARKER (Labour): Could I begin by thanking David Seymour for his contribution on the Building (Earthquake-prone Buildings) Amendment Bill, because although I might disagree with the way in which he has implemented his intention to properly assess risk and not misallocate precious resources, I actually agree with the philosophy. What I would say, though, in respect of Dunedin, which is one of the examples that he points to as being lowest-risk, is that—and I am from Dunedin—in my lifetime I have been in earthquakes in Dunedin that have had chimneys fall over. So although it is right that it is lower risk than other parts of the country, it is actually not without risk.

I would also note that in Dunedin it is an interesting case in point as to how much can be achieved. Some members will know, but other members will not, that already, under the code that is proposed in respect of upgrading for earthquakes, lower levels of upgrade—or, if you like, an upgrade to a lower level—are proposed in respect of areas that are lower risk than areas that are higher risk. For example, a building that was in Wellington or Queenstown, both of which are high earthquake areas, will have to be upgraded to a higher standard than a Dunedin building because the assumption is that the earthquake risk is higher in Wellington and Queenstown. It is true that the costs that have been put upon building owners in Dunedin are lower than they are in Wellington, and that is prudent—that is prudent, in respect of both Wellington and Dunedin. It is also true that a lot of building owners would like to avoid any cost of upgrading their buildings, despite the fact that they have a latent defect that, from a public policy point of view, it is proper to protect the public from.

In Dunedin because of when it was built, which was in the late 19th and early 20th centuries, there was an incredible building boom following the gold rushes and at that time, partly because of civil disturbances in the rest of the country and partly because of geographic location relative to ports, Dunedin was the most populous and wealthiest city, indeed through to about the 1920s. That building stock is now very old and a lot of it dropped to close to nil value with people claiming that there was no economic use for those buildings. Once those buildings, and the owners of those buildings, were forced to, effectively, internalise to that building the future cost of upgrading those buildings to a decent earthquake standard, a lot of them dropped to very close to nil value, but they were then economic to repair. It is quite pleasing in Dunedin that a very substantial proportion of the buildings that were in need of repair, these two or three-storey brick buildings, have now been repaired, and more of them are being repaired to high standards.

The final point I will say before sitting down is that it is really important in the implementation of this legislation that we do not let the Building Act get in the way of sensible outcomes. The cheapest way to do up buildings that are earthquake risks is to allow them to be unpicked, and then almost have an iterated process using engineers, at the time that they are being unpicked, to design the most cost-effective solution. If you try to do it from the plans before the building is unpicked and before all of the defects are uncovered, in order to get a consent, you drive an outcome that is far more expensive because you have to design against the possibility that there might be a defect, rather than the reality that it is.

In terms of the implementation of this, it is actually the Building Act and the interface between engineers, this code, and the building processes that we need to get right. Because if we do not allow that process—and I have seen examples of this in Dunedin and, indeed, I have been involved in some personally—if we do not get the practical engineers who are able to unpick and say “Well, actually, there are different ways that we could do this but we won’t really be sure until we pull off all of the internal linings and the building is unoccupied and we’ve got all the ceilings and the wall devices off.” you will not get to the most cost-effective solution.

Sitting suspended from 6 p.m. to 7.30 p.m.

MATT DOOCEY (National—Waimakariri): It is a pleasure to take my first call on the Building (Earthquake-prone Buildings) Amendment Bill in the Committee of the whole House. First, I would just like to acknowledge everyone who has been involved with this bill through the legislative process. I feel like there has been a lot of listening and there has been a lot of learning. For my region of Canterbury, it is quite a sensitive issue as well. I think where this bill currently lands is in a very good place.

There are just a few things I want to talk more specifically on, and that is around clause 23 and a few of the sections there—133ABB and 133AA. Basically, I think where clause 23 is landing at the moment is giving people a framework. It is setting out very clear expectations, and it is, ultimately, giving confidence. So I suppose when you look at section 133, around the three seismic-risk criteria, it is very clear in that framework. It sets it out—high, medium, and low for identification of earthquake-prone buildings, which is just under 34 percent of the new-build standard. There is 5 years, 10 years, and 15 years respectively, and then the subsequent response stage for strengthening those buildings.

In my electorate of Waimakariri it is very often canvassed that we call the earthquakes the Christchurch earthquakes, but, of course, what happened in my region were the Canterbury earthquakes, because an area like Waimakariri was very hard hit. But I would call it the tale of three towns, because towns like Oxford, Rangiora, and Kaiapoi clearly demonstrate different layers of this legislation, and specifically clause 23, about the impacts of the earthquakes. So when you look at Kaiapoi, that was very hard hit. The impact of the earthquakes was very visible from the buildings. Then you go 15 kilometres to a town like Rangiora and you would look at the buildings on the high street and say that possibly they got away OK. But it was not until the buildings were inspected that they realised there were a lot of buildings under the 34 percent. Those investors or building owners invested heavily into those buildings to bring them back up to code.

So I think what we need is a very clear framework that gives people set times and expectations, because, being a Cantabrian myself, I probably would not have grown up in Christchurch thinking that we were at risk from such devastation. So we need some evidence-based approaches that will allow people to have a very clear framework of expectations. But it is not only that; it is then the continuum either side, and the provisions inserted by clause 23 clearly talk about that in terms of the polar ends of the continuum of buildings that possibly do not need to be included and buildings that need to be prioritised.

It probably sounds like common sense, but one of them obviously needs to be hospitals. I worked for the Canterbury District Health Board—not at the time of the earthquakes—and colleagues would tell me stories of how they responded and provided health care services in the hospital in Christchurch at the time. They told me that they needed to ensure people were safe when things were falling off walls and out of ceiling cavities. It is common sense that you need a very structurally sound building for the continuation of health care services in a disaster. That is why health and education buildings are prioritised. I think we have listened and we have learnt about the inclusion of unreinforced masonry in terms of prioritisation for buildings. We know that there were a lot of fatalities and injuries caused by that in the Christchurch central business district and we have seen that in the Rangiora high street as well.

Let us look at Oxford, another town in my electorate. It was affected, yes, with earthquake-prone buildings, but it does not have the commercial income that towns like Rangiora have. A lot of the farmers in that area are thinking about where they are going to find the money to fix up buildings or structures on their farms. Some structures would have no impact or potential harm to the public, so we see in clause 23 the exclusion of farm buildings, retaining walls, fences, bridges, wharves—there are probably not too many wharves in the farms in Oxford—tunnels, and storage tanks. So I think, overall, that clause 23 identifies the continuum and is not a one-size-fits-all approach. It is about understanding the best approach for that area.

EUGENIE SAGE (Green): Tēnā koe, Mr Chair. Tēnā koutou katoa e Te Whare. I am very pleased to take a call on the Building (Earthquake-prone Buildings) Amendment Bill. I would like to talk, in this call, about heritage buildings. Paul Foster-Bell outlined, in his contribution, clause 23 and the new section 133AT, which outlines how the owners of our most significant heritage buildings—those with category 1 status or listed in the National Historic Landmarks List—can apply to councils for an extension of up to 10 years to strengthen an earthquake-prone building.

The Wellington City Council is much further ahead than many other councils, obviously because of the earthquake risk in the city, in identifying earthquake-prone buildings. It has identified 684 pre-1976 buildings in the city. Of these, 137 have heritage listing but only 21 have category 1 status, so they would qualify for an extension of time under clause 23.

It was certainly a major concern of submitters—the impact of this bill on heritage buildings. One of the submitters, Phillimore Properties, noted that a large number of quite beautiful heritage buildings were on the market because their owners could not face the cost of earthquake strengthening and because, in cities like Auckland, the land values are often worth more than the buildings. So there is a very real risk of heritage buildings being demolished in the wake of the legislation.

That would be a tragedy for cities and towns across New Zealand because of the contribution that many of our older buildings make to their character and identity. You only have to think of areas like Ōāmaru, Invercargill, and the loss of heritage in Christchurch. That is one reason that the Green Party is supporting the bill, but we are also supporting Ron Mark’s Supplementary Order Paper 160, because instead of weakening the regulatory regime that the bill sets out to provide, as one of Mr Seymour’s Supplementary Order Papers does, we have got to provide more incentives to the owners of heritage buildings so that there is some recognition of the benefit that the community gets from the protection of that heritage character and to assist them with the costs of strengthening.

Certainly the larger metropolitan councils like Christchurch and Auckland have already been quite proactive. In Wellington the council set up a $400,000 fund for built heritage, which is likely to be allocated on an annual basis to assist with the cost of earthquake strengthening. Wellington City Council also offer rates relief if a building is left vacant while that strengthening occurs and offers some rebates on building consents. Similarly, in Christchurch there is a built-heritage fund to assist with conservation costs, which can include earthquake strengthening. But this is a relatively small amount of money given the many building owners who will be affected.

So Mr Mark’s Supplementary Order Paper 160 does highlight the quite significant gap in Government policy here, and I would welcome some comments from the Minister in the chair in terms of whether the Government is making any progress in considering some incentives for building owners for earthquake-strengthening costs associated with heritage buildings. Because, as Property Council New Zealand has pointed out, a building owner can claim a tax deduction for a building that collapses with the risk of quite significant injury or potentially death, but it cannot claim a tax deduction for the costs of strengthening a building so that that injury does not occur.

So what we are seeing at the current time is those costs of providing incentives to the owners of heritage and other buildings falling on local councils, and the Government not stepping in to actually help fill that gap. The Minister has said it would be premature to address tax reforms before the policy provisions around earthquake strengthening are in place and before the bill has passed. We think there could be a tax working party set up to address this issue, because, obviously, tax legislation was written before the whole issue of earthquake strengthening was considered. As I understand it, at the moment, you cannot claim a tax deduction for earthquake strengthening because the Inland Revenue Department regards that as a capital expense because it is enhancing the building. But once this bill passes, it will be a legal requirement.

Earthquake strengthening is actually providing for the functioning of the building, so it should not be regarded as an enhancement. Even if Mr Mark’s Supplementary Order Paper is voted down because it is ruled out of order, as the Chair of the Committee noted, because this is an omnibus bill—well, it is not an omnibus bill, sorry—we think the Supplementary Order Paper is very timely in highlighting a major policy gap and the fact that the Government needs to be giving some incentive, particularly for the owners of heritage buildings, to strengthen them. We have seen in Christchurch the very infamous comments of the Minister Gerry Brownlee, calling a lot of our heritage buildings old dungers, and that leading to their demolition after the Canterbury earthquakes. This Supplementary Order Paper, we think, is a very useful initiative in highlighting the policy gap.

In the rest of the call, I would just like to highlight that we are very pleased with the changes that were made in the Local Government and Environment Committee, and I have talked before about the very good process that both Ministers and Scott Simpson, the chair, undertook to ensure that there were good changes made. The Green Party opposed this bill as introduced, because it had far too generous exemptions for building owners for meeting the current fire and disability access requirements when undertaking earthquake strengthening, and we pushed very hard for changes here.

There were submitters who were very concerned about this. The Human Rights Commission said that it was just highlighting that we were undermining our good human rights record by this retrograde step of not ensuring that those disability access requirements were put in place. There were a lot of submissions that presented evidence of heritage and other buildings that had been upgraded to improve accessibility without diminishing their heritage fabric, and there was recognition by groups like Age Concern that making sure that buildings are accessible promotes the well-being of all of the population. Whether it is parents with pushchairs, or senior citizens, it does not just provide a privilege for people who are in wheelchairs, but it promotes well-being for all of us, and it ensures that there are equal rights for all. So this change in the bill has been quite critical to the Green Party now supporting the bill and its progress.

There will be some other comments I would like to make later, but we support the Supplementary Order Paper that Ron Mark has lodged, and we are very pleased with the changes around disability access. Thank you.

RON MARK (Deputy Leader—NZ First): In rising, I have to say that having listened to David Seymour’s speech earlier, one cannot help but empathise with some of the comments and observations he has made. In fact, the comment that there are risks in life, in general, which we face daily, was, I think, very pertinent. It is something that we have often dwelt on in regard to how far we go with legislation to try to curb risks, and what the economic consequences of that are to our ratepayers and to our taxpayers. I often wonder, if we were trying to build roads today for the very first time, how we would, under our current occupational safety and health laws, view the notion that we would separate two vehicles careering towards each other at 120 kilometres an hour by a piece of white paint. But we do—we have a piece of white paint on the road that, supposedly, is going to stop these two vehicles careering into each other at a combined speed of up to 240 kilometres an hour. But we do—we rely on that piece of white paint and we deem it acceptable that that piece of white paint is going to keep our road toll down. I would just say that we probably would not allow that to happen in this day and age, would we, under our current laws. So I think Mr Seymour does bring a degree of rationality to the debate with his views, although, clearly, not everyone is going to agree with his Supplementary Order Paper.

But my job is to speak to the Supplementary Order Paper that I have brought forward on behalf of New Zealand First—Supplementary Order Paper 160. I just want to restate that the Supplementary Order Paper does insert new clause 41C “to redress significant tax disadvantages faced by commercial, industrial, retail, and heritage property owners when looking to bring buildings above the earthquake-prone building threshold required by this Bill”. It does strike me as quite interesting that the Government would not support this Supplementary Order Paper, which—as chartered accountant firms like KPMG and others, Local Government New Zealand, and property owners have said—brings some sense and consistency to the Inland Revenue Department (IRD) when it comes to dealing with the tax deductibility of business costs.

We struggle a little bit here in New Zealand First with hearing daily how this Government wants productivity, wants to encourage business, wants to minimise red tape, wants to minimise compliance costs on businesses, and wants to ensure that earthquake-prone buildings are brought up to the new specifications as quickly as possible and that landlords—who have a lot invested in these buildings—are incentivised to do that. The only incentive I can see in the legislation, without Supplementary Order Paper 160, is a big stick, closing down buildings and forcing some landlords in places like the Wairarapa to boot their tenants out on the street if they do not have the money or the wherewithal to strengthen their buildings within the time frames laid down.

What is interesting is that we have gotten to this point in the legislation where, cross-party, we are all in agreement. There have been some massive changes to this legislation, to what was produced when it was first brought into the House. There have been some wonderful concessions made by the Government, by the Government members on the Local Government and Environment Committee; the Opposition has also moved into that middle ground, to a place where we have unanimity. Yet, on this simple issue of providing New Zealanders who have invested their money in purchasing buildings and have now had the misfortune of finding that those buildings are not going to be compliant with this piece of legislation that we are going to pass—they are being told by the IRD that when they so move to be compliant, they will have added to the value of their building.

They will not have added one shred—not one cent—to the value of their building. They will simply have repaired it to the standard required by this Parliament—repaired it, not improved it, not expanded its capacity or its capability. They will simply have repaired it to the standard that we are now saying, in this legislation here tonight, they must do. Why would we allow the IRD, in a rather narrow view, to not allow these people to treat those improvements as repairs and maintenance, and thereby accrue the tax deductibility concessions that we, in New Zealand First, believe in?

We are grateful for the support of the Green Party and the Labour Party, and of Mr Seymour from the ACT Party, that our view is the right view. I would like to seriously hope that before the end of tonight some Cabinet Ministers might have a quick chit-chat upstairs and have a think about it. Why would we need to wait for another piece of legislation to come through the House? Why would we need to put this off, vote this down, in the hope that in the never-never, somewhere along the line in some tax review, we readjust?

In the meantime, we have a whole bunch of people out there, and I can pick a few examples. We are very keen to preserve the fabric, culture, and the aesthetic appeal of many of our rural towns by making sure heritage buildings are looked after. We have made these concessions here, but not all of the buildings we are talking about that have high character value are considered heritage buildings. So what are we going to see? For many of these landlords it might well just be easier to run a bulldozer straight through the damn building—and there goes a cinema in Masterton that actually has typical rural appeal and high aesthetic value to that community. But if it turns out that the costs and the lack of any tax concessions make it easier for this owner to simply say “Well, I’ll tell you, we’ll knock it down and we’ll build a single storey building—you know, get a Skyline garage in and run our business out of that.”, that will add nothing to the cultural and aesthetic appeal of Masterton’s Queen Street. Or, for example, I can think of cinemas—what was the other one I thought of? We have got old pubs. All over New Zealand, in rural provincial New Zealand, you have some old pubs. They are not considered heritage buildings.

I would just hope that the Government would reconsider its earlier statement. This bill deals with an issue where, quite frankly, we think the IRD is out of control. Quite frankly, we think that this concession is an easy one to make for the Government. It does incentivise property owners to actually get on with the task of rebuilding. If it saves them a few dollars and encourages them to get stuck into the task earlier, if it actually saves them enough money to make it worth their while doing that building up and not knocking it over, then why would we not do it?

We know that we need some sanity injected into the way in which the IRD is interpreting the Act. We know that we need to give the IRD some guidance. We think that the Income Tax Act of 2007 does need adjustment, and we would ask that the Minister seriously consider and support this Supplementary Order Paper. I know, for one, that Local Government New Zealand, property owners throughout New Zealand, and accountants throughout New Zealand would think that this Government has made, this evening, a very wise choice and a wise decision. Failing that, we do not want to hear anything more about the Government and about how it wants to see tax cuts for businesses and how it wants to see concessions made to businesses and to property owners so that they can do the right thing, because without Government members voting for this Supplementary Order Paper, which is a very simple one, all of those words are quite hollow.

STUART NASH (Labour—Napier): I would like to just elaborate on some of Ron Mark’s points in his Supplementary Order Paper. I actually think it is a good idea for a number of reasons, and let me explain those, but let me provide a very clear “but” to what he said. First and foremost, as he alluded to, I am from Napier. There are two places where in the last 100 years people have died as a result of building collapse due to an earthquake: Christchurch and, in 1931, Napier.

Napier was completely rebuilt, from the ground up. A number of these buildings have not been designated heritage buildings for a number of reasons, but they were built like the proverbial. They were built not to fall down if there was another earthquake. So what we see in Napier is a whole lot of buildings where, if there is a massive earthquake, their structural integrity might be compromised, but these buildings are not going to fall down. There are a number of building owners there, and one in particular has a joke. He says: “How do you make a small fortune out of renovating old buildings? You start with a big one.”—a big fortune—because the cost of doing this, of getting it up to scratch, is immense.

We are very lucky in Napier that this one person in particular understands the heritage value and is a Napier man, born and bred, because the problem we have got, right across provincial New Zealand, is that often the cost of getting these buildings up to standard is actually more than the buildings themselves are worth. We have heard Wellington MPs speak and Christchurch MPs speak, but it is a different situation in provincial New Zealand. In Christchurch and in Wellington you can actually justify the cost of getting these buildings up to scratch because you know the yield you will get off these buildings is enough to cover the costs.

In fact, we have the former Minister for Arts, Culture and Heritage in the Chamber and I would love you to have just a 5-minute call, Mr Finlayson, to get your view on what should happen around heritage buildings that are maybe worth a couple of hundred thousand dollars but cost—

Hon Christopher Finlayson: It’s all over for me, now.

STUART NASH: Oh, it is never over for you—it is never over for you. In fact, you are in the ascendency, I would suggest. But it is a major issue in provincial New Zealand.

The member for Whanganui knows exactly what I am talking about, because there are examples of fantastic heritage in the main central business district, but the cost of getting those buildings up to compliance is such that I would bet a number of landlords are just not even going to go there. So there are two options. As Mr Mark suggested, they pull them down and they build something else, but what I suspect will happen in a lot of the smaller towns—and I was in Eltham recently; there are some beautiful old buildings there—is that they will just walk away from them. They will just say “It’s not worth it to me. I’ll walk away.”, so what we will end up with is these ghost towns because the buildings themselves are just not worth the price of even demolishing them. So the council, at some point in time, will end up having to take responsibility.

Mr Mark’s Supplementary Order Paper 160 brings up a very interesting point, and that is capitalisation versus expensing. But what I would really like to know before I, certainly, as our revenue spokesperson, make any comment on this is: what would be the fiscal cost of actually doing this? Because there would be a substantial cost. Let us understand what that cost is and then, once we do that, I think we could have a much more educated conversation around whether we want the Inland Revenue Department (IRD) to take this further. If it is literally millions and millions of dollars, that is a different question, as opposed to if it is not so much. So let us see whether we can get that quantified. I would like to ask the Minister of Revenue if, in fact, he would instruct the IRD to do some work around this, because I think it is very relevant and it is worth it.

The second thing I would like to talk about is Supplementary Order Paper 152 in the name of the ACT member, Mr Seymour. The reason for this is that I actually think that this is a good idea. We talk about managing risk, and we can always manage risk. We can mitigate risk; we can never eliminate risk. But in this bill, if we look at new section 133AC inserted by clause 23, it talks about the meaning of a “priority building”. Subsection (1)(b) talks about “a building that is likely to be needed in an emergency for use as an emergency shelter or emergency centre:”. I would suggest that that includes churches and sporting facilities like, for example, racing clubs that are used rather infrequently.

But I come back to the previous point—and I agree with Mr Seymour on this—which is that we are talking there about buildings that are used infrequently. Hawke’s Bay Racing might have—I do not know—five or six meetings a year, but its clubrooms are certainly not used on a regular basis. Yet with this legislation, as it stands, I would suggest that the cost of rehabilitating the Hawke’s Bay Racing clubrooms would be prohibitive, as it would be with a number of churches around the place.

So we are talking about high-priority buildings under the definition in the Act because they could well be used as a shelter, but we are also talking about buildings that are not used that often. So we are not talking about office blocks or anything like that, which are regularly tenanted. We are talking about buildings that have irregular usage, but—and this is where the “but” is—might be a little bit earthquake-prone. So, like Mr Twyford, I approach this with a very, very open mind, and, in fact, being from provincial New Zealand and understanding the costs and the issues around this, I have a tendency to support it.

I know that the Minister in the chair is not the Minister responsible for this bill, but I was sort of hoping that during the dinner adjournment the officials had a bit of time, had an hour and a half, to consider some of the points that Mr Seymour brought up and perhaps, through the Minister in the chair—even though, as mentioned, I accept she is not the Minister in charge of this bill—could provide some answers to this. I think there are many people right across provincial New Zealand, and, I certainly know, in my electorate, who are looking at this Supplementary Order Paper and saying: “This is pragmatic.”

Let me make it clear: we do not want people in buildings that are liable to collapse if a wolf blows on them. There has to be an element of safety in this, but again I come back to some of the buildings. I know that before the Christchurch earthquake the University of Canterbury was doing a whole lot of work around the structural integrity of wooden buildings. What was found is that wood in fact has massive structural integrity. I know that in the Napier earthquake a whole lot of chimneys fell down. The houses moved quite a lot, but they did not fall down. But under this definition here, I do not see wooden buildings mentioned—I suppose you cannot.

I know that Mr Twyford brought up some very interesting questions about the logistics—how we do this. I do not think that is a major issue to overcome, because what we are asking councils to do is to take the bulk of responsibility for this. I think that if we said to our local councils or the territorial authorities responsible for this “Hey, this is just another part of the bill. It’s another part of the legislation that you’re in charge of policing, or that you have responsibility for.”, then they would take that on, and they would develop a type of register or database, or whatever was necessary, to make sure that this part of the legislation was enacted.

That is all I will say for now, but there are some very important questions that do need answering. I think Mr Seymour has introduced a common-sense Supplementary Order Paper, but there are some questions. Thank you very much.

The CHAIRPERSON (Hon Chester Borrows): David Seymour—final call.

DAVID SEYMOUR (Leader—ACT): I would just like to briefly address some of the comments made about the amendment I have on the Table, Supplementary Order Paper 156, and also Mr Mark’s proposed amendment, Supplementary Order Paper 160. Can I preface these comments by saying that the simplicity of New Zealand’s broad based - low rate taxation system is one of the best pieces of public policy that our country has. I understand that on measures of revenue raised versus the rates imposed, it is in the top three in the developed world. We should be very, very cautious about any proposal that will erode the tax base and, therefore, erode that great competitive advantage that our country has.

However, when it comes to the definition of whether or not a particular piece of expenditure is capital expenditure, we find ourselves in a position where either this House or the Inland Revenue Department has to make a positive decision and define it one way or the other. As Mr Mark said, the person who brings their building up to standard has not had an increase in capital, unless you assume that the purpose of this legislation is to lower the capital stock right across New Zealand, and I do not think for a moment that that was the Minister for Building and Housing’s intention. Therefore, I think that I am very inclined to support Mr Mark’s amendment, in particular because we have not had the opportunity in this whole Committee stage to hear from the Minister in charge of the bill and hear what his rebuttals might be, whether this proposal been considered before, and, if it was, why it was rejected, so that members might consider those issues, as well. It is unparliamentary to speak of the absence of a member—

The CHAIRPERSON (Hon Chester Borrows): Then do not.

DAVID SEYMOUR: —but, hypothetically, if the member were present, he might have done a number of things. He might have addressed the debate that many people around this Chamber tonight would like to have. He might have demonstrated empathy and a genuine concern for the imposts that this Government puts on New Zealanders and their property through regulation. That would have been a very positive contribution to make, but I digress.

In respect of Supplementary Order Paper 156, Poto Williams raised a very good question about how that particular amendment would function in the case where there are multiple buildings. The scenario she may have had in mind was the scenario where there are two adjacent buildings, one of which is very seldom used but somewhat earthquake-prone and is next to another building that may be more frequently used, and the collapse of the former building may mean that it had additional impact on life risk by collapsing on the latter building. I think there was an implicit assumption in what the member had to say, which was that the life risk calculated for a particular building pertains only to people within that building.

Upon reviewing the amendment, I can give a much better answer than I did before the dinner break, which, I have to say, was uncharacteristically stilted. It is very clear that in new section 133AZAA(2)(f) on my Supplementary Order Paper we have the reference to the “location in relation to other buildings or building types;” being part of the methodology used to estimate the probability of injury or death referred to in this amendment. So there is an explicit reference to that concern that Poto Williams had, and I apologise that I did not point it out earlier. But it was a very good objection, which certainly stumped me for a second.

Finally, in the beginning of the proposed amendment—and, actually, in several places throughout the Supplementary Order Paper—it talks very clearly about the potential risk to life; never expressing life in a particular building that is being assessed. So I believe that that objection, although very plausible, is well answered within this amendment. In closing, I am mindful that this is—

KRIS FAAFOI (Labour—Mana): I will be concentrating my comments on the Building (Earthquake-prone Buildings) Amendment Bill to new section 133AA in clause 23, about which I think David Seymour has a Supplementary Order Paper, but I will come back to that later in my submission. This is a necessary piece of legislation. I acknowledge all the Christchurch members of the Committee, but also say, being a Wellington member of this Parliament, that because we are in a high-risk area we are also very aware of the need for this legislation.

New section 133AA points out some buildings that are exempt from the purview of this piece of legislation. We are taking this bill as one question, and I am very happy about that because it gives me the opportunity to pose some questions to the Minister around section 133AA from a layman’s point of view. I was not on the Local Government and Environment Committee, and I realise that the Minister in the chair, Judith Collins, is not the Minister responsible for this piece of legislation, the Minister for Building and Housing, but I note that there are some officials who might be able to help us because I think there might be some valid questions from the public out in New Zealand about some of the exemptions here. I certainly am looking at some of the exemptions and scratching my head.

If it is not the territorial authorities that are responsible for looking after these, I guess you can say, buildings, or entities, then who is? Subsection (1)(a) talks about a building that is used “mainly for residential purposes”, unless it is two storeys and used as a boarding house, a hostel, or specialised accommodation—I can understand that. Paragraph (b) is “a farm building”, and I guess that is probably some intervention by Federated Farmers. We also have paragraph (d), which is “a fence:”—I can understand that. Paragraph (e) puzzles me a little bit. It is “a monument (including a statue), unless the monument is capable of being entered by a person:”. That may sound strange, but my own Anzac memorial in Porirua is quite a large memorial. It is probably about the size of just up to the roof here. I would be worried if that was not necessarily sound. It was erected by the Porirua City Council, so who is actually responsible for making sure that that is not earthquake-prone? God forbid, you would hate for that to come down and fall on somebody.

The next one is paragraph (f), which is “a wharf:”. If the territorial authorities are not responsible for the sturdiness of the wharf, then I would like to hear from somebody in this Parliament as to who is. There may be a simple explanation for that that was explained in the Local Government and Environment Committee, but I cannot see in this piece of legislation who is responsible for a wharf. With Wellington being a port city, there are a couple of wharves in Porirua, there is a big wharf in Pētone, and there is quite a sizable wharf in Wellington. Who is actually responsible for making sure that wharf is not earthquake-prone or is up to standard, because, according to section 133AA, a wharf is exempt?

The next paragraph, paragraph (g), is “a bridge:”. If I were driving over a bridge or walking over a bridge when an earthquake hit, I would like to think that someone had checked that bridge to see whether it was up to code. Again, maybe the officials could help us. I hope that there is a simple explanation about this and that someone is looking after that. Maybe it is the New Zealand Transport Agency, but if it is not the territorial authorities, I would like to know who it is. Unfortunately, we are only up to paragraph (g).

The next one troubles me a little bit more. It is paragraph (h), which is “a tunnel:”. A tunnel is not somewhere where I would like to be if an earthquake hit. There is one tunnel I travel through regularly, the Karori Tunnel. It is only a small tunnel. It is an older tunnel—probably the oldest tunnel in the Wellington area—and if an earthquake were to hit I would not like to be there, but if someone told me that it was OK, I would feel a lot safer. Unfortunately, under this piece of legislation a tunnel is exempt, so if someone could tell me what the story is with a tunnel—I would hope that it was the New Zealand Transport Agency that was responsible for that, but can someone please tell me who is responsible for tunnels. Paragraph (i) is “a storage tank:”. That may not be such a big thing if it only a 100-litre tank, but there are some very big storage tanks out there in our communities, I know.

MOJO MATHERS (Green): The focus of my talk tonight will be around the improvement that the Local Government and Environment Committee made to the clauses around upgrading fire and disability access. This was absolutely critical to the Green Party for securing our support for this bill. Originally, the bill gave a very broad exemption to building owners for providing and upgrading fire safety and disability access when undergoing earthquake strengthening. The exemption was so broad that you could have driven a bus through it, and it would have set back the modernisation of our building stock by many decades. This was a major concern not only for us but for many of the submitters on the bill as well.

CCS Disability Action and Disabled Persons Assembly did a very strong submission that was endorsed by 15 other disability and community organisations. They really highlighted some key points. The submission highlighted the fact that the Building Act already enables considerable exceptions around fire and disability access requirements. It made the point that the case that had been built for a law change was very unconvincing because there was already flexibility in the law to grant an exemption if it was going to be too financially arduous for building owners to provide these, or if it was physically impossible for them to provide the required upgrades. In fact, of all the submissions on the bill that I sat through on the select committee, there was only ever really one concrete example of a building where the building owner walked away from the building because they did not want to pay the cost of fire safety upgrades. They claimed they were too expensive, but, actually, an exemption could have been provided for in that case. So it seems like the scale of the problem that originally justified the rationale for providing this massive loophole was actually not grounded in reality.

The submitters also gave examples of statements being made by many companies that highlighted the misconception that exists out there in the sector around the purpose of providing disability access. They seemed to think that it is all about if you have got a person in a wheelchair, then it is solely for the benefit of that person in the wheelchair. They seemed to be failing to recognise that, actually, if you have universal access, then it benefits all the users in the building, and not just, potentially, someone in a wheelchair. It is also about building a society that is genuinely inclusive and genuinely enables equal access to employment and participation in society.

One of the major telecommunications companies, Chorus, was saying: “Oh, we’ll never need to provide disability access”. It was failing to recognise that, actually, as a major employer it should have accessible buildings because then it could ensure accessibility not just for someone who has a permanent disability, but if one of its employees became injured and wanted to return to work in a wheelchair, they would want to continue to work in the same place. You can enable that continuity of employment if you have undergone earthquake strengthening—you can upgrade disability access at the same time. The New Zealand Institute of Architects made just that very point—that there is a false economy in proposing that you exempt parts of the Building Act when undergoing earthquake strengthening, because it represents a lost opportunity not to undergo that work at the same time, which would actually streamline costs and save money in the long run, as well as building a building stock around the country that is both safe and accessible. Surely, that is what we want as a society.

What the clause is now has much greatly tightened what was an enormous loophole and, basically, said that we are going to allow exemptions only on a case by case basis. Basically, what happened here is that the committee picked up the wording that was proposed by the Human Rights Commission, and the legislation now allows the territorial authorities to grant an exemption from a full upgrade of fire and disability access only on a case by case basis in limited circumstances and, in particular, the building owner must demonstrate that full compliance with fire and disability upgrades would be unduly onerous.

In the commentary we have noted that it is not intended that financially capable building owners will not undertake the disability upgrades, because that is what is happening at the moment. We have been seeing this in Christchurch, where last year the Green Party was looking for offices. We wanted accessible offices in Christchurch, and what we discovered is that there are very few accessible offices in Christchurch and that there are, unfortunately, building owners and developers who are using every trick in the book to get out of providing full disability access and meeting their obligations under the Act. It was leading to some quite bizarre situations.

For example, there was one building where all that was required was a simple ramp at the back entrance and we offered to actually pay for that upgrade ourselves. The building owner declined to have his building made accessible because he would lose $30 a week from a car-park that would be taken up, in part, by the ramp. That was a major property developer.

So when I hear stories about “Oh, property developers can’t afford that money.”, I kind of have to believe that sometimes I am quite cynical, because, actually, we have encountered the opposite, where property developers could absolutely afford to provide that upgrade and choose not to. That is why it is very important that the regulations and guidelines that will be developed under this bill absolutely do address and uphold the spirit of what the committee agreed to—that financially viable property developers would be required to be compliant with fire safety and disability upgrades when undergoing earthquake strengthening. There are a number of these developers, as well as those who may genuinely not be able to afford that. So the regulation provided for in this bill gives the opportunity to strengthen and tidy up the bit of a dog’s breakfast that is happening in the inconsistency around the country with stipulating what the requirements for upgrades are.

I also notice that the Department of Building and Housing is developing a plan to ensure that building owners are better informed about the legal requirements and about what universal access involves—what are the needs of disabled person when entering buildings—and to ensure that there is better information spread around the building owners, building developers, and designers, and all the people involved in ensuring the built environment around us. I understand that work is under way at the moment, and it is absolutely critical that that work continues and it gets implemented because it will make a huge difference to the day-to-day lives of people trying to get around the city, trying to access employment, and trying to access services. They cannot do that if they are treated like second-class citizens. That is why we are very pleased that the committee listened to the submitters and made the appropriate changes in the bill, and why it is a pleasure to now be supporting this bill because of these changes that were made. I want to thank the committee for listening to the submitters, taking their concerns on board, and supporting these changes to be made.

KRIS FAAFOI (Labour—Mana): That is very generous of you, Mr Chair, to give me another opportunity. I do thank you for giving another member the call. It gave the Committee 5 minutes and the Minister an opportunity to see whether any of the questions I posed could be answered. Because they have not been answered, I would just like to continue with the last few examples of new section 133AA, in clause 23.

Just as I was finishing up last time, we were discussing storage tanks. If they do have tens of thousands of litres in them and are perhaps on the top of a building or at the top of a hill, you would be concerned if their structural integrity was not up to standard. So, again, I pose the question—if the officials could be useful—as to who is responsible for making sure that those storage tanks within new section 133AA are up to standard, and why they are exempt.

The next two examples that are specifically laid down in new section 133AA troubled me some more as well. Again, there may be a perfectly good answer for this, but in new section 133AA(1)(j), the item that is exempt is “a building that is a dam.” If an earthquake were to hit and the structural integrity of a dam was not necessarily up to scratch, and someone was charged with making sure that it was up to scratch, I would hope that someone was looking after it. It could be the fact that it is a simple answer, and it is that the power generator that is responsible for that dam is responsible for making sure it is structurally OK. But I cannot see that, and I would potentially like an answer from the officials. And paragraph (k) also says “a part of a building that is a dam.”, which I think goes to continue on our concern there.

I would like to turn now to Supplementary Order Paper 152 under the name of David Seymour, which looks to add to the list of exempt buildings by including a new paragraph (l), and that is “a building located in an area of low seismic risk.” Is that correct, Mr Seymour?

David Seymour: That’s right.

KRIS FAAFOI: OK. I think there are two ways to look at this. I think, as one of the members on this side of the Chamber said, if you look at it in the sense of being in a low-risk area and it is not quite up to code but it could be expensive to get it up to code, and doing so might not improve the safety of the building and risk to people, then you might look at it in a pragmatic way and say: “Hey, is it really worth doing this in a low-risk area?”. I think building owners might think: “Do we need to go to this expense? We’re in a low-risk area. If something catastrophic does happen, it’s not going to make much difference. Why do we have to pay this money out?”.

I guess you could look at it from another point of view as well, and say that if someone was in a high-risk area and is in exactly the same position of, I guess, the percentage of code compliance, they could say: “Well, I’m in a higher-risk area, I’m 25 percent and I’m not up to code. Why should I have to do this if someone in a low-risk area doesn’t have to do it?”. I do not know whether the member’s Supplementary Order Paper is going to get across the line—I wish him luck—but I guess there are two trains of thought as to whether or not that should be included in this piece of legislation.

I do not want to take up too much more time, but I hope that the officials can take the opportunity to answer some of those pretty basic questions around new section 133AA because they are exemptions. They will not be caught under this bill, and I think if someone at home was to read the list, they would be a little bit troubled, as am I.

LOUISA WALL (Labour—Manurewa): Kia ora, Mr Chair. Thank you very much for the opportunity to contribute to the Committee stage debate on the Building (Earthquake-prone Buildings) Amendment Bill. Firstly, I want to acknowledge that this bill stemmed from recommendations made by the Canterbury earthquakes royal commission in volume 4 of its final report, which was released by the Government in December 2012. The recommendations focused on the legislation, policies, and practices underpinning New Zealand’s approach to earthquake-prone buildings in the wake of the Canterbury earthquakes.

I specifically do want to focus most of my contribution on Supplementary Order Paper 152 by David Seymour, and his wanting to add after new section 133AA(1)(k) in clause 23: “(l) a building located in an area of low seismic risk.” It is relevant for my electorate because the examples used are Auckland, Northland, and Dunedin. So, as an MP based in South Auckland, obviously it is highly relevant to my community.

One of the things you do when you are given an opportunity to speak on a bill that is actually incredibly technical—I want to take the opportunity to also congratulate the Local Government and Environment Committee on going through a process of being able to present a piece of legislation to the House that fulfils those recommendations of the royal commission, because I can see that it was a highly technical bill. The next piece of information I am going to share is actually highly technical, as well.

What I did was find a GNS Science report that was presented to the senior hazards adviser of Auckland Council, and it is titled “Benefits of strengthening earthquake-prone buildings in Auckland” and is dated 18 February 2014. The interesting thing about this piece of evidence, as I will call it, that is relevant is that what it went through was an exercise of identifying all the deficient buildings in Auckland. Believe it or not, there are 526,000 buildings in Auckland, and what it found was that there were 9,794 buildings that were deficient. What it then went through was a process of modelling that asked, if we were to look at—and this is where it becomes really interesting—earthquakes in a 200,000-year-long, synthetic catalogue of earthquakes and if we were to look at buildings that were not strengthened, and then if we were to actually strengthen these 9,794 buildings, what would the impact be?

I am going to read it out because it is actually incredibly fascinating. What it, essentially, says is that for the buildings that have not been brought up to standard, I suppose, every 10,000 years there is a probability, or a chance, of a severe earthquake that is 0.0001 percent, and within that category there would be 107 deaths, there would be one critical injury, there would be 71 serious injuries, and there would be 922 moderate injuries. The other interesting statistic is that, in fact, of those 526,000 buildings, 87,755—or 17 percent of the total buildings—would be affected. So at the high end of the spectrum, 107 people would die.

At the low end of the spectrum the probability of an earthquake every 200 years is 0.005. There would be two deaths, zero critical injuries, four serious injuries, and 61 moderate injuries, and 12,663—or 2.4 percent—of the buildings would be affected. These are buildings where, for those 9,794 buildings, we did nothing to them—so we did not do anything.

Here is where it gets really interesting, because the next modelling is, OK, if we made all those deficient buildings sound, and these are the statistics. For the most severe—so, a 0.0001 percent chance every 10,000 years—there would be 104 deaths, so it is actually only a reduction of three deaths. There would be one critical injury, there would be 69 serious injuries—a reduction of two—and there would be 890 moderate injuries, which is a reduction of 32. At the low end of the spectrum where a person might die—0.005 percent probability every 200 years—there would be two deaths, there would be zero critical injuries, there would be four serious injuries, and there would be 60 moderate injuries, which is a reduction of one in moderate injuries.

So I think that when you look at those statistics, it is interesting. I actually think David Seymour has brought an incredibly important issue to the table, and his Supplementary Order Paper, therefore, based on this evidence, should be supported, but with one caveat. It is a caveat in the report itself, which says that there are some shortcomings in terms of the modelling. This, in fact, reinforces what my colleague David Parker said. It was very hard to estimate casualties arising from the fall of wet brick chimneys, architectural ornaments, and unbraced parapets. Although, overall, the results of this particular piece of research say that the earthquake risk in Auckland is small and that the benefits of upgrading earthquake-prone buildings to a minimum of 33 percent of the new building standard are very small, it also must be remembered that the earthquake risk in Auckland is not zero and that these chimneys, architectural ornaments, and unbraced parapets should be classified as dangerous. I guess that is the lesson from Canterbury. As my colleague Poto Williams says, maybe there is some merit in actually doing something about those items on some of our buildings.

My contribution, really, is in support of David Seymour’s Supplementary Order Paper. It is going to be interesting to see how it is voted on throughout the evening, but I have really appreciated the opportunity to do a bit more investigation into this piece of legislation. It is a very serious issue. I have lots of aroha for the people of Christchurch, but obviously this piece of legislation is relevant to everybody, and so the contribution that I have made hopefully will provide some relevance to the people of Tāmaki-makau-rau. Kia ora.

NUK KORAKO (National): Kia ora, e Te Kaiwhakahaere. It is my pleasure to make a contribution on the Building (Earthquake-prone Buildings) Amendment Bill. It is really interesting when we hear a lot of the talk from people who do not come from Christchurch but are speaking. I think that what I am hearing is something that we have seen a lot of in Christchurch ever since 2010, and it is called cherry-picking. It is about taking different points or facts and then trying to contribute to changing this legislation. If we go back to the Christchurch earthquakes we will remember that the first one was back on 4 September 2010—and these are the major ones, the major events. The main event, as we know, was on 22 February 2011. The next one was on 13 June 2011, and the next one was on 23 December 2011. Then, of course, this year there was another major one, which we call the Valentine’s Day earthquake or event.

What I am talking about here is looking at the pathway of this bill, right from the Local Government and Environment Committee. There were so many specialists, engineers, and victims who came to submit, and so when we look at this legislation, we see that there was a lot of work done by the select committee. I hear different speakers talking about trying to change the balance. The main change is a varying timetable that is used for strengthening relative to earthquake risk. So then we are looking at the high, the medium, or the low risk. Then there was the prioritisation of public buildings—schools, emergency services, and all of that. That was well-thought-out, and this was part of the balance. Then there was a reducing of the number of buildings that were covered, and Kris Faafoi went through the list of those buildings that were exempt.

If you were at the select committee you would have heard the reasons why these buildings were exempt. When you talk about a tunnel, what you have got to understand is that the epicentre of the February 2011 earthquake was at the Port of Lyttelton, and the Lyttelton Tunnel was probably one of the safest places to be in. Two or 3 days later the tunnel reopened. So I am just looking at those sorts of reasons for exemption—the situation with these exempted buildings.

Let me come to where I am based, in the Port Hills. When we look at the Port Hills, we have got Halswell to the western side, which was hit in the Darfield earthquake, which was in 2010. Then from there, if we keep moving east, what we are seeing is we get to Somerfield and Lower Cashmere, and then we continue through, heading east, to where 20 percent of the buildings are still looking for resolutions. Those buildings were damaged or destroyed, and come under this legislation because of the fact that they were in the February 2011 earthquake and events after that.

What I am saying here is that we have got to manage the actual safety factor and then balance it with the actual costs. What is being said here, even around the amendments, is that it is not conducive to the information that we received as a select committee, and this is the reason. What you are seeing is a reflection here, in this legislation, in terms of why we have done what we have done. The situation is that we have got to manage the cost of strengthening. The other part of it is when we bring in the facts around historic buildings or heritage buildings. That is another difficult part. But right throughout this whole thing, the thing that we did not have at the beginning was an information database around these heritage buildings, these historic buildings.

It is really interesting when you talk about the fact that a lot of those buildings are not used much. We are talking about racecourses, farm buildings, and all of that. If a racecourse is used only five times a year—and someone has quoted that usage time—what has been found is that the upkeep and the maintenance has not happened. You will find that a lot of those buildings are probably a bit more dangerous than we think.

Finally, I come back to the cherry-picking. We talk about Auckland and we talk about Wellington. When you look at Wellington, you see that Christchurch was never in that really high seismic risk area—Wellington was the one. People can say that Auckland is not going to get hit, and that such-and-such a place is not going to get hit, but you actually have to come back and listen to the experts, listen to the scientists, and they will tell you exactly and bring you back to this bill. A lot of work has been done on this bill. This bill should suffice and go through. It is common sense. Kia ora.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Indeed it is an honour, as a neighbour of Canterbury, to get up and speak on this piece of legislation, the Building (Earthquake-prone Buildings) Amendment Bill, and acknowledge, I guess, and respect the terrible tragedy and the loss that that region incurred.

This piece of legislation, of course, is a somewhat pragmatic approach to dealing with the issues of earthquake risk. As is said here, “The intent of the bill is to balance the protection of citizens from earthquake-prone buildings:”, keeping in mind the primary objective of protecting life. But we do hang around in buildings quite a bit and so we just have to make sure that we are in reasonably safe buildings.

The legislation does differentiate what it calls high-risk or priority buildings from others, and I want to make reference to priority buildings because in my particular case, the West Coast is where indeed it has always been forecast to be the centre of the biggest earthquake that is about to come. In fact, we have many reports saying that our sitting on the fault line means that we are probably more likely than other places in New Zealand to have the big quake. So what we have is a hospital, which is a priority building by virtue of this piece of legislation, and in 2012—in fact, I think it was July—the National Government Minister Tony Ryall sent out a press release saying that there was a section 124 notice on Grey Base Hospital. That means that it did not meet 34 percent of earthquake standards.

Indeed, this legislation goes to address those tricky issues around existing buildings. Indeed, many parts of Grey Base Hospital meet only 12 percent—12 percent—of earthquake standards. By any person’s measure it is not safe. Indeed, it is somewhat ironic that when people go to a hospital for safety, they walk into a building—and, in fact, the emergency department at Grey Base Hospital meets about 12 percent of earthquake standards. So you kind of toss up, if you are in a car accident, whether you stay in the car on the side of the road or you go to the hospital. That is perhaps a little bit extreme—the point being, though, that the Minister and others have acknowledged the need. They have said that bringing the buildings up to meet the requirements in this piece of legislation and previous legislation to ensure personal safety cannot really be done, and so they are going to have to build a new hospital. We welcome that initiative.

The question is—and I want to ask the Minister in the chair, the Hon Judith Collins, to say, although I am talking about a new building, whether the principles and precedents laid down in this legislation around priority buildings mean that in building a new Grey Base Hospital we should have a priority building standard? That is Importance Level 4, or IL4, which means that the building will stand up and protect life in a big earthquake. But, in fact, the bureaucrats in the National Government have said: “No, you can have an IL3.” Well, what does that mean? That means that the building will stay intact, but you had better get out of it after the first earthquake because there is no guarantee it will stay up after the next one.

Indeed, what is going on in Greymouth is that we are building a new recreation centre with two basketball courts—quite a big building. That is built to Importance Level 4 standards. So what is going to happen is that, in spite of our best intent here to protect life in existing buildings, the Government is building a hospital to Importance Level 3 standards, which are less than what we would expect through this piece of legislation. This is because the legislation identifies priority buildings and says that it is up to the local councils and others to work out risk assessments—and I think that is very, very fair. But what we have got is territorial authorities, and in this case the Grey District Council will have to report on Grey Base Hospital as it is now and as it might be built.

Aside from all the other buildings that will be caught up in this legislation, I accept the wisdom and the general purpose of it. But we have to accept the precedents that this will lay down, and, indeed, if we do have hospitals as priority buildings, then I would expect the West Coast people to be able to get an Importance Level 4 hospital, the same as the people in Canterbury—

Hon JUDITH COLLINS (Minister of Corrections): I have been listening to this, and it has been really interesting tonight. Just a couple of things. There have been some, I thought, genuine questions from some members of the Opposition who obviously were not on the Local Government and Environment Committee, because otherwise they would have raised the issues in the select committee and they would have got the answers from the officials, or, if they were on the select committee, they were clearly not taking much notice. The officials have said to me tonight and have assured me in relation to tunnels—which is apparently an issue of great importance to people, and I think that is an absolutely genuine issue—that the New Zealand Transport Agency has more rigorous standards, which it complies with, in relation to tunnels than are actually covered in this bill. I am sort of surprised that the members who did ask the questions did not ask those of the officials on the select committee, although perhaps some of them were not on there.

Kris Faafoi: I wasn’t on it.

Hon JUDITH COLLINS: You were not on there, like I said. The other question was about railway bridges. Apparently, KiwiRail, under its legislation, has more onerous requirements on it than are in this bill. So I think that that is actually a really good answer, I thought, from officials, and I am happy to share that with the Committee because I do not want anyone staying up all night worrying about that.

STUART NASH (Labour—Napier): It was good to hear the Minister in the chair, the Hon Judith Collins, clarify some of those points, because they were very important issues that Mr Faafoi raised. Now we can sleep at night, or in tunnels, if there is going to be an earthquake.

I would like to just raise a couple of issues around process and the expectations that the Building (Earthquake-prone Buildings) Amendment Bill sets for local government authorities. If we look at new section 133AB, “Meaning of ‘earthquake-prone building’ ”, it goes through what constitutes an earthquake-prone building. We have talked enough about this. But the interesting thing is subsection (2), which says: “Whether a building or a part of a building is earthquake prone is determined by the territorial authority in whose district the building is situated:”. That makes sense on one level because there is a lot of complexity here, and there is an immense amount of work to be done.

Let us make an assumption, which I think is probably reasonably true, that a territorial authority has the greatest ability to determine whether a building in its own district is earthquake-prone or not, or whether it could be. It knows its district better than anyone else, so why not put the compliance back on it? I do have a slight concern about this, though, because I think that what this will do is load significant cost on to a council. Obviously, it is not going to get compensated in any way, shape, or form for this. It is going to need to employ a whole lot more people, and that means a rates rise. Well, that is maybe the cost we have to pay for living in a civilised society and in buildings that are safe for citizens to live in, but let me work through the process on how this going to work.

New section 133AF is about identifying earthquake-prone buildings. This is the responsibility of the territorial authority. First and foremost, the council’s time frame will depend on whether they are in a high, medium, or low seismic risk area. It also depends on the priority of the buildings, for example. What has to happen is that, until the end of the applicable time frame—and I will get to that in a minute; that is new section 133AF(2)—the territorial authority must report to the chief executive on the progress in terms of identifying buildings or parts of buildings within its district. So if the whole district is low seismic risk, then the territorial authority has to report to the chief executive officer on progress every 3 years. Let us not get confused: that is not progress on completing the task; it is just progress. If it is a medium seismic risk but with no areas of high seismic risk, then it is every 2 years, and if the district includes an area of high seismic risk, then the territorial authority must report to the chief executive officer every year.

The next clause is interesting, because I am not too sure why it was put there. It says in new section 133AF(3): “After the end of the applicable time frame, a territorial authority may, if has reason to suspect that a building or a part of a building in its district may be earthquake prone, identify the building or part as potentially earthquake prone, whether or not by reference to the EPB methodology.” This is a clause that has been inserted so that if a council or a territorial authority believes that a building may be earthquake-prone, it can actually require an owner to undertake a seismic test without going through the proper methodology. So what this could do, in effect, is to impose a cost of—I do not know—$5,000, $10,000, $15,000, or $20,000 on a building owner without going through the methodology set out in the Act, which I think is a little risky when we do this. This is because we have set down a methodology, but then we are saying “But if you don’t like it or you have concerns, don’t worry about the methodology.”, which is a little bit of a concern to me.

If I look at new section 133AF(4) of this bill and the “applicable time frame”, when I talked about being within the applicable time frame, this is the period commencing on the day on which, obviously, the Act comes into force. So for each area of low seismic risk, the expiry is 15 years after the commencement date—it is a long time. For an area of medium seismic risk it is 5 years for priority buildings and 10 years for other buildings. In an area of high seismic risk, it is 2 years and 6 months for priority buildings and 5 years for other buildings, and we have talked about the definition of “priority buildings” and other buildings. In an area of high seismic risk—and let us take Wellington, for example. It is a big city. I am assuming there are a lot of buildings here that are classed as priority and a substantial amount of buildings that are priority buildings, and the council has probably started this process anyway. But it has 2 years—

RINO TIRIKATENE (Labour—Te Tai Tonga): It is a pleasure to take a call on the Building (Earthquake-prone Buildings) Amendment Bill—my first call. As a member representing my constituency in the Canterbury region, I know how very important this piece of legislation is. Can I acknowledge all of the work that has been undertaken by the Local Government and Environment Committee and all the work done prior that has led up to this piece of legislation.

With this legislation we are dealing with buildings, we are dealing with earthquake-prone building assessments and the like, and it is very lifeless. We are dealing with inanimate objects. The bill talks about structures and buildings and the like, and I just really wanted to add another dimension to the buildings.

If we look at the Christchurch earthquakes and, in particular, the role that the marae played in the immediate aftermath of the big earthquake in February 2011, especially. The marae—in Christchurch especially—were a focal point, were a refuge, and were a rallying point for the whole community. A lot of emergency services were based out of those marae. Two in particular that come to mind are Rehua Marae, right there in the heart of Christchurch, and also Ngā Hau e Whā, out in the east. Those marae withstood the full force of the rū—of the earthquake. Not only that, they withstood the earthquakes, and then also provided a valuable service to the communities. And they are still doing so.

It is the reference to buildings—in Te Ao Māori a wharenui is more than just a building. It is representative of our tūpuna. If we look at all the various parts of a marae, they are the parts of the body of our tūpuna, so there is more than just a bare-boned, inanimate-type object that we are referring to in this legislation. I think that is what this legislation fails to do—it fails to address the extra spiritual meaning that is applied to buildings.

Every building, I suppose, has a blessing to open it and the like. No matter what culture you are from, that is a very important part of the life force—of the mauri—of the house. When we look at wharenui, in particular, in all their respective parts, in the kōrero every part of the wharenui has a story—it signifies a tupuna, an ancestor. It is all very, very important. Likewise, if we look around this House of Parliament, this House is a war memorial, and this House, obviously, is representative of the supreme lawmaking body of the land, and it has its own history and tikanga in itself. What I am saying is that that dimension of buildings is not captured within this piece of legislation.

As an example, I mentioned the role that the marae played—so much so that the Ministry of Civil Defence and Emergency Management reached out to the marae post the earthquakes and said: “What a remarkable job you have done. We want to include you in our emergency management plans.” That is all well and good, but always the quid pro quo is what extra additional responsibilities and what extra cost will that impose on the proprietors of the marae.

So if we take all that background and we look at the critical section where the select committee has created some exclusions to which the earthquake-prone assessments will apply—if we look at the buildings that have been excluded, obviously there are residential buildings. But there is an exclusion for farm buildings and farm sheds. Well, arguably, we could also include wharenui—we could include marae if—[Bell rung] Thank you, Mr Chair, this is a very important point I am making.

Hon Gerry Brownlee: It’s taking a long time to get there.

RINO TIRIKATENE: It is going to be good. [Interruption] See? We are experiencing the life force of this House right now. As I was saying, if a farm building or a shed that is located on a farm and used primarily for farming activities, or even an ancillary purpose, has been excluded from this part, then why should a wharenui—a marae—and its ancillary buildings not be excluded within that part? That does impose additional obligations, additional cost, and an additional burden on the proprietors of every marae up and down the country. As we know, it is not cheap running a marae these days—it is not very cheap at all. There are a lot of mouths to feed in each tribe—a lot of mouths to feed.

In all seriousness, I believe that consideration should be given to marae, to wharenui, in all building legislation, to encompass more than just the two-dimensional aspect to it but also the extra dimensions that I have mentioned, and also to give consideration for their exclusion from having to go through the earthquake-prone processes. If it is good enough for an ancillary-purpose farm building, then surely it should be good enough for a marae, particularly when those marae have withstood the most powerful earthquakes that this country has faced in recent times and have served a very important purpose in looking after the needs of not only the whānau but also the wider community. Thank you.

RON MARK (Deputy Leader—NZ First): I appreciate the call and a final opportunity to say a couple of words again on my Supplementary Order Paper 160. I just want to raise a couple of interesting comments. I have just been on the phone to some people at Local Government New Zealand who, I need to tell the Committee, are hugely supportive—that is, all the mayors and all of the rural and provincial councils have just reconfirmed they are hugely supportive of the Supplementary Order Paper of New Zealand First. And they are a little bit bewildered as to why the Government will not accept it, as it has already indicated.

I just want to make this point: we have heard some expressions of concern, even from Labour. It does not know what the cost would be or how much money the Inland Revenue Department (IRD) would lose. It is the first time that I have ever heard Labour worrying about how much money the IRD is going to lose, but never mind, it is worried about how much money the IRD is going to lose.

Let us put it this way. Looking at the low-risk buildings and the time given to remediate those seismic risks, it is 35 years. So if the owner of a building in rural New Zealand is put in a situation where they find it unaffordable or less attractive or find that there is less incentive to earthquake-strengthen that building and they leave it sitting there for a period time, and if in that time there is an earthquake and someone does get killed—you know, a building out in Pongaroa or somewhere falls over and the one person who happens to be walking past there at 2.30 in the morning gets killed—it would be interesting if that landlord was then to say: “Well, actually, if there had been a tax break, I might have got the work done.”

It is also interesting that if half the building does fall down and he has to repair it, under this clause—under the IRD ruling—he will get the tax break. So if we wait until the building is damaged before he repairs it and then strengthens it, he will get a tax rebate, but if we do not pass this legislation here tonight and he goes ahead and does the work, he will not get a tax rebate. It is ridiculously ironic that we have a Government that says that it is pro-business, says that it wants to assist business, and says that it wants to incentivise it to do the right thing, but it will not change the IRD definition that is now capturing these landlords and providing a disincentive for them to complete their earthquake strengthening on a building.

What we will see, and I have already had it in the Wairarapa—interesting that they come and talk to me, but they do not talk to their electorate MP. I wonder why that is. They have come to me and said that they will walk away from buildings. I know that right now in rural provincial New Zealand there are people going around offering people who own buildings less than they currently owe on the mortgage because they know that these landlords are strapped. A small step like this by the Government—letting this Supplementary Order Paper go through, changing the way in which the IRD rules on this question, allowing the tax rebate on earthquake strengthening—we still believe would go some way to assisting those landlords, assisting those property owners, and incentivising them to get on with it.

I also want to come back to David Seymour’s Supplementary Order Paper. I am going to indicate here that New Zealand First will support his Supplementary Order Paper. We will do it not necessarily because we are 100 percent convinced right now that the compliance costs on councils may be more than we would want, but as an indication that where Mr Seymour’s thinking is is where ours is.

If you are looking at buildings in low seismic risk areas where the population is very low, why would you include those buildings—why would we? We raised this numerous times—I use the Pongaroa example. There is an old saying “If a tree falls in the forest, and nobody is there to see it fall, or hear it, did it make a sound?”. Well, in Pongaroa at 2.30 in the morning, if there is an earthquake, what is the risk of that wooden façade coming down on to the footpath? We discussed this at length, and those who were on the Local Government and Environment Committee actually agreed that the risk is very, very low.

We in New Zealand First think—and we have heard quite a bit of discussion over on this side of the Chamber—that although we may not be entirely clear as to the total consequences, we are saying that we think the principle of what Mr Seymour is saying is valid. We think that the consequences for rural provincial New Zealand in low seismic risk areas, where there is a one in 100,000-year chance of your being killed through an earthquake happening, is worth consideration. The principle of that is worth thinking about.

So on that basis, knowing that the Government is going to reject its coalition partner’s Supplementary Order Paper and knowing that the Committee will overwhelmingly reject it, we think the principle of what Mr Seymour is saying is valid and is worthy of some greater consideration, and, probably, if we had had more of a chance to lash about this at the select committee, we might have found a halfway house in there again. But the 35 years, 15-year periods that are designated for low seismic risk areas, as a committee we agreed on—we still agree on that. But I think it is fair to say that on the New Zealand First side we have a degree of empathy and sympathy for the principle of what Mr Seymour is saying. Thank you.

POTO WILLIAMS (Labour—Christchurch East): I just want to sum up, I guess, and give some context in my final contribution to the Building (Earthquake-prone Buildings) Amendment Bill. I want to speak primarily to Mr Seymour’s Supplementary Order Paper 152, and thank Mr Seymour for the work that he did to answer the questions that I had earlier on in this contribution.

There has been a lot of well-reasoned, logical debate on this piece of legislation this evening. Much of it is very sound and comes from a good scientific basis, and I would not argue with the logic of it. However, we are dealing with a situation that comes not from a place of logic but from complete illogic and emotion, and if you were to be unfortunate enough to be one of the families who experienced not only the earthquakes themselves but also the loss of a loved one, the loss of a business, or a loved, cherished facility, often logic does not sway the argument. I would say that in this case, there are many of us in this Committee who bring a level of emotion to this discussion, and it would not be right or proper to finish this particular discussion without including some reference to those people who lost their lives, primarily in the February earthquakes.

This is not an exact science. There have been many arguments about excluding particular low-risk areas from this piece of legislation. Christchurch is one of those moderately risky areas—it is not a high-risk area. So if we were to look at the logic of that argument, it is completely illogical because Christchurch would not fit within the bounds of the argument. The most risky area in New Zealand for earthquakes is the southern end of the Southern Alps—not Christchurch and not Napier. However, those two areas are the areas where we have had loss of life and loss of buildings. I am not going to continue much longer, but I will just say that in our review of this particular debate, do not forget the people who lost their lives.

The question was put that the amendments set out on Supplementary Order Paper 130 in the name of the Hon Dr Nick Smith to Part 1 be agreed to.

Amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 152 in the name of David Seymour to clause 23 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 13

New Zealand First 12; ACT New Zealand 1.

Noes 108

New Zealand National 59; New Zealand Labour 32; Green Party 14; Māori Party 2; United Future 1.

Amendments not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 156 in the name of David Seymour to clauses 6, 7, and 23, and to insert new clauses 36A and 36B be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 13

New Zealand First 12; ACT New Zealand 1.

Noes 108

New Zealand National 59; New Zealand Labour 32; Green Party 14; Māori Party 2; United Future 1.

Amendments not agreed to.

The CHAIRPERSON (Lindsay Tisch): The amendment set out on Supplementary Order Paper 160 in the name of Ron Mark to insert new clause 41C is out of order as it has an omnibus nature and is outside the scope of the bill.

Part 1 as amended agreed to.

Part 2 agreed to.

Schedule agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported with amendment presently.

House resumed.

The Chairperson reported the New Zealand Business Number Bill without amendment and the Building (Earthquake-prone Buildings) Amendment Bill with amendment.

Report adopted.

Bills

Radio New Zealand Amendment Bill

Third Reading

Debate resumed from 29 March.

BRETT HUDSON (National): Welcome to this thrilling episode two in the short serial that is my contribution on the Radio New Zealand Amendment Bill. When I last spoke on this bill, I was noting that the intention here is around a continuation of a reliable, independent public radio capability.

The statistics from Radio New Zealand’s own survey work shows that 92 percent of its listeners agree that Radio New Zealand contributes to the development of an informed society. So it has very loyal listeners who think very highly of it. I think, even more significant, though, is that 87 percent of all New Zealanders agree that it is important for New Zealand to have a public service radio broadcaster. So the work we are looking to put in place through this amendment is something that will be welcomed by New Zealanders and will not only continue Radio New Zealand but also help to strengthen and expand its capability to help prepare it for the future as it continues to embrace digital channels, as well its traditional radio.

I would just like to cover a little bit around that digital channel, because it is quite phenomenal, really, the achievements that Radio New Zealand has made in what is still, relatively, a short period of time. In its last review, as it appeared before the Commerce Committee, it advised us that it now has received 36 million page views on radionz.co.nz and thewireless.co.nz, which sounds, by any measure, a fairly phenomenal sort of growth and level of activity for New Zealand. But then we look into beyond just page views and into the number of unique users that access either of those sites. For radionz.co.nz that is 748,000-odd unique users—that is 75 percent higher than to June 2015. The Wireless gets 50,000 unique users per month.

What this is really saying to us is that Radio New Zealand’s foray into the digital channel to help to expand and strengthen its market reach is working phenomenally well for them and that the digital channels are complementing their traditional ad-free public broadcast service. That is precisely what the chair and the chief executive officer had to say to us at the recent financial review.

Some members opposite have made the point that funding has not been increased for Radio New Zealand for some time, and they have played this up as some sort of almost Armageddon-level of freeze. However, the chair was very clear, not only in this most recent financial review but also, in fact, in the previous year’s financial review, that Radio New Zealand is confident—confident—that it will meet its objectives and its targets under its current level of funding. So, quite frankly, it is to be congratulated on the work that it does.

This charter that we will put in place through this amendment is going to strengthen Radio New Zealand’s capability to deliver its public broadcasting service, as well as expand further on its digital channels, and I commend this bill to the House.

JULIE ANNE GENTER (Green): The Green Party supports this bill and, more important, we support the role of public broadcasting in creating a healthy, strong democracy. I have to say that we have a vision for a well-funded, high-quality, multi-platform public broadcasting environment where New Zealand stories and voices are seen and heard. We do not want our children in New Zealand all growing up with accents like mine just because there is a lack of New Zealand content on television or on the radio. Radio New Zealand is currently our only public broadcasting entity, and it does a great job in very tight circumstances.

I have to say that this bill, although we can support it, truly is just around the margins and is not taking the steps that we need to fulfil this vision we have of well-funded, high-quality public broadcasting in New Zealand. This bill has been languishing—you know, not coming back to the House—for a very, very long time. It was in front of the Commerce Committee in 2009. It got a single submission, because it was not that controversial. It has taken that many years to come back to this House for the third reading.

At a time of massive change to broadcasting and journalism, increasing globalisation, an age when information is more free and yet at the same time more siloed than ever before, and the public is more disengaged with our democracy, the best thing that we can say about public broadcasting—about the National Government’s 8 years with this portfolio—is that this uncontroversial bill should have been passed 7 years ago. It is really the only thing the Government has done on the positive side of the ledger when it comes to public broadcasting. We can say it has done a bit on the negative side. We have had the funding freeze for Radio New Zealand, basically since National came to power, which is actually a substantial cut to its real operating budget. Radio New Zealand has managed to still provide probably the best, most insightful critical journalism that is out there in New Zealand, despite these budget cuts. But we have seen the complete removal of non-commercial television in New Zealand, with the National Government killing TVNZ 6 and TVNZ 7.

All this bill does is update the Radio New Zealand charter, which is part of the normal 5-yearly statutory review. This review started in 2005, and it is now 11 years later. Over 8 of those 11 years, we have seen the impact of the funding freeze on Radio New Zealand. I know that at the committee my colleague Gareth Hughes asked why Radio New Zealand was not bothering to ask for additional funding, given that it has this annual operating deficit of $1.4 million and further deficits are forecast, capital spending is 5 to 10 years behind, and the estimate of the real-term funding cut is in the order of $4 million to $6 million each year. The answer, according to my colleague Gareth Hughes, was that it is pointless beating your head against a brick wall.

So there it is. The Government’s approach, National’s approach, to public broadcasting is a brick wall, which is not too surprising because having an informed electorate and a broad and deep debate on the merits of policy solutions for our country is not in the interests of this National Government.

Hon Steven Joyce: Now that’s arrogant.

JULIE ANNE GENTER: It is simply not.

Hon Steven Joyce: No, that’s arrogant.

JULIE ANNE GENTER: It is not. If it were otherwise, we could have a debate about policy and maybe the Government would be supportive of public broadcasting, but it finds it easier to win elections on a few silly slogans. Government members love going on the commercial radio stations and playing up the different personalities of people in their caucus, rather than debating whether or not policies are going to achieve what they say they are. Ironically, the Government did blow $26 million of taxpayers’ money on a failed flag legacy campaign, supposedly to have a conversation about who we are in the world, but it will not adequately fund Radio New Zealand, one of the major cornerstones of our public culture. It would not fund TVNZ 7, the only non-commercial television station that we had, when that would have cost $15 million a year, but it could find $26 million for the flag referendum, where we were trying to replace—rather than have a real debate about our constitution, let us just replace the Union Jack with a silver fern to represent our love of rugby.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Come back to the bill.

JULIE ANNE GENTER: The Greens believe that Kiwis deserve high-quality broadcasting here in New Zealand. No one else is going to provide it; this Government is clearly not going to provide it. But the commercial media simply is not able to deliver the level of debate and investigative journalism that is necessary to have a healthy democracy. We know that. The commercial imperatives simply will not deliver the funding that is needed for quality journalism.

Quality journalism is public good. I know National does not understand the concept of public good. It thinks that if it cannot be commercialised, it is not worth having. You can hear that very clearly—it thinks that dollars are the only evidence of something being of value, when in fact there are many things that are of value to New Zealanders that do not make money. One of those things is democracy. The argument that we cannot afford to have quality public broadcasting in New Zealand is the same as saying that we cannot afford to have elections, because it is that essential to the functioning of democracy.

This is really about choice. The Government has chosen to be a brick wall on public broadcasting, but it does find the money to subsidise smelters, oil drilling, and casinos. Ultimately, that is its agenda. If we do not fund public broadcasting adequately, then what will happen is we will not have the information that voters need to make the choices about whom they want running the country and which policies are going to best achieve the New Zealand that they aspire to have. We can support this bill. It is well overdue. It does not really make a difference one way or the other. I mean, yes, it is great that we still have Radio New Zealand. I would not be surprised if, in a fourth-term National Government, Steven Joyce got his way and we did not have Radio New Zealand—if we flogged it off and simply had commercial radio and television, because that makes it easier for National to hide the fact from New Zealanders that it is letting them down and that it is looking after its rich mates and big business and overseas multinationals. That is the agenda of the National Party.

TRACEY MARTIN (NZ First): Halleluja is all I can say. Halleluja! Finally, finally! I am not going to take my whole 10 minutes, because this Government has stalled this bill for 7 years. Seven years—it is a magic figure with this bill. Seven years ago it was reported back to this Government, and 7 years ago Radio New Zealand needed more money. So for the last 7 years there has been no more money. “What?”, I ask myself, as I notice people whining away. This bill dropped off the Order Paper at the end of last night, but suddenly it has reappeared today. With this bill, that is very quick for this Government. So what is different? What has changed?

I think Mr Hudson told us what changed—the Commerce Committee finally heard from Radio New Zealand that it has given up on asking this Government to fund it appropriately. In his contribution, it was interesting that Mr Hudson talked about how Radio New Zealand was going to embrace the digital environment and how it had met the digital challenge, and so on and so forth. No more money, of course—no more money. They do not intend to get any more money. Now that it has finally kowtowed, now that it has finally decided that there is no point in asking this Government for more money, it might just get a charter. It might just get a charter that is hugely overdue.

I think the other thing that is interesting is that, obviously, Mr Hudson has never read the incoming briefing paper to the Minister, which was put in by Radio New Zealand after the 2014 election, where it said: “We cannot do what you ask us to do unless we actually have more budget. We cannot be starved for funding in this way, and then provide the service, not just to New Zealand, but out into the Pacific and beyond that, in the way that you ask us to do it.” But does this Government care? No, this Government does not care. Of course this Government does not care.

If there was one thing that I agreed with Ms Genter on, it is that, actually, the Government hates public broadcasting—it hates public broadcasting. It believes that all broadcasting should be privatised, because that is what suits this Government—that is what suits the National Party. And it is disingenuous for the politicians sitting on that side of the House, with their track record around public institutions, to actually laugh it off. It is disingenuous. It goes from railways to housing to, finally, we believe, radio stations—airwaves. It goes on and on and on. So this is just another way of starving Radio New Zealand to the point that it either folds or this Government can say that it is not producing—that it is a Government organisation or a Government body, a public body, that is not producing at the level it should and that it would be better run by the private sector. Let us wait and see whether we see that, shall we?

In New Zealand First, we are thrilled. I am not going to take any more time. I challenge the Government members to get up, say that they support this bill, and sit down so that the bill gets through before 10 o’clock tonight. I challenge you to do that, Mr O’Connor. If you take your full call, if the Government members take their full calls, it will be an indication of blustering by this Government. It will be an indication of stalling. So if the backbenchers of the National Government get up on the orders of their whip and start taking 10-minute calls, then it will be an indication that what members of the Opposition have said is true. Just for the record, the junior whip for National has just indicated that they should do exactly that. So just for the record, New Zealand, everything that the Opposition has said has just been verified by Mr Ross.

But let us just see what the charter will have in it when we finally get this through. Will we finally see a Radio New Zealand charter that includes a requirement for unbiased reporting around political parties? Will we finally see it say somewhere inside a charter for the public broadcasting service that all political parties must be given a balanced opportunity to put forward their policies, etc., to the people of New Zealand? Will we finally see that? With the fear that Radio New Zealand is currently feeling under this administration, I think it unlikely. I think Radio New Zealand has learnt its lesson after 7 years of being told to toe the line, toe the line, toe the line. It has learnt the lesson you were trying to tell it. But Governments change—Governments change. And all Radio New Zealand has to do is hold on, because there is a change coming.

SIMON O’CONNOR (National—Tāmaki): I just want to be very clear to the member who has just spoken, Tracey Martin, that I will be taking a short call, not because of her encouragement, but I do not think that my talking for 10 minutes is going to do anything for the public broadcasting service in New Zealand. This is a good bill; it is well-structured. I think, though, that there are some points, obviously—Radio New Zealand, when it came before the Commerce Committee, made it very clear that it was able to work within the financial frameworks that it has agreed to, and it continues to do some absolutely amazing work.

Really, all this talk about not liking public broadcasting is really quite odd, if not anathema, because this bill is about entrenching and making very clear the public purpose of Radio New Zealand. So I do commend the bill to the House, and I look forward to its progress into law.

POTO WILLIAMS (Labour—Christchurch East): I too am not going to take up too much of the House’s time, because I too share Miss Martin’s concern that we get this passed tonight. I do love RNZ. I love Radio New Zealand. It is my channel of choice, and lots of programmes within it. I am really glad that this legislation will actually give effect to the Radio New Zealand charter, which will continue to reinforce not only those great programmes but also the principles by which they are developed and broadcast. I just want to go through some of them, if you will permit.

It is actually broadcasting that is in the public interest—that is, broad-ranged, high-quality, independent broadcasting. It ensures that we have a good cultural balance, that the programmes are intellectual and stimulating, and that they may have a scientific nature or a spiritual nature. These principles promote informed debate, which is really important, particularly when there are issues of national significance to debate, and they stimulate critical thought. They are a support for us in the development of our language and culture, particularly Māori language and culture, and there are programmes that I listen to such as Te Manu Kōrihi, for example. They promote Pacific culture and language as well. Tagata o te Moana, for example, is a programme that I listen to a lot. The music and arts—Music 101—and there are lots of special interest programmes. Simon Morton is a particular favourite of mine; I like the series that he did when he had the beehives at home and also the chickens—I really enjoyed that particular series.

Part of the charter is also about providing New Zealanders and the listeners of RNZ with a sense of citizenship and a sense of national identity. And we could not have done with that more over the last few months when we have been having this debate around what the symbol of our nationhood is—whether it is one flag or another—and, really, whether that is where our discussion about nationhood should start, or whether it should be around discussions into constitutional reform.

But overall I think the overriding principle for me is about accountability: about the accountability of us as members of Parliament in the House, the accountability and scrutiny of the legislation that we write and produce, and the accountability of Government and the executive in its handling of matters of national importance. So although I am not going to take too much more time, I just want to say that I recognise that Radio New Zealand—RNZ—has a standard of excellence. This charter and this bill will put that into effect and reinforce it, and I commend it to the House.

ALFRED NGARO (National): I rise to take a call. It will be a short call—almost as short as my current haircut at the moment. It is really just to commend the Radio New Zealand Amendment Bill in its third reading to the House. Just on two points—first of all, just in regard to the charter where it clearly says, as set out in clause 8(1), “to serve the public interest.” I think that is actually important. That sense of paramountcy and mandate is important to us, as are the other aspects that are there too.

The second point I want to make is that many people may not know that Radio New Zealand provides a very important role under the Civil Defence Emergency Management Act of 2002, where it becomes what they call a lifeline utility. So in times of crisis and disaster it plays quite a significant role. So along with all the other aspects of what it does in regard to broadcasting—through technology and the diversity on a range of programmes—it also provides what I think is a very critical role as well.

In saying that, I do not want to be long, or prolong this, because I think that, in agreeance with Mrs Martin—and not because of her urging—the fact is that the bill has had its readings, has had its submissions, long processes of consultation, and it is time that it now actually comes into force and into law. So I do commend this bill to the House.

KELVIN DAVIS (Labour—Te Tai Tokerau): Tēnā koe, Mr Assistant Speaker. Like the Greens, the Labour Party believes in a well-funded, high-quality, independent public broadcasting service, and it also supports this bill.

One of the first things that popped out to me as I was going through the notes for this reading was that it said that Radio New Zealand’s funding has been frozen at $31.8 million since the 2008-09 financial year. I thought “Oh crikey, I had better just check that that is still the case.” So I gave Clare Curran a call and went and had a conversation with her and I said: “Look, you’ve said this in 2013-14—that the funding had been frozen at $31.8 million—tell me that’s still not the case.” And, unfortunately, Clare did say to me: “Yes, Kelvin, that is the case now, 7 years later.” So 2 years after those comments had been made in the 2013-14 financial review, it is still the case that the funding has been frozen at $31.8 million. In that financial review, Radio New Zealand said cost-cutting could not go on much longer and it would have to seriously look at cutting back on core functions in the near future if its situation did not change.

Reading this morning’s Dominion Post, I came across this article in the business section. It says that creeping erosion makes Kiwis poorer. This article is talking about Kiwi families, but it could equally be applied to organisations that rely on Government funding. The first sentence says: “There’s a quiet force eroding the financial lives of many New Zealanders.” It could equally say “There’s a quiet force eroding the financial viability of some New Zealand organisations.” It says: “in the name of making other government spending sustainable, some money limits on other government programmes remain unchanged as wages and prices march on, trimming spending in real terms without politicians having to talk about cuts.” That could equally be applied to Radio New Zealand. The members on the other side there can put their hands on their hearts and say in all honesty “We have not made any cuts to Radio New Zealand funding.”, and in a dollar amount that would actually be the case—but in terms of real spending they have received cuts.

The Children’s Commissioner told Parliament—now you can substitute “Children’s Commissioner” here with the “chair of Radio New Zealand, Richard Griffin” or the “chief executive officer, Paul Thompson”—about the freezing of his baseline funding since the 2010 financial year. He said: “One can only stretch a rubber band so far.” And the same applies to Radio New Zealand. You can only stretch a rubber band so far before there is going to be an erosion of the quality of the content or there is going to be an erosion of something: to the extent now that we have heard that the problem is so bad that this year Richard Griffin will not even be making a Budget bid to increase the funding for Radio New Zealand. Has he given up? I am not sure of the reason, but why would a chairperson not put in a Budget bid for increased funding for his organisation? He has probably just thrown his hands up in the air and given up all hope.

But let us not detract from the great job that Radio New Zealand does do. As I walked into the House I heard Mr Hudson from the other side talking about some of the ways that Radio New Zealand has targeted new audiences: radionz.co.nz had 1,284,171 users and 5 million page views in the month of February 2016. So in 29 days it had 5 million page views—that is almost as popular as Stuart Nash’s Facebook page; thewireless.co.nz had 83,586 users and 141,660 page views. In online audio—again in February 2016—Radio New Zealand had over 1.148 million unique downloads. That is something like 40,000 unique downloads a day. It also had 163,738 requests for on-demand audio—that is 5½ thousand requests a day. And 108,431 requests for livestreams—that is 3,700 requests for livestreams a day. So Radio New Zealand is trying to target new audiences using all the technology that is there.

Radio New Zealand is highly regarded by New Zealanders, including non-listeners, by the way. Eighty-seven percent agree that it is important for New Zealand to have a public service radio broadcaster and only 4 percent disagree with that. So 87 percent agree, and 4 percent disagree—I guess the others in between do not know. Eighty percent agree that Radio New Zealand provides a valuable service for New Zealanders, and only 4 percent disagree. So when we look at its performance against its current charter—and remember that this bill is about getting a new charter for it. A recent survey asked listeners “How much do you agree or disagree?”, about Radio New Zealand and whether they “promote informed debate?”, and 89 percent agreed that it promotes informed debate. Only 1 percent disagreed—the others are neither here nor there—but 89 percent say that it promotes informed debated. It asked whether Radio New Zealand “contributes to the development of an informed society?”, and 92 percent of respondents said “Yes”. There are over a thousand respondents, and 92 percent believe that Radio New Zealand contributes to the development of an informed society, and only 1 percent disagree. These are superb results, considering that it has had frozen funding since 2008.

In terms of agreeing or disagreeing with whether it provides “a range of programmes which reflect New Zealand’s cultural diversity”, 85 percent agree. Do they “promote and support a sense of national identity?”. Eighty-two percent agree. The one area where I think that Radio New Zealand needs to up its game—and I personally would like to see—is that they need to “balance the need to broadcast programmes of wide appeal while also broadcasting programmes of interest to minority audiences.” Seventy-eight percent agree and 3 percent disagree. And if I can put out a plea there, I would like to see more Māori broadcasting, more Pacific Island languages, more ethnic content, and, certainly, not just more programming in Te Reo Māori but also more Māori-related stories.

Radio New Zealand does an exceptional job, despite the fact that it has had frozen funding for 7 years now. This is a quote from last year’s annual review of Radio New Zealand at the Commerce Committee: “I’d say our financials are as healthy as they possibly could be under the circumstances of a budget that hasn’t been increased, in terms of Government financing, for 7 years now.” It is an appalling indictment on the Government that a broadcaster that is so popular, that does such a great job for New Zealanders—it broadcasts our stories, it promotes national identity, all of those wonderful things—has had a frozen budget since 2008-09.

The Labour Party supports this bill. It is long overdue. I believe one part of the bill is that there is meant to be a review of the charter every 5 years. I think we have missed two of those reviews, and it looks like the first review will not now be until 2020-21. This bill has been delayed too long, and, therefore, we should pass it as soon as possible. Kia ora.

Bill read a third time.

Bills

Electronic Monitoring of Offenders Legislation Bill

Second Reading

Hon JUDITH COLLINS (Minister of Corrections): I move, That the Electronic Monitoring of Offenders Legislation Bill be now read a second time. Many offenders serving sentences or orders in the community are subject to conditions restricting their whereabouts. Such conditions are of two broad types. The first requires the offender to be in a particular place—for example, an approved residential address. The second type of whereabouts condition prohibits entry to certain areas. For example, a released child sex offender may have a condition requiring them to avoid places such as schools or parks that are likely to be frequented by children.

Electronic monitoring provides an additional tool in the overall management of offenders. It supports the effective supervision of probation officers, use of interventions and programmes, regular risk assessments, and pro-social community support. Electronic monitoring already plays an important part in deterring and detecting breaches of whereabouts conditions. The courts can impose electronic monitoring as a condition of bail to verify compliance with the requirement to be at the bail address. They can also impose electronically monitored sentences that confine the offender to an approved residence at defined times, or at other times except for approved absences, and the New Zealand Parole Board can impose electronic monitoring as a special condition of release from a prison sentence of over 2 years or of an extended supervision order.

However, there are legislative barriers to expanding the use of electronic monitoring in the criminal justice system. This bill will improve the safety of victims and the general public by removing such barriers. Specifically, the courts will be able to impose electronic monitoring in the following situations: first, when sentencing an offender to up to 2 years’ imprisonment, the court will be able to impose electronic monitoring as a special condition of release, and, second, when sentencing an offender to intensive supervision, which is a community-based rehabilitative sentence of between 6 months and 2 years. The bill includes provisions designed to ensure that these new powers are used in a manner that is appropriate and effective, including a requirement for the court to obtain advice from the Department of Corrections before imposing an electronic monitoring condition. Defining the purposes of an electronic monitoring condition—

Hon Phil Goff: I raise a point of order, Mr Assistant Speaker. We are really interested to hear what the Minister has to say, but, for some reason, her microphone is not working and her voice is very, very quiet. I wonder whether she could speak directly into it so we could hear what she is saying.

Hon JUDITH COLLINS: Thank you. The bill defines the purposes of an electronic monitoring condition as deterring breaches of conditions that prohibit entry into specified places or areas, and monitoring compliance with such conditions. It sets out the permitted uses of information collected by electronic monitoring, including, among others, detecting and providing evidence of the commission of offences. It makes clear that offenders may be required to have electronic monitoring equipment attached to their bodies and to comply with written instructions—for example, to regularly charge the equipment.

Not only are we progressing this legislation to allow the wider use of electronic monitoring but also we are improving our operational systems for those already being monitored. There have been recent incidents where offenders subject to electronic monitoring have removed their straps and absconded. The Department of Corrections has responded swiftly to these incidents by making changes to the way we deal with electronic monitoring alerts for high-risk offenders. If an offender removes or tampers with their anklet, there is an immediate response; police are advised, and if the strap is cut, offenders are held to account and may face penalties imposed by the court. The Department of Corrections and Police have compiled a list of the highest-risk offenders on electronic monitoring. Following a tamper alert for any of these offenders, the contract provider is required to immediately contact the GPS Immediate Response Team at the Department of Corrections, which then decides on an approved course of action. This has greatly improved the effectiveness in terms of locating offenders and keeping the public safe.

We are also strengthening the bracelets themselves. A new strengthened strap has been developed to be used in the electronic monitoring of the highest-risk offenders. The new strap is stronger and much harder to cut. The Department of Corrections has ordered a thousand of these new straps, which are currently being manufactured. The new straps will be fitted to existing and new high-risk offenders from August 2016.

I would like to thank the Law and Order Committee for its work on this bill. The bill as reported back includes a number of changes. Most notably, it contains amendments to the Corrections Act, clarifying that some prisoners may be subject to electronic monitoring when they are outside the secure perimeter of a prison. New Zealand’s prisons are surrounded by razor wire fences and the vast majority of prisoners spend their time within that boundary. However, some prisoners are permitted to go outside the wire for various reasons. Examples include prisoners who are removed under escort to a hospital for treatment, some prisoners who are close to release and live in external self-care units that are located on prison land but are outside the secure perimeter, and prisoners near the end of their time in custody who may also be granted daily release to work, returning to the prison at night. Escape risk is considered carefully before any prisoner is temporarily released or removed or allowed to live or work outside the wire, and appropriate measures are taken to mitigate the risk.

Nevertheless, the risk cannot be eliminated entirely. The use of GPS technology can provide additional assurances that prisoners who are allowed to be outside the prison’s secure perimeter will not attempt to escape. In the rare case that escape is attempted, GPS monitoring may assist the Department of Corrections and police to respond more quickly. It is neither necessary nor technically feasible to use GPS technology to monitor every prisoner who is outside the wire. However, the amendments will clarify that the department can use this technology where appropriate. The amendments relating to prisoners also set out the purposes of electronic monitoring and the permitted uses of the information. These are based on comparable provisions in the bill that are in the Parole Act, with necessary modifications.

Before concluding, I would like to comment briefly on the New Zealand Bill of Rights Act issues. This bill attracted a report from the Attorney-General under section 7 of the New Zealand Bill of Rights Act, but the Law and Order Committee subsequently concluded that the bill is consistent with the New Zealand Bill of Rights Act. In my view, the positions of the Attorney-General and the committee are not as far apart as may be suggested. It is clear from the Attorney-General’s report that issues of compliance with the New Zealand Bill of Rights Act do not arise from the main policy of the bill but from minor technical amendments to the Parole Act, in Part 1, and the only reason these amendments were considered to be a problem is that they will apply to extended supervision orders, which have been declared to be inconsistent with the New Zealand Bill of Rights Act. To summarise, the Attorney-General and the select committee reached different conclusions about the bill’s technical compliance. Nevertheless, there seems to be a broad agreement that the key proposal in the bill—namely, to expand provision for the electronic monitoring of offenders—is consistent with the New Zealand Bill of Rights Act.

It would be wrong to think that electronic monitoring of offenders is some sort of panacea. However, in concert with a range of other measures, it can make a significant contribution to maintaining public safety and, indirectly, to rehabilitating certain offenders. In addition to the situations where electronic monitoring is already available, the bill will enable it to be used as a special condition of release from a short-term sentence of imprisonment and as a special condition of a sentence of intensive supervision. The bill also clarifies that electronic monitoring can be used for prisoners who are outside the secure perimeter of a prison. Overall, the bill should mean that the potential benefits from electronic monitoring are more fully realised while providing appropriate safeguards for offenders.

KELVIN DAVIS (Labour—Te Tai Tokerau): I rise to speak on the Electronic Monitoring of Offenders Legislation Bill, which the Labour Party does support. It amends three Acts: the Corrections Act 2004, the Sentencing Act 2002, and also some amendments to the Parole Act of 2002. To clarify the situation for the House and for people listening, I would just like to go through the matrix that the Department of Corrections has provided to the Law and Order Committee that describes when different electronic monitoring systems need to be put in place, because it is quite confusing.

When someone is found guilty of a crime, the least restrictive punishment before they are sentenced is that they are bailed into the community. The next least restrictive is that they receive electronic bailing—so they go out into the community still, but it is electronic bail. Then the most restrictive is that they are remanded into custody. So that is all before they are sentenced, and the court does that sentencing. And then the least restrictive of the sentencing is community work, and most people will know that as periodic detention, or PD. When I was the principal at Kaitāia Intermediate School, every 6 weeks or so we would get the PD gang to come in and help tidy up the school and the gardens and to do various jobs. Basically, that is so that those people atone for a minor crime they may have committed in the community.

The next step is supervision. So if it is supervision, it is a community-based rehabilitation sentence that requires offenders to address the causes of their offending. The next step up is intensive supervision, and we are looking to bring electronic monitoring into intensive supervision, in some cases. Intensive supervision is a longer sentence and it involves attending programmes to address issues that led to offending. The next level up—we are getting more severe now—is community detention, which is basically a curfew that requires electronic monitoring. So somebody might still be able to go to work, but between the hours of, say, 7 p.m. to 7 a.m., they have to be at a certain residence, or the curfew might mean they are not allowed to go near other people or other places. The next step up is home detention, where somebody has residential conditions. They have to stay at a residence basically 24/7, maybe with an hour out each week to go and do their shopping or go and see the doctor or pay bills, or whatever. Then, after home detention, the next most serious sentence is a term of imprisonment for fewer than 2 years, which is pretty self-explanatory. The next most serious is a term of imprisonment greater than 2 years. Only the court can impose those sentences.

The next part of an offender’s journey, I guess you could say, is the release and the post-sentence order. The least restrictive is the post-detention conditions. Then, going up the scale, there is release at half of the sentence’s term, and they have conditions with that. Those are imposed by the court. And then the next level up is parole release conditions imposed at the sentence expiry date, and they are imposed by the Parole Board. This is another one of the areas where we are looking to, in this case, beef up the electronic monitoring. Above that are extended supervision orders, where offenders, mainly highly violent or sexual offenders, need to be highly monitored once their sentence is over and they are back in the community. Then, public protection orders are another step up again.

That matrix I think is really important because when you have all these different orders—many of them sound very similar, such as intensive supervision, which is a sentence, and then you have extended supervision orders—it is easy for people to get confused as to where everything sits. But the thing with electronic monitoring is that it does work if it is done well. The basic reason for it is to make sure that people are where they should be. If they are subject to the conditions of electronic monitoring, the bracelets ensure that the person is where they should be. But it also raises an alert if the person ends up somewhere where they should not be—it raises an alert.

The next thing is that electronic monitoring can provide evidence to show that the person was in the wrong area. So it is one thing to get an alert—the person absconds and ducks off somewhere where they should not be, but then comes back. The GPS tracking of the electronic monitoring bracelet can be used to show that they were somewhere where they should not have been. You can also use the bracelet—I am not sure how this works, though—to make sure that the person has not tampered with the electronic monitoring device.

The reasons for electronic monitoring are to make sure that if somebody has committed a crime and has a condition where they, say, should not associate with gang members, then that will be part of the conditions. The bracelet can tell whether or not they have gone near a gang residence. They might not be allowed near a school or near a park, or they might not be allowed there at certain times of the day. So that is what electronic monitoring does.

The thing with electronic monitoring, though, is that it is only as good as the monitoring. We have heard, over the last couple of months, actually, about a number of offenders who have cut off their bracelets. It is good to hear that the Minister has ordered a thousand of these new tough electronic bracelets from somewhere, and that they are going to be used. As it stands right now, an offender can basically walk down to the nearest Warehouse and buy a $2 pair of scissors and cut off the bracelet.

We heard, in the last 2 days too, that on any given day there is somewhere between 20 and 47 offenders who have removed their bracelets and are running around in a community somewhere. The Government tried to downplay that by saying: “Well, 47—that’s less than 1 percent of all the offenders who have got bracelets.” The Government should not downplay that, because it means there is somewhere between 20 and 47 communities that do not know where somebody is. That person is running around in their community. That is 20 to 47 communities that are living in fear. If you take a community like Kaitāia, which has a population of about 5,000, that means there are just under 200,000 people in New Zealand who are living in fear. They do not know where an offender could be at any particular time. So I do not think the Government should downplay those numbers. It is very serious to the people who are most affected—that is, all the communities around New Zealand. Right now they do not know where these people are. They do not know where they are running around. Most of them will not go and commit a crime, but we do not know which ones of them will not go and commit that crime.

Debate interrupted.

The House adjourned at 10 p.m.