Tuesday, 4 July 2017

TUESDAY, 4 JULY 2017

TUESDAY, 4 JULY 2017

Mr Speaker took the Chair at 2 p.m.

Prayers.

Speaker’s Statements

New Zealand Hansard—150th Anniversary

Mr SPEAKER: Members, this month marks 150 years since the establishment of the New Zealand Hansard, the record of parliamentary debates. As one of the earliest parliaments to establish a Hansard service independent of the executive, New Zealand has a longstanding tradition of providing a transparent record of parliamentary proceedings. This plays a valuable role in making the work of this House accessible to all New Zealanders. I note that 2017 is also the 20th anniversary of the Hansard including speeches delivered in Te Reo Māori, along with their translations. I am sure members would wish to acknowledge this occasion.

[Applause]

Oral Questions

Questions to Ministers

Economy—Reports, Confidence, and Outlook

1. JOANNE HAYES (National) to the Minister of Finance: What reports has he received on the level of confidence in the New Zealand economy?

Hon STEVEN JOYCE (Minister of Finance): The New Zealand Institute of Economic Research today released its quarterly survey of business opinion. It shows business confidence is high, with a net 23 percent positive about New Zealand’s economic outlook. This level of confidence points to GDP growth of between 3 and 4 percent. All key activity indicators remain above their long-term averages. The survey highlights increased investment in plant and machinery, and indicates employers are willing to invest in the equipment they need to boost productivity, increase production, and expand into new markets.

Joanne Hayes: What other indicators has he seen of positive momentum in our economy?

Hon STEVEN JOYCE: The ANZ bank released its Business Outlook figures last Thursday, showing that 25 percent of businesses are optimistic about the year ahead. That is up 10 points on the previous month. When it comes to their own business, a net 43 percent of businesses expect better times ahead. That is up five points and is the highest level since July 2014. Westpac’s Employment Confidence Index, released on Friday, shows people are increasingly upbeat about the state of the labour market. The index increased 3.5 to 113.4. That is the highest level recorded since before the global financial crisis in 2008. That means workers are increasingly confident about their job security and new job opportunities opening up.

Joanne Hayes: What is underpinning the strengthening confidence of employees and businesses?

Hon STEVEN JOYCE: This Government’s strong economic plan is delivering concrete results, whether it is the 137,000 new jobs added in the last 12 months or average after-tax wages rising faster than inflation. In addition, businesses can see the benefits of this Government’s large investment in infrastructure to boost productivity and help get goods to market. The opening of the $1.4 billion Waterview tunnel is already proving beneficial, for example, for moving between South and west Auckland or making a trip to the airport.

Joanne Hayes: What examples has he seen recently of employers and of exporters using the current favourable economic conditions to expand and get ahead?

Hon STEVEN JOYCE: Over the last few weeks, I have had the honour of attending many export awards ceremonies around the country, showcasing innovative companies increasing their productivity and growing new markets. At the Bay of Plenty awards, Dominion Salt showed how a company founded in 1942 can reinvent itself and generate high export growth on the back of targeting premium products for the pharmaceutical industry. And at the Auckland-Waikato awards, ABE’S Real Bagels won its category with successful expansion into Australia. It is now shipping five container-loads of bagels to Australia every week.

Housing Affordability and Availability—Auckland Special Housing Areas and Hutt Valley Development

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Has he asked his housing Ministers for a report of how many affordable houses have been built in the Auckland Special Housing Areas; if not, why not?

Rt Hon BILL ENGLISH (Prime Minister): No, but I would expect that Auckland Council, which argued vigorously for those requirements, will collect the information. I do regularly receive reports from Ministers on the impact of special housing areas and many other Government initiatives. These impacts include almost 5,000 consents for new homes in special housing areas, 10,400 consents issued over the last 12 months, flat house prices in the last 9 months, and improving housing affordability according to Massey University, none of which has been assisted by the Labour Party’s opposition to the Point England development.

Andrew Little: In light of that answer, and focusing for the moment just on things that people actually live in—called houses—why is the Government unable to say how many affordable homes will be built in the Auckland special housing areas?

Rt Hon BILL ENGLISH: As I have just said, I expect that Auckland Council will be able to collect that information. It is in by far the best position to do so. The Government focuses on the broader picture of housing affordability, and with flat house prices and rising incomes, housing affordability is now gradually improving. If the Labour Party had not opposed the Three Kings development and the Point England development, we would have made even more progress.

Andrew Little: Why is the Government also unable to say how many affordable homes will be built in its cynical Hutt development?

Rt Hon BILL ENGLISH: I just disagree with the member’s assertion. He can ask the Minister about the detail, but the Hutt Valley has one of the highest concentrations of traditional State housing in the country, and some of the worst State housing stock, and the irony is that the Labour Party wants to leave it how it is, whereas we want to rebuild the Hutt Valley.

Andrew Little: I raise a point of order, Mr Speaker. The Prime Minister had finished answering that question at the end of his first sentence. He should not have been allowed to carry on.

Mr SPEAKER: I do not agree with the member on this occasion. There has been a lot of interjection, and if the members to the left and right of the Leader of the Opposition are going to continue to interject through the answer, then they have got to expect a little bit back in return.

Andrew Little: Thank you, Mr Speaker—it is a relief to see I am in the centre again! Will overseas speculators be able to buy any of the houses built in the Hutt or the Auckland special housing areas; if so, why does he allow that?

Rt Hon BILL ENGLISH: I know the Labour Party is very focused on, I think, the 3 percent of overseas resident taxpayers, many of whom may or may not be what he calls speculators. What you know is that in a market where more supply is coming to the market more quickly than ever and house prices are flattening, then the room for speculation is very minimal.

Andrew Little: How can he expect to be believed on housing, when CoreLogic says the number of sales to first-home buyers is at its lowest level in 20 years?

Rt Hon BILL ENGLISH: There may be arguments about what those numbers actually mean. What we know is that the housing market is going through an adjustment, and that will have—

Hon Members: Ha, ha!

Rt Hon BILL ENGLISH: Well, those members were against the prices going up, and now they are against them not going up, which is, on “Planet Labour”, logical, I suppose.

Andrew Little: Given that he, along with the rest of New Zealand, must undoubtedly agree with Nick Smith’s self-assessment—that he is not a miracle man—could he encourage Nick Smith to at least become a mediocre Minister who actually builds some affordable houses?

Rt Hon BILL ENGLISH: If we are looking for examples of mediocrity, we do not need to go any further than the Labour Party, that is for sure—there are plenty of them. Minister Smith has delivered special housing areas, HomeStart grants, the new Auckland Unitary Plan, the Crown building programme in Auckland, the National Policy Statement on Urban Development Capacity, the Resource Management Act reform bill, unit title corporate reform, urban development authorities, and Building Act liability reform. What an outstanding contribution from a team led by Nick Smith.

Mr SPEAKER: Order! A little less interjection from both sides, thank you.

Andrew Little: Notwithstanding his list of things that have contributed nothing towards greater housing affordability, given that after 9 years his Government is delivering the lowest level of homeownership in 66 years, and houses built on public land are being snapped up by speculators, when will he wake up and see that it is time to build truly affordable houses, stop the speculators, and ensure that every Kiwi family has a place they can call their own?

Rt Hon BILL ENGLISH: The member is just wrong about what he is saying. I mean, he is even unhappy about the announcement today of 700 new houses in the Hutt Valley, which will be reasonably priced houses. But the good news for the Hutt Valley is that it is just the start, because there are thousands of houses in the Hutt Valley that can be rebuilt, land used more efficiently, and over the next 10 years we are going to rebuild the social housing stock in the Hutt Valley.

Todd Barclay—Southland Electorate Office Allegations, Ministerial Conduct

3. RON MARK (Deputy Leader—NZ First) to the Prime Minister: Before making a statement on the Clutha-Southland electorate office issue, does he check all the facts?

Mr SPEAKER: In so far as there may be prime ministerial responsibility—the right honourable Prime Minister.

Rt Hon BILL ENGLISH (Prime Minister): I have no ministerial responsibility for that issue. [Interruption]

Mr SPEAKER: Order! No, I want substantially less interjection from my immediate right.

Ron Mark: When asked last week whether he “can categorically rule out that no current or former Minister has listened to the recording”, why did the Minister of Finance, speaking on his behalf, say last Thursday: “I doubt that any member would have been listening to that in their ministerial capacity.”?

Rt Hon BILL ENGLISH: As I have already said, I have no ministerial responsibility for the issue being raised by the member.

Ron Mark: I raise a point of order, Mr Speaker. I actually asked—the guts of the question was why did he say that he doubted that any member would have been listening in their ministerial capacity—

Mr SPEAKER: Order! Can I just have—I do not need a reread; I just want to know what the point of order is.

Ron Mark: Well, he did not answer the actual question.

Mr SPEAKER: No, no, the Prime Minister definitely addressed the question. Whether the member is happy with the answer—that is his business. I am not responsible for the quality of the answer, but the question definitely was addressed.

Ron Mark: If that answer confirms Ministers in his Government have heard a recording, who are they, given that paragraph 2.55 of the Cabinet Manual states: “A Minister of the Crown, while holding a ministerial warrant, acts in a number of different capacities: a. in a ministerial capacity … b. in a political capacity as a member of Parliament … and c. in a personal capacity.”?

Rt Hon BILL ENGLISH: I agree that is what the Cabinet Manual says. [Interruption]

Mr SPEAKER: Order! Supplementary question, Ron Mark.

Ron Mark: Was he referring to his ministerial colleagues when he sent a text message saying “Everyone unhappy.”; if not, can he categorically say that no current or former Minister in this Parliament has listened to that recording?

Rt Hon BILL ENGLISH: As I said in answer to the first question, I have no ministerial responsibility for issues related to the Clutha-Southland electorate office.

Ron Mark: I seek leave to table a written parliamentary answer from the Speaker that is not yet publicly available, dated 30 June 2017, confirming legal expenditure was funded from the National Party’s leader’s budget in relation to Glenys Dickson’s settlement.

Mr SPEAKER: Order! I will put the leave. Leave is sought to table that particular answer. Is there any objection? There is objection. [Interruption] Order! [Interruption] Order! This is about the third or fourth time I have risen to my feet to ask people not to interject. It is occurring on both sides of the House, and it is to cease.

Ron Mark: If his involvement in statements are in his capacity as leader of the National Party, then why did taxpayers cover the legal costs associated with this matter from the Prime Minister’s budget?

Mr SPEAKER: Order! No, that question is definitely out of order. I refer the member to Speaker’s ruling 173/1.

Economy—Productivity, Wage Growth, and Inflation

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the statement, “New Zealand’s productivity story is continuing to worsen, relative to our previous history and relative to Australia and our major trading partners”; if not, what specifically in that statement does he disagree with?

Hon STEVEN JOYCE (Minister of Finance): No, I do not agree with Mr Bernard Hickey in that statement. While New Zealand’s labour productivity had been in decline since the early 1990s, the recent OECD report on New Zealand shows that GDP per capita, which is one indicator of productivity, has increased since 2010 relative to the top half of OECD countries. What this means, as the OECD has noted, is that we have stopped the long-term productivity decline. We do, of course, still need to lift productivity if we are to close the gap with leading OECD countries, and this is a priority for the Government. The good news for the member is that progress on many of the OECD’s recommendations on how to lift productivity is in train.

Grant Robertson: Is it correct that according to Statistics New Zealand and Treasury figures, output per hour worked has been falling for the last 2 years and is now at a record low?

Hon STEVEN JOYCE: Well, knowing the member, I would have to go away and check those particular numbers, but all I can do for him is quote the OECD, which is a definite dispassionate observer of the New Zealand economy, unlike some. The OECD points out that New Zealand has stopped the long-term productivity decline and that we are now working to lift productivity to close the gap with OECD countries.

Grant Robertson: Is it correct that GDP per hour worked fell by 1.3 percent over the last year?

Hon STEVEN JOYCE: I do not have GDP per hour worked, but I do have GDP per capita, and that has increased by just under 1 percent over the last year. I know the member has a propensity to try desperately to find reasonably obscure statistics to back up his claims, but GDP per capita, which is his normal method of complaint, is just under 1 percent.

Grant Robertson: Is it not, in fact, correct that New Zealand is now in a productivity recession, and that this is one of the main contributing factors to two-thirds of workers getting a pay rise less than inflation in the last year?

Hon STEVEN JOYCE: No. The member is literally wrong. New Zealand’s wages have been growing faster than inflation over the last several years, and New Zealand has been seeing real wage growth at a higher level than countries like the US. But I would suggest, rather than Mr Little listening to Mr Robertson, he perhaps go and get a dispassionate observer like the OECD so that he does not get the wool pulled over his eyes.

Grant Robertson: Is he telling the House that it is incorrect that two-thirds of working New Zealanders got a pay rise less than inflation in the last year?

Hon STEVEN JOYCE: Well, inflation last year—the calendar year 2016—was zero. It is difficult to get a pay rise less than zero, and, in fact, I think, from memory, the average pay rise was around 2 percent last year. All of that, therefore, was a real wage increase given that, during that year, inflation was zero.

State and Social Housing—Hutt Valley Development

5. CHRIS BISHOP (National) to the Minister for Social Housing: What recent announcements has she made regarding social housing in the Hutt Valley?

Hon AMY ADAMS (Minister for Social Housing): Today I announced an extensive work programme to build and refurbish more than 700 homes in the Hutt Valley over the next 5 years, with the first new homes to be completed by mid - next year. The programme includes 30 new social houses that are commencing immediately on four sites in Lower Hutt; master-planning for around 300 further new homes across four sites in Ēpuni, Naenae, and Waiwhetū; and refurbishing 383 existing homes to make them warm and dry and to bring them up to standard. This is on top of the work already completed by this Government in the Hutt Valley with the transformative 109-house urban regeneration development at Pōmare, which was completed last year, and 179 homes that we have seen earthquake-strengthened and modernised over the past 4 years.

Chris Bishop: How will the refurbishment programme help the local housing stock in the Hutt Valley?

Hon AMY ADAMS: The Hutt Valley housing stock is amongst the oldest in Housing New Zealand’s portfolio. That is why, as part of today’s announcement, $67.3 million has been committed to retrofit 383 homes throughout the Hutt Valley. The refurbishment plans include improvements and upgrades to kitchen and bathroom facilities, carpets, curtains, and heating sources throughout these homes. All of these improvements are critical to ensuring that Hutt Valley social housing tenants live in warm, dry, and fit-for-purpose homes.

David Seymour: Minister, how much of this housing is suitable for students, because my campaign manager brought over some Americans and it has just got a bit out of hand?

Mr SPEAKER: Order! No. That question is completely out of order.

Phil Twyford: How many of the new and additional homes announced for the Hutt Valley will be affordable?

Hon AMY ADAMS: Well, of the 330 new homes, 130 will be social homes, which I know Labour is not interested in, and at least 60 will be affordable homes.

Special Housing Areas—Affordability and Availability

6. METIRIA TUREI (Co-Leader—Green) to the Minister for Building and Construction: E hia ngā whare ka taea te hoko, kua waihangatia i ngā Takiwā Waihanga Whare Motuhake, o Tāmaki-makau-rau?

[How many affordable homes have been built in Auckland’s Special Housing Areas?]

Hon Dr NICK SMITH (Minister for Building and Construction): Special housing areas (SHAs) are making a huge contribution to increasing housing supply in Auckland, with about a third of the total new homes currently being built being in SHAs. About 5,000 homes have been consented and 2,800 have been completed to date in SHAs. We do not record the sales price of new homes in special housing areas or newly zoned areas under the new Auckland Unitary Plan. I do have information on sales prices in Government-initiated developments, and on the basis of these estimates, at least 400 of the new homes in special housing areas are under the KiwiSaver HomeStart cap of 650 grand.

Metiria Turei: If the Minister is not counting the number of affordable homes and Auckland Council is not counting the number of affordable homes, is anybody counting how many affordable homes are being built in Auckland in the SHAs?

Hon Dr NICK SMITH: The Productivity Commission, the Auckland Council, and the independent hearings panel all agreed that trying to use the Resource Management Act to regulate a portion of affordable homes was unworkable and would not work and that what we needed to focus on was the overall level of affordability. I do note that in the last 12 months there has been a significant improvement in the housing affordability index used by Massey University in Auckland, and that is to be welcomed.

Metiria Turei: I raise a point of order, Mr Speaker.

David Seymour: Supplementary?

Mr SPEAKER: No, sorry, I am dealing with a point of order first.

Metiria Turei: Thank you, Mr Speaker. I specifically asked who is counting how many affordable homes are being built in the Auckland SHAs. It has got nothing to do with the Resource Management Act.

Mr SPEAKER: Order! I again listened very carefully to the question and to the answer, and in light of the answer given to the substantive question, I think that in this case the question has been addressed.

Dr Parmjeet Parmar: What positive signs are there that the Government’s reforms are addressing the housing challenges?

Hon Dr NICK SMITH: Firstly, record new home construction. The latest Statistics New Zealand figures show 2,794 homes were consented in May. That is the highest number—

Phil Twyford: They’re trending down, Nick.

Hon Dr NICK SMITH: —in 40 years. It is up 20 percent on last May, and how Mr Twyford says that is a trend down is truly remarkable. Secondly, house prices in Auckland have been dead flat now for 9 months, and the latest median price is actually down 1.7 percent on last October. Thirdly, housing affordability in Auckland, as measured by the Massey University index, has been improving for 18 months and is down from a peak of 38 to 32. This positive data shows our policies are on the right track and delivering for New Zealanders.

Metiria Turei: Is the Minister afraid that if he did start counting how many affordable homes have been built in his flagship SHAs, he would be embarrassed by the low number?

Hon Dr NICK SMITH: Quite the opposite—quite the opposite. It just seems odd that you would measure just the house prices in the special housing areas and not the substantive number of new homes that have been built with the new unitary plan or all the other homes that are being built. What the member should be welcoming is that over the last 18 months housing affordability in Auckland has been improving, and I think every member of the House should welcome that.

David Seymour: Does the Minister believe that the current rate of home building in Auckland is adequate to keep up with the number of houses required to keep up with population growth?

Hon Dr NICK SMITH: The rate of new home construction in Auckland has grown every year for 6 years, at an average rate of almost 20 percent. That is the longest and strongest growth in new home construction in Auckland’s history. At the moment we are at 10,400; we need to get to 13,000. The independent pipeline report says that we will get to that level of 13,000 houses per year at about the end of 2018. I do not believe you can grow the sector faster than we are.

Metiria Turei: The Minister can confirm, can he not, that the purpose of his special housing areas legislation is “to enhance housing affordability”?

Hon Dr NICK SMITH: Absolutely. All the research shows that the best way to increase housing affordability is to increase supply, and that is what we have been doing very strongly, with 6 straight years of growth in new home construction in Auckland. That has never happened before, and I would also suggest to the member and her party that if they were serious about improving affordability they would oppose the sorts of metropolitan urban limits that got us into the problem in the first place.

Metiria Turei: The Minister can also, then, confirm that the special housing areas are being used to build “premier luxury retirement resorts” in Queenstown?

Hon Dr NICK SMITH: Absolutely, special housing areas are supporting increased numbers of retirement villages, but what the member does not get is that when an older person moves out of their traditional family home into the retirement village, they free up another home for a family, and that is why I welcome it.

Metiria Turei: Does the Minister stand by his statement he made this morning that affordability “is in the eye of the beholder”?

Hon Dr NICK SMITH: It is absolutely true that what is an affordable house does vary depending on a person’s circumstances, and the fact is that there have been 5,000 homes—

Phil Twyford: Keep digging.

Hon Dr NICK SMITH: —in special housing areas that have been built. I note Mr Twyford is interjecting. Those members announced a policy 4 years ago saying affordability was $300,000. Then they made it $400,000. Then they made it $500,000. I have seen three figures from that member as to what he thinks is affordable, and that reinforces the point of view that it does depend on a person’s family circumstances.

Homeownership, Māori and Pasifika—Māori Housing Network and Other Initiatives

7. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister for Māori Development: Does he agree with Te Matapihi, the national Māori housing organisation, that nine years of inaction by his Government is the reason for a huge decline in Māori and Pasifika homeownership; if so, what does he think this says about his Māori housing initiatives?

Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe, Mr Speaker, kia ora tātau, ā, hei whakautu te pātai [Greetings, Mr Speaker, and to us all, and in response to the question]: while I have no delegated responsibility for Māori and Pacific homeownership rates, I note that homeownership rates amongst Māori and, indeed, Pasifika people were declining long before I became Minister—in fact, under successive Governments. This is why when I became Minister one of my first priorities was to establish a Māori housing network, Kāinga Ora, to have a specific focus on improving housing outcomes for Māori. I would like to point out that after I made my Budget 2017 announcements Te Matapihi put out a press release on 8 May congratulating me. It said: “Te Matapihi would like to congratulate Minister for Māori Development Te Ururoa Flavell on the announcement of several new Māori housing initiatives at a hui at Waipatu … in Kahungunu this morning.” The press release continued: “Te Matapihi look forward to supporting Te Puni Kōkiri to implement these programmes. We would like to acknowledge Minister Flavell, who has worked hard to consistently secure an increase in pūtea for Māori housing every year, over the past three years he has been in office, for better Māori housing outcomes.”

Kelvin Davis: How can he pretend that his Government has done anything for Māori housing and homelessness when the Māori homeownership rate has fallen to just 28 percent under his watch?

Hon TE URUROA FLAVELL: As I said earlier, as Minister for Māori Development I am not responsible for the whole of Government approach to housing, which also targets Māori. What I can say is that through Budgets 2015, 2016, and 2017, since I have been Minister, I have managed to secure successive increases to support whare-focused initiatives, bringing the total funding for the Māori Housing Network to just under $20 million per annum. I can say that the focus of Budget 2017, again, was all about improving the outcomes, where I secured a further $17 million over 4 years, which includes $9 million to explore pathways for Māori ownership. There is a lot of good news in the housing area.

Kelvin Davis: What kind of system is he running when the Māori Housing Network has spent over $37 million, and yet contributed funding to only 63 homes’ costs, with only—wait for it—11 of those getting a code of compliance?

Hon TE URUROA FLAVELL: I can answer that very easily. Just to help the member, since the Māori Housing Network was launched in October 2015 the network has actually supported 155 Māori housing projects aimed at improving housing for whānau, and now these whānau live in far safer, warmer, healthier homes.

Hon Members: How many houses?

Hon TE URUROA FLAVELL: I will help the members if they just kept quiet a little bit. Of those 155 projects the Māori Housing Network has been able to support—here were go—there were housing repair projects for 179 whānau in areas of high deprivation; it contributed to the cost of building 63 new affordable homes, which include rental homes for whānau that are owned by Māori collectives; and it supported housing infrastructure for 176 new homes. I think the major thing to say is that whatever we do, it is far better than Labour.

Kelvin Davis: Can he confirm that the Māori Housing Network, with $37 million spent, has got only 11 houses up to code of compliance?

Hon TE URUROA FLAVELL: I cannot confirm that. If the member wanted to give that in writing, I would have brought the information across. What I can confirm is that we have run, amongst a number of initiatives across the housing space, 36 capability housing infrastructure proposals, and we have completed 62 initiatives to increase whānau knowledge about housing initiatives. If the member wants answers, he should really put the question in writing so that we know what we are talking about.

Marama Fox: Does the Minister believe that the subsequent mainstreaming of housing services by the Labour Party has contributed to the decline of Māori homeownership?

Mr SPEAKER: Order! No, that question is out of order. There is no responsibility for the Labour Party.

Kelvin Davis: Does he think it is honest to promote his Te Ara Mauwhare initiative as something that will get Māori into homeownership when he cannot answer how many whānau are targeted to achieve homeownership, how many houses will be built, and how many communities will be involved?

Hon TE URUROA FLAVELL: That is the exact reason why we want to address housing by way of Te Ara Mauwhare. Total homeownership rates across all ethnicities have been declining since their peak in 1991. Around 28 percent of Māori own or part-own their own homes, at least at the last census, and that is why we have got $9 million in the project called Te Ara Mauwhare. This is a new initiative I obtained through Budget 2017, recognising the need to take action to address Māori homeownership rates. The new funding will be used to trial ways to help whānau themselves achieve greater housing independence, and, in particular, homeownership. I hope to be able to build on the successful trials that we have had to reach more whānau in subsequent years to come.

Kelvin Davis: Why will he not admit that all his tinkering has made very little difference and that Labour’s KiwiBuild is a better option because it would house tens of thousands of young Māori families?

Hon TE URUROA FLAVELL: I disagree with the statement by the member. I mean, he says that, but actually what happened was that he also arrived to a housing project in Kaitāia—where he lives—under He Korowai Trust. On that day, about a year ago, he, along with me, celebrated the success of Ricky Houghton and the project that he had done, where he was able to provide papakāinga development to provide affordable homeownership and wraparound support services for whānau in Kaitāia. The trust has pioneered an affordable homeownership model so whānau can make sure that they have got roofs over their heads and can look after their tamariki mokopuna. The member was at that hui. I was at that hui. He clapped. I clapped. It should be a good deal.

Education—Digital Fluency Curriculum

8. Dr JIAN YANG (National) to the Minister of Education: What recent announcements has she made on digital fluency in schools?

Hon NIKKI KAYE (Minister of Education): Last week I was pleased to announce that consultation has opened on the new digital technologies content for The New Zealand Curriculum and Te Marautanga o Aotearoa, the Māori-medium curriculum. We are breaking new ground with a curriculum that offers unique Māori content, learning that can be shaped according to students’ individual needs, and futureproofing so it can adapt to new technology as it arises. The new curriculum content is about ensuring that students across year levels have access to rich learning aimed at building their digital skills and fluency to prepare them for the future. Our curriculum needs to keep pace with this fast-changing world. The new curriculum content sets out what students need to learn to become not just digital-fluent users but also skilled creators of digital innovations and inventions.

Dr Jian Yang: How will the Government invest to support young people to be digitally fluent?

Hon NIKKI KAYE: We are investing approximately $40 million over 3 years to support implementation of the new curriculum and ensure that our system is set up to enhance the digital fluency of young people. The package includes $24 million of new funding and $16 million of existing funding, and comes on top of the Government’s $700 million investment to enhance school connectivity and $21 million over 3 years already prioritised to teach digital technologies. This package includes exciting initiatives such as digital enterprise scholarships, a national digital championship, and more interactive resources to support students’ learning.

Dr Jian Yang: What feedback has she seen from education and tech leaders on the announcement?

Hon NIKKI KAYE: I have seen a wide range of support for this initiative, including from the education sector, the ICT industry, and businesses. This includes feedback from IT Professionals New Zealand, which said “This isn’t just about changes to a Curriculum, but about positioning New Zealand at the forefront of today’s digital world and equipping students with the skills they need to not just survive, but truly thrive as they navigate through it.”; and from New Zealand Educational Institute president Lynda Stuart, who welcomed the announcement and said “it was also positive to see that digital fluency would receive a greater emphasis in initial teacher training, to ensure new teachers were ready to deliver the new curriculum content.”

Environmental Legal Assistance Fund—Annual Funding and Criteria

9. EUGENIE SAGE (Green) to the Minister for the Environment: By how much has annual funding for the Environmental Legal Assistance Fund been cut since 2013/14?

Hon Dr NICK SMITH (Minister for the Environment): The budget this year is $600,000 per year, as it was last year and the year before. For the 4 years prior to that the budget was $800,000 per year but was repeatedly underspent. The spend in 2013-14 was $555,000, and the average actual spend was $520,000. As much as I like the Minister of Finance, I do not like under-spending my vote so I reduced the budget in 2015-16 and transferred it to increased support for collaborative processes. This is also consistent with our blue-green philosophy of supporting people to find solutions rather than spending it on legal aid to fight disputes.

Eugenie Sage: Can he confirm that he created a new criterion for the fund recently so that community groups wanting to challenge council decisions in the courts are likely to be denied funding if their case might “impede or delay” a development project?

Hon Dr NICK SMITH: Yes, I have changed the criteria. A new consideration is the issue of housing and infrastructure. The Government makes no apologies for making it harder for groups to get Government money to stop houses and infrastructure from being built. It does not prevent funding being provided in those sorts of cases, but it requires the panel to give consideration to the broader public interest. It simply does not make sense for the Government to be using public money to stop transport projects being built and stop houses being built with legal aid funding.

Eugenie Sage: Does he believe that Forest & Bird would have received funding to mount a legal challenge to Bathurst Resources’ proposed coalmine on the Denniston plateau if this new criterion had been in place?

Hon Dr NICK SMITH: There is an independent panel that makes the decisions on the issue of the legal aid. What I have added to the criteria is that, alongside the environmental things, issues like infrastructure, jobs, and housing have to be a consideration. But it still will be an independent consideration for the panel.

Eugenie Sage: Can he confirm that last year he gave himself the power to decide which cases and which community groups would get environmental legal aid, stripping this power away from the Ministry for the Environment’s chief executive?

Hon Dr NICK SMITH: Each year Ministers make a decision about the level of delegations. In this particular case, I decided not to delegate to the Ministry for the Environment, albeit I note that I followed the panel’s advice in every case. In the event that I do not follow the panel’s advice it will be a matter of open public record.

Eugenie Sage: Why will he not just own the fact that his Government is trying to stop legal challenges that might impede environmentally destructive development, like the coalmine on the Denniston plateau, the Ruataniwha Dam, and the Basin Reserve flyover?

Hon Dr NICK SMITH: I know of many Wellingtonians who would be concerned that the Government was spending money on stopping roading through to the airport being constructed with legal aid funds. So the Government has deliberately put into the environmental legal aid criteria that the panel needs to consider issues like infrastructure and housing. To quote the Minister for Infrastructure: “We are the infrastructure Government.”, and we want to see New Zealanders being able to get around and have a roof over their heads.

Christ Church Cathedral—Crown Funding Offer and Other Assistance

10. NUK KORAKO (National) to the Minister supporting Greater Christchurch Regeneration: What announcements has she made regarding the Christchurch Cathedral?

Hon NICKY WAGNER (Minister supporting Greater Christchurch Regeneration): Today I announced a revised Crown offer to support the reinstatement of the Christ Church Cathedral. It is supported by a cross-party commitment to legislate, streamline, and fast track the process. The revised offer confirms funding from numerous supporters and sources. The largest amount is from the Church itself, from insurance proceeds, a Government grant for $10 million, and a suspensory loan for $15 million, which will be forgiven if the synod reinstates. There is $10 million from the Christchurch City Council and generous donations from individuals organised by the Greater Christchurch Buildings Trust. In all, the offer represents about $90 million, which is enough to complete the reinstatement of the Cathedral and its auxiliary buildings, although fundraising will still be required for the tower and steeple and ongoing endowment.

Nuk Korako: What other assistance has been provided in addition to funding?

Hon NICKY WAGNER: If reinstatement is confirmed, an independent fundraising trust, similar to one at the arts centre in Christchurch, will be established to secure any remaining funding required, as well as a joint venture between the Church property trustees and the fundraising trust to govern and manage the project. Most party leaders in this House have agreed to support legislation in principle that will fast track the reinstatement of the Cathedral. I wish to thank my parliamentary colleagues for their support.

Nuk Korako: How does the revised proposal help Christchurch?

Hon NICKY WAGNER: Christ Church Cathedral sits at the very heart of Christchurch. As well as being a place of worship, it is a significant and recognised category 1 heritage building. It is also the city’s namesake, the symbol of the city, a community facility, and a tourist attraction. If the synod agrees to this offer when it votes in September, it will break the current stalemate on what should be done with the Cathedral and provide a clear path forward towards the regeneration of the city of Christchurch.

Health Services—Specialist Appointments and Demand and Funding

11. RON MARK (Deputy Leader—NZ First) to the Minister of Health: Is he concerned about the Government’s ability to meet New Zealanders’ need for specialist appointments; if not, why not?

Hon Dr JONATHAN COLEMAN (Minister of Health): I am always concerned about meeting the need for specialist appointments. That is why this Government has lifted the number of first specialist assessments from 404,000 per year to 552,000 per year over the last 9 years, an uplift of 36 percent—well ahead of population growth. While that is hugely positive, of course, there is always more we can do.

Ron Mark: If that is the case, Minister, then why did Hutt Valley District Health Board (DHB) turn down a patient because “Public hospitals have limited resources, including funding. Currently we receive more requests for specialist appointments than we are able to provide.”?

Hon Dr JONATHAN COLEMAN: That has always been the case whoever has been in Government. There has always been more demand for appointments in surgery than any Government has been able to meet. I would welcome a constructive meeting with the member so we can get the details of that case and work through exactly what has happened.

Ron Mark: Is it not a fact that most DHBs cannot cope with current levels of requests for specialist appointments because they do not have the funding or the resources?

Hon Dr JONATHAN COLEMAN: No, it is not a fact. The allocation to district health boards has increased by $439 million this year, including the situation around first specialist assessments at the member’s own DHB, Wairarapa. They have gone up from 6,400 to 8,700, a rise of 36 percent over the last 9 years, including a rise of nearly 1,000 since Mr Mark left the DHB—possibly a coincidence, but definitely a fact.

Ron Mark: When Hutt Valley DHB told a patient “That it is important to be honest with our community about the services we can and cannot provide.”, why can he not do the same and admit that DHBs are not adequately funded and are struggling to cope with the current demand?

Hon Dr JONATHAN COLEMAN: If you look at the funding that has gone to Hutt Valley DHB this year—look, there has been an extra $15 million in this Budget and $100 million extra over the last 9 years, taking it to a total of $428 million. So that is plenty of money. There are obviously more appointments, more elective surgeries, more doctors and nurses—actually, it is a very positive story in the Hutt Valley.

Ron Mark: I seek leave to table a letter from Hutt Valley DHB, dated 25 May 2017, stating in part that it cannot keep up with the demand.

Mr SPEAKER: Leave is sought to table that particular letter from Hutt Valley DHB. Is there any objection? There is none; it can be tabled.

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

Ron Mark: If DHBs are properly funded, then why did 16 DHBs, including Hutt Valley and the Wairarapa, respond to an Official Information Act (OIA) request stating that elective treatment is outsourced because they either do not have the resources to meet the current demand or cannot meet the targets set by the Government?

Hon Dr JONATHAN COLEMAN: There is nothing wrong with those services being outsourced. The key thing is that we are providing more elective surgery all the time. We are doing an extra 50,000 operations per year. So if the local DHB cannot meet the uplift target that it has been set, which is 4,000 nationally, it makes sense that people get their operations, paid for by the State, done down the road at the private hospital. We are interested in the outcome.

Ron Mark: I seek the leave of the House to table two OIA requests from Hutt Valley DHB, dated 13 June 2017, and from the Wairarapa DHB, dated 7 June 2017.

Mr SPEAKER: Leave is sought to table those two OIA responses. Is there any objection to them being tabled? There is no objection; they can be tabled.

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

Todd Barclay—Southland Electorate Office Allegations, Police Investigation, and Ministerial Conduct

12. CHRIS HIPKINS (Labour—Rimutaka) to the Prime Minister: Does he stand by all of the statements that he has made, or have been made, on his behalf in this House regarding the Todd Barclay case?

Rt Hon BILL ENGLISH (Prime Minister): Yes, in the context in which they were made. I understand there is an ongoing police investigation into those matters.

Chris Hipkins: When he stated in his answer to question No. 3 in the House on 21 June: “I understand there has been an Official Information Act process. I was aware of it. I did not really take part in it.”, had he or anyone from his office indicated to the police that his statement should be withheld from the information being released by the police?

Rt Hon BILL ENGLISH: The decision on what information is released is one for the police, and I do not intend to add any comment to that.

Chris Hipkins: I raise a point of order, Mr Speaker. It was a direct question as a result of a statement the Prime Minister made in the House in his capacity as Prime Minister.

Mr SPEAKER: I am going to invite the member to repeat the question.

Chris Hipkins: Thank you. When he stated in his answer to question No. 3 in the House on 21 June: “I understand there has been an Official Information Act process. I was aware of it. I did not really take part in it.”, had he or anyone from his office indicated to the police that his statement should be withheld from the information being released by police?

Rt Hon BILL ENGLISH: I just give the same answer I gave before. It is up to the police to decide what, according to the law, should be released, and, as it happened, everything has been released.

Chris Hipkins: I raise a point of order, Mr Speaker. I am well aware of what the police’s responsibilities are and that they make the decision. I asked what the Prime Minister indicated to the police.

Mr SPEAKER: We have had the question twice. I cannot do any more than that. The Prime Minister is responsible for his answer. It will be judged by the House and by the public.

Chris Hipkins: Why will he not tell the House whether he or anyone from his office indicated to the police whether his statement should or should not be released as part of the Official Information Act request?

Rt Hon BILL ENGLISH: For two reasons. One is that police make the decision about the release of any statement, and all statements have been released.

Chris Hipkins: Why did he tell the House on 21 June: “The employment dispute is between the employer and the employee. I was absolutely no party to that, and I do not know what the dispute was or how it was settled.” , given his police statement reveals that he had detailed knowledge of what the dispute was about, and his own text messages set out his knowledge of how the dispute was settled?

Rt Hon BILL ENGLISH: I disagree with the member’s assertions.

Chris Hipkins: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I will hear from Chris Hipkins.

Chris Hipkins: The question asked why the Prime Minister told the House something. He has not addressed that question.

Mr SPEAKER: I think that on this occasion he has. There was a very lengthy question, which started with asking why the Prime Minister made some statements in the House, and then the member’s question went on, and the Prime Minister has taken his opportunity to answer it that way.

Chris Hipkins: When he stated in his answer to oral question No. 2 in the House, on 20 June, “I would expect any Minister who became aware of possible breaches of the law to bring it to the attention of the authorities.”, was he aware of any other allegations regarding breaches of the law by Todd Barclay that he had not brought to the attention of the police?

Mr SPEAKER: Again, in so far as there may be prime ministerial responsibility, the right honourable Prime Minister.

Rt Hon BILL ENGLISH: Again, all the matters of which I have relevant knowledge have been dealt with publicly, and the statements to the police have been released.

Chris Hipkins: I raise a point of order, Mr Speaker. My question asked about the standard that the Prime Minister has set for all Ministers in his Government to inform the police of any information they have about whether anybody has breached the law. I asked the Prime Minister whether he had informed them—

Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat immediately. I will, on this occasion, allow the member to repeat the question. As I listened to the question I did wonder whether there was prime ministerial responsibility, and that is why I gave that introduction as I called the Prime Minister. I will allow the question to be asked again, but it will then be for the Prime Minister to answer in the way he sees fit.

Chris Hipkins: When he stated, in answer to oral question No. 2 in the House, on 20 June, “I would expect any Minister who became aware of possible breaches of the law to bring it to the attention of the authorities.”, was he aware of any other allegations regarding breaches of the law by Todd Barclay that he had not brought to the attention of the police?

Mr SPEAKER: Again, in so far as there may be prime ministerial responsibility, the right honourable Prime Minister.

Rt Hon BILL ENGLISH: I simply repeat my answer. What I knew was communicated with the police, and the relevant statements have all been released. [Interruption]

Mr SPEAKER: Order! The member will stand and withdraw that remark. [Interruption] Because I have asked him to, please.

Chris Hipkins: I withdraw. I raise a point of order, Mr Speaker. Are you ruling that “slippery” is now a non-parliamentary term?

Mr SPEAKER: No, I am not. I am ruling that that was an interjection that was likely to create disorder—[Interruption] Darroch Ball, if you interject again when I am on my feet, you will be leaving the House. I am not ruling words in or out. I judge words on the occasion, depending on the temperature of the House. I asked the member to withdraw. He did so, and I am grateful that he did.

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: I just need to make something quite clear to the member. I have made a decision. The member is now in a position where he may attempt to relitigate that. As the member saw last week, I take such relitigation very, very seriously. But if the member was to raise a fresh matter, and nothing to do with what has just occurred in the House, I am quite happy to hear that.

Chris Hipkins: I will try to make it fresh.

Mr SPEAKER: I just point out that the member had better make it fresh, otherwise he will be leaving.

Chris Hipkins: Absolutely. If you rule, in any context, that a phrase is unacceptable for an interjection or for a member to use in a question to a Minister, will you also therefore make sure that that phrase is unacceptable for a Minister to use in an answer? I can count multiple answers where Ministers have accused Labour members of being slippery, and you have never ruled them out of order.

Mr SPEAKER: The member is very dangerous on this point because he is exactly relitigating. As I say, I am not ruling any words in or out. I do not think I have ruled a word out since I have been Speaker. I judge everything on the text and the tone and the demeanour of the House at the time.

David Seymour: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear from David Seymour.

David Seymour: I take offence at Darroch Ball calling you, Mr Speaker, stupid while you were on your feet. If he is going to get away with that, we might as well all go home. I think he should withdraw and apologise.

Mr SPEAKER: Order! I did not hear that remark. Did Darroch Ball make that comment? [Interruption] Order! I have asked the member. A member’s word must be accepted. It has been accepted. [Interruption] Order! I call on Government order of the day No. 1 [Interruption] We have just got too much noise. I called on Government order of the day No. 1; I actually could not even hear the Clerk because of the level of interjection.

Darroch Ball: I seek leave to make a personal explanation.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is none.

Darroch Ball: I would just like to make it clear to this House that I did not call you stupid, Mr Speaker; I said that it was stupid.

Mr SPEAKER: I will leave members to judge that, for their own benefit.

Bills

Outer Space and High-altitude Activities Bill

Third Reading

Hon SIMON BRIDGES (Minister for Economic Development): I move, That the Outer Space and High-altitude Activities Bill be now read a third time. The bill establishes a new law to govern space activities conducted from New Zealand and by New Zealand nationals offshore. It covers the launch of space objects such as rockets and satellites into outer space and regulates space launch facilities. It also establishes a regime to govern certain high-altitude activities such as high-altitude balloons.

People rely on space for everyday services like telecommunications, high-speed internet, navigation and place-based information, climate monitoring, and emergency management. The rapid evolution of space technology is creating new opportunities for innovation and entrepreneurship, recognising the potential for significant economic and innovation benefits. The purpose of the bill is to facilitate the development of a space industry while providing the necessary protections to manage the risks associated with space activities, and to meet our international obligations.

When I listened to the speeches during the Committee stage a consistent theme was that this bill is a very significant and exciting piece of legislation. It creates opportunities for New Zealand to be part of a global space economy that will generate real economic benefits for New Zealanders. The bill captured the imagination of members of Parliament. We heard about the possibilities that a New Zealand - based space industry will create, such as high-value jobs, exciting career paths, and a more diversified economy.

I was elated, like so many New Zealanders, when I saw Rocket Lab’s recent successful test launch from the world’s first private launch facility on the Māhia Peninsula. It epitomised what this bill is about, and that is enabling New Zealand to bring its talents, skills, and technology to the world stage.

This bill provides a regulatory framework for the space industry. It allows companies to operate safely, while encouraging innovation and industry development. The bill puts in place a number of controls on who may participate in space activities. These controls include ensuring the applicant has the necessary technical capability, can demonstrate that they will manage public safety throughout the operation, and is a fit and proper person to hold a licence to undertake the activity.

The bill also enables the responsible Minister to decline an application if he or she is not satisfied that the operation would be in the national interest. The ethos of this bill is to take a flexible and proportionate approach to managing risk. Overseas experience has shown that imposing onerous requirements generally on all industry participants is the surest way to stifle an emerging industry. One of the tools that the bill uses to avoid this is by enabling licence conditions to be tailored as appropriate to manage a particular activity. The bill also seeks to minimise compliance costs for operators by, for example, enabling overseas licences to satisfy New Zealand’s requirements. This will help position New Zealand as an internationally competitive location for space activities.

A number of changes were made to the bill during the select committee process to clarify the intent of the provisions and improve the workability of the regulatory regime. I want to acknowledge the constructive input from the members of the Foreign Affairs, Defence and Trade Committee and the people who took the time to make submissions on the bill. The Government and, I think, the Parliament supports the development of an internationally credible, competitive, and well-connected New Zealand - based space economy that can make a difference in our everyday lives. I am confident that the bill does just that but at the same time provides a comprehensive basis for regulating space activities and managing risks. I commend the bill to the House.

Hon DAVID PARKER (Labour): There was no need to regulate outer space and high-altitude activities in New Zealand until they started to happen, so it is a good thing that we are actually having to do this—

Hon Simon Bridges: That’s pretty deep, dude.

Hon DAVID PARKER: “Pretty deep.” he says. Well, Minister, thank you for that compliment. There is no doubt that the trigger for this has been Rocket Lab’s success, and on all sides of the House we celebrate that. I know that one of my colleagues recently informed me that some of the technical capability that lies behind this mainly carbon fibre rocket arose out of earlier America’s Cup activities, where the carbon fibre industry was, effectively, stimulated by those yachting events in past years. That led to the growth and capability of one of the technologies that is now used by Rocket Lab to send these rockets into space.

The legislation is good legislation and Labour supports it, but referring to the Minister’s comments about how important this sort of thing is for New Zealand’s economic growth, I think it falls to me to highlight why it is that we need to do better in terms of growing both our exports and our productivity, and both of those things are linked.

This Government came to office in 2008 on the promise to increase exports from 30 percent to 40 percent of GDP—i.e., exports would become a larger proportion of our economy. Since then, in the 9 years that it has been in Government, it has overseen a decrease in exports as a proportion of the economy, and exports currently sit around 27 percent of GDP—far from having increased from 30 towards 40 percent of GDP, they have gone backwards. To the end of the forecast period in the latest Budget documents produced by the Government, the forecast is that by the end of that period they still do not even get back to 30 percent of GDP.

We have to ask ourselves in this House why that is. Why is it that our exports are falling? A large part of that is because of the poor productivity story that we have in New Zealand. In the last week we have seen two pieces of information in that regard that should be concerning us in the House. The first is that GDP per capita fell 0.1 percent in the March quarter, having fallen 0.2 percent in the prior quarter. So that is two quarters in a row where productivity per capita has gone backwards. Per capita per hour worked fell even more by 1.3 percent in the year. So the fact that nominal GDP has gone up has been driven by population increase, not by the increasing cleverness of our economy. It has been, effectively, more people consuming more goods and services in New Zealand that has been the driver of growth. Indeed, the key difference was the 2.1 percent rise in population in the year.

So the OECD was here doing one of its periodic reports on New Zealand just last week. It looked into this issue, and it made the point that New Zealand’s productivity growth is poor and it is worse than Australia’s. Again, we should be holding the Government to account for the poor export and productivity performance: exports going backwards as a percentage of the economy and productivity growth being very, very lacklustre. The OECD said that we cannot rely upon the likes of the outer space bill to fix that and we actually need economy-wide measures. It says, amongst its recommendations last week, that we need to review the tax system—we know that we have got some terrible tax imbalances in New Zealand driving investor prices paid for housing in Auckland ever higher because of the tax advantages people get holding houses for speculative capital gains, whilst we have got under-investment in the productive economy. So it says we should be looking at those issues as a country.

Further, it says that Government should be increasing its spending in subsidies for research and development expenditure, and one of the big differences between this side of the House and the Opposition and the Government benches is that we think that we should have a research and development tax credit so that there is a tax incentive for greater investment in research and development. This is because despite the success of Rocket Lab, as a country we are still one of the poor performers in the OECD when it comes to investment in research and development.

So this bill, good though it is, in respect of regulating activities that are firing objects into high altitude or into space, does not do anything substantial to cure those problems that are at the heart of New Zealand’s low productivity, which affects people in their daily lives, because wage growth for two-thirds of New Zealanders in the last year was lower than inflation. That is what happens when you have poor productivity growth: the economy cannot afford to pay people higher wages in real terms. That is the consequence of the last 9 years of economic management, or mismanagement, by the current Government.

In respect of the details of this bill, one of the changes that was recommended by submitters to the bill—we have other actors in the New Zealand economy who are concerned with outer space and high-altitude activities, notably around Invercargill, where for some years they have had a space monitoring station there, which was co-funded by the European Space Agency because that satellite tracking station can monitor satellite activity in the southern skies in a way that cannot be done from more northerly parts of the world. The Southland economic development unit—that is not its correct name, but that is the nature of its role—

Dr Megan Woods: Venture Southland.

Hon DAVID PARKER: Venture Southland, thank you, Dr Woods. Venture Southland, with funding from the European Space Agency, set up this space tracking station south of Invercargill, which brings some revenue into the area. It made the point that if New Zealand is going to be regulating this space, we have to make it clear to people that our intentions are peaceful. We are not North Korea. We are not trying to increase armaments out in outer space. We are not intending to put into space things that could shoot down other satellites. Our objectives are entirely peaceful. That was not altogether clear on the face of the wording in the original bill, which referred, rather blandly, to our international obligations but did not describe what they were.

In fact, the international obligations that are now referred to in the purpose clause, clause 3, of the bill record the obligations now in the Outer Space Treaty, which is an international treaty, under the United Nations, to which we are a party. Those obligations include not to launch things that are weapons of mass destruction or nuclear, not to establish military bases, and not to test any weapons in space. These are emphasising that our intentions in respect of what we are doing are civil.

There are some things that of course can be used for both things. If you put a satellite into space that is used for global positioning purposes, then those global positioning services could be used for both military and non-military uses. You cannot go so far as to, effectively, regulate anything that is going to space for global positioning, because it could of course always be used for both purposes. But the intention is, with this legislation, that it be non-military.

There are also rules that are being imposed through permits. Because the number of satellites is proliferating, and a tiny little piece of a satellite travelling very fast can whack a hole in another satellite or knock it off its orbit or ruin it, we have got to be very careful that we are not creating additional junk in space. So the Foreign Affairs, Defence and Trade Committee looked into how the relevant licensing provisions in this legislation will cause New Zealand to do its bit to make sure that we are not increasing the amount of space junk up there that can cause danger to other satellites that are already in orbit.

So, with those comments, I am pleased to record that the Labour Party is supportive of the Outer Space and High-altitude Activities Bill. Like other members of the House, we congratulate Peter Beck and the other inventors who lie behind this marvellous technology. There was a story told to me recently where someone was advertising in the United States for a prize for the first person in the world to 3-D print a pump. Of course, that is what this company has already done. It has used 3-D technology to print, in smaller form, a form of electrical pump to pump the fuel from where the fuel is stored in the rocket to where it is burned in the rocket. That is only able to be done, on the small scale, because of the innovation shown by this wonderful company.

TODD MULLER (National—Bay of Plenty): It is a great privilege to be able to rise and take a short call in support of the third reading of the Outer Space and High-altitude Activities Bill. If I could just start, perhaps, with an apology: when I first saw this bill come across the Foreign Affairs, Defence and Trade Committee work programme and saw that it was an enabling bill to create the regulatory framework for our rockets to be launched into space, I have to admit I had a much smaller vision of what was envisaged with this bill. In my mind, I saw a sort of backyard-type operation.

It really was not until I stepped through this with my select committee colleagues and listened to Peter Beck’s vision and understood what incredible technology they have brought to bear—as David Parker has just stepped through some examples of—that the bill spoke to the huge opportunity that exists here for New Zealand. I have to admit, I felt a call back to my youth when I saw that Facebook post of the countdown of our first Electron rocket up into space at the end of May, counting down from 10 to zero. It was a black and white rocket that was not 2 metres tall; it was 18 metres tall. It looked pretty significant to see it take off, pretty much like it does at Cape Kennedy. As someone who has always been hugely fascinated by space and exploration, I felt more than a frisson of excitement when I saw that. I thought: “Actually, this is really cool.” And it is really cool that it is happening in New Zealand.

As we have heard already from Simon Bridges, I do think the Government should be applauded for doing the thinking that enables this to continue as a business opportunity in New Zealand, but also for the investment that has come through our Business Growth Agenda strategy to help enable technologies like this to take off—if you can excuse the pun.

I just want to take issue with aspects of Mr Parker’s—it had to be said—comments. The tech sector was in its infancy 7 to 8 years ago, and it is now New Zealand’s third largest export sector. It is growing rapidly, contributing $16 billion to GDP, a significant advance on 8 years ago. It is growing incredibly fast—28,000 firms, including a number that are involved with the Rocket Lab initiative, employing just on 100,000 people. This is an incredibly vibrant part of the New Zealand economy, and I would venture to suggest that not many in this House could have imagined, even as little as 3 or 4 years ago, our being able to stand here and talk to passing a bill that enables space launches from New Zealand in a genuinely scaled-up commercial way that is delivering satellites and other useful equipment into space.

Peter Beck and his team should be congratulated, as too, in my opinion, should this Government for the part that we have played to enable it. This bill is a key part of the ongoing framework to ensure that this will be successful. I think we have the balance right between public observation and participation to the extent that we can, bearing in mind this is highly sensitive technology, but we are also creating the conditions to provide the investors in this opportunity—which I suspect will be significant—to have the surety of the regulatory regime to be able to put the money behind the vision. Some of the expectations that sit on the table in respect of this are that this could be a $600 million to $1.5 billion industry over the next 20 years. I think that should be something that we all should promote and talk to in our communities as an example of what New Zealand can actually achieve.

I was very pleased with the way the bill progressed through the various conversations that we had. There were, obviously, the stages through here but, particularly, the work we did as a select committee. Typically, it was very collaborative. Can I acknowledge Minister Simon Bridges and also all of the cross-party people involved in the Foreign Affairs, Defence and Trade Committee. I think we probed quite effectively the areas of concern and issues that were raised, and I agree with Mr Parker, actually. Where we landed in respect of clarifying the sorts of peaceful purpose expectations that we have as a country in respect of this framework by more explicitly tying this bill to our international obligations and by bringing some transparency around what they are was, I think, a very useful step forward.

I am not going to take much more of the House’s time. I think this is a superb bill, and I very much support it in its third reading. Thank you.

Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call on this bill. I think many of us have enjoyed its passage through this House. Like speakers before me and, I imagine, after me, I would like to congratulate Peter Beck and the team at Rocket Lab on what is a remarkable achievement. To see New Zealand join the ranks of 10 other countries that are capable of doing this is, I think, something that all of us feel pride around.

I think the story of Rocket Lab and what it has achieved is an important one for us as legislators in this House. It is a story of science and innovation, and it is a story of how long some of these projects take to come to fruition. So I share the enthusiasm of the previous speaker, Todd Muller, for what has been achieved here, but I would like to caution him about taking political credit where it is not necessarily due, because this is a project that goes back many years, many years before the Business Growth Agenda was even imagined.

This is something that the previous speaker said none of us in this House could have imagined was possible 3 or 4 years ago. Well, that is not necessarily true. If we go back to 2007, Rocket Lab had designed its suborbital rocket, which was capable of reaching heights of up to 150 kilometres, and it had plans to send scientific packages, DNA, and even human ashes above Earth, according to its business development manager, Mark Rocket. This is back in 2007 when it had got to this point where it was capable of putting things up 150 kilometres in the air, so a lot of work had already occurred to get to that point.

Then, I think, we do need to recognise the role that the previous Government and a previous Minister for Economic Development, Minister Trevor Mallard, played in bringing this project through. It was—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am going to—I do not want to appear to be ungracious, but I am currently in the Chair and it is inappropriate for the member to bring me into the debate.

Dr MEGAN WOODS: OK, thank you. I was just paying due credit. A previous Minister for Economic Development, who attended Rocket Lab’s launch way back in 2007, said it would enhance New Zealand’s emerging reputation as a developer of first-rate technology and components, so I think that to imagine that this has happened because of a scheme that has been put in place in the last 3 or 4 years simply does not understand what an innovation cycle looks like.

The kind of willingness to back over the long term, which we need to have, transgresses parliaments. It is something that we should all take from this story of Rocket Lab and its success here, because many of the things that we want to achieve in this technology space are not going to show us the fruits in the kinds of parliamentary cycles that we are often accustomed to. I think this is testament to that and to a previous Government for having the vision and, actually, the courage to back such a project, which 10 years ago—a decade ago—would have sounded mighty fanciful.

The other really important part of this story to draw out and for us to learn from is around the cross-collaboration that can happen across technology sectors. My colleague the Hon David Parker has already talked about some of the carbon fibre technology coming from the America’s Cup technology that was developed around those boats. This is what is so important around getting critical mass of technology in this country, so that we can have that kind of cross-pollination and collaboration across industries and so that we can grow an economy that is based on innovation, that is based on technology, and that is based on knowledge. This speaks very clearly to that. It is why, when you have a success like this or like the technology in the America’s Cup space, you cannot always predict what the spin-off commercial opportunities or the further technology opportunities are going to be from that work. I think that is something that we as legislators should always remember.

The other thing is that as we are passing this legislation, I think it is apt and timely for us to think about the kind of economy that we want to create if we are seeing Rocket Lab as one of the success stories here, and think about what we need to be doing to plan for that future. That is why I am most proud of the work that the Labour Party has done over the last 3 years in the Future of Work Commission, where we have thought long and hard about the big-picture thinking around what a transformation of the New Zealand economy looks like and what we are going to require. This goes right back into our education system, right back into our early childhood education system, into our primary and secondary and then our tertiary systems. We are thinking about what the kinds of skills are that future workforces are going to require.

I am not saying that in every primary school we should be putting rocket technology on the curriculum. What I am saying is we should be educating our children entering early childhood education and primary school today to have the kinds of skills where they can turn their minds to these kinds of subjects should they want to. If we are intent on creating an innovative economy then we have to be far more innovative with our education system, and, importantly, link that to our future workforce requirements. I think that the bill we are passing here, the enabling regulatory framework that is going to allow this industry to flourish in New Zealand and allow for this to happen, needs to sit alongside some other thinking within Government and within this Parliament that is long-sighted.

My colleague David Parker went through many of the amendments that were made at the Foreign Affairs, Defence and Trade Committee to this piece of legislation. There were 11 submissions received in total on this piece of legislation, and it is fair to say they were all substantial. They traversed many areas, some of which were understandable and good submissions to get in terms of civil aviation and what the interplay is that we are talking about in the area of airspace, which goes beyond what has previously been regulated—what the interplay and the safety concerns were there. There was also the submission that Venture Southland brought that the Hon David Parker mentioned, which talked about it needing to be explicit in this legislation that this is for peaceful purposes. Actually, we are talking about New Zealand being among a group of only 11 countries that are launching rockets. With that comes a great responsibility, and I think that for us here in New Zealand knowing that we are doing this for peaceful purposes is critically important.

Labour is more than happy to support this legislation. We see that it is a long-term project that is bearing fruit, and what we hope is that we can all, across this House—whatever side or corner of this House that we are sitting on—take the lessons from this: the need to take a long-term view of innovation and the kind of commitment that it requires, the kind of courage that that initial investment sometimes requires, and that one of the most difficult things about politicians being involved in innovation is that there is political risk if you do it well. Politicians do not want to come to the House and answer questions about failed projects, but anyone who has worked in the innovation sector knows that to have success you have got to take risks. In fact, you could say that a very successful innovation sector would be counting on a very high failure rate, and that is not always politically palatable. But what we have here is a success story that we can all be proud of, and I think we can also be very pleased that this House is putting into place the regulatory regime that we require in order to make sure that this operates in an orderly and safe way, and for the right purposes, in our country. Thank you.

Dr SHANE RETI (National—Whangarei): It is a pleasure to take a final call on the Outer Space and High-altitude Activities Bill. With this bill, New Zealand becomes the 11th country into space and joins an illustrious pedigree that includes the Soviet Union, the USA, France, Japan, China, the UK, the European Space Agency, India, Israel, Iran, and North Korea. Indeed, some of our larger trading partners were once launch capable—the United Kingdom springs to mind. It is no longer launch capable, amalgamated into part of the European Space Agency.

The business case for Rocket Lab is in the upstream pathway. This is the pathway that focuses on sending objects into space. The downstream actors are the companies that utilise and provide space-related services to consumers. When we look at the value chain of what is a $300 billion space economy, we see that the upstream actors are responsible for 5 percent of that economy, satellite operators 10 percent of the space economy, and the companies that actually utilise space communications are 85 percent of the space economy.

The economic benefits of a rocket launch industry in New Zealand include the direct commercial benefits and also the indirect benefits. Some of those indirect benefits may certainly be less clear and less quantifiable, but I would like to briefly highlight some of them. Certainly, as a direct benefit there is the additional employment by Rocket Lab to scale up to launch capacity. There is additional activity and employment in supplying industries, those that provide components and logistics. There is space tourism—international visitors or New Zealanders watching rocket launches, and members of the satellite industry or their clients attending a launch. There are construction and launch activities, cluster effects—the development of related clusters, for example in the area of satellite manufacture and 3-D printing. There are aspiration effects; achievements in aerospace have been shown to have a significant impact in motivating prospective students and researchers in the field. There are knowledge and technology spillovers—some of my colleagues have talked about that—the benefits from technology, information, and knowledge that is generated by Rocket Lab being applied in other companies or sectors. There are prestige effects—enhancements to our national prestige from having a space industry. And there are human capital effects—the benefit to New Zealand from an increasing proportion of highly skilled personnel.

One of the competitive advantages that Rocket Lab utilises is cost. At a projected cost of roughly US$5 million per launch, this is extremely competitive. It is at least less than 50 percent of the current international offerings, which include $60 million for the Falcon 9 launch, through SpaceX, and $200 million through the European Space Agency, the Ariane 5 rocket. Our geographical location gives us some advantage. New Zealand provides the opportunity to launch into a wide range of azimuths for satellites, especially those that need to go into polar or equatorial orbits. Equatorial launches are desirable. The French Guiana site is a very desirable site for launching a rocket. Of course, around the equator you have the largest circumference of the Earth, so you have that large circumference traversed in a 24-hour period. That means you get what is called launch inertia—a benefit of roughly 1,670 kilometres per hour just by launching at the equator, which, of course, reduces your fuel costs. We do not have that benefit, but one of the trade-offs here is air traffic. One of the benefits we do have is that because we have less air traffic we are able to launch more rockets.

If we look at year-on-year economic return, it is predicted at $30 million to $80 million per year. This is on a base case of one launch per week, an 8 percent discount rate for the direct benefits, and a 50 percent discount rate for the indirect benefits. This is cost-efficient Kiwi ingenuity, making a mark on the international stage and staking out a diversified future economy for New Zealand. I am very proud to recommend this bill to the House.

GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou, kia ora. I rise to support this bill in its third reading, which establishes the launch regime for companies such as Rocket Lab, which is going to be launching its 17-metre carbon fibre Electron rockets into orbit, something this whole House can join in congratulating.

There is a famous photograph in my office, one that is a personal inspiration to me and, in fact, was an inspiration for the movement that saw the Green Party grow and rise around the world. It is the famous Earthrise photograph. Taken from space from the Apollo 8 capsule in 1968, it showed the Earth rising above the barren, hostile vastness of the moon. For the first time, you could see the fragility of Earth. I raise this because the issue we are debating here is around the permitting regime for launching rockets into space—what we can get out of the economic spin-offs, the jobs, the GDP, etc. The other thing we can get out of exploring space is knowledge about ourselves, knowledge about our world, and, in fact, the growing environmental consciousness we have seen in the decades since the Apollo space programme.

This is a good bill. We have managed to improve it in the Foreign Affairs, Defence and Trade Committee. I would like to acknowledge all the submitters and the officials involved. There are three key areas I would like to touch on where the bill has been improved. The first is related to how the space race started at the height of the Cold War years, after the launch of sputnik. It was seen primarily as an offensive or defensive technology. What we have managed to include in this bill is a more modern understanding of the uses of space, which is a peaceful use of space. While the Green Party and the Labour Party were pushing incredibly hard for an explicit purpose clause for the peaceful uses of space, we were not able to get that through. But what the committee was able to reach by consensus was some very specific language that it is prohibited to place into orbit any nuclear weapons or weapons of mass instruction; “establish military bases, installations, or fortifications on celestial bodies:”, or test any types of weapons or manoeuvres in space. That was a significant improvement on the original bill.

Secondly, an area close to my heart in the Green Party, is the issue of orbital debris. There are 20,000 objects out there orbiting in space that are larger than a baseball. There are 500,000 objects larger than the size of a marble. If you have seen the film Gravity, you will understand the Kessler effect, where we can see potentially catastrophic impacts of these space objects. Already there is quite a huge cost involved in space junk, as it is called, but it could cause a catastrophic change, literally, to our world’s use of technology if in fact it did go all pear-shaped, as we saw in the film Gravity. So it is good that this has been addressed. It was a little bit of an oversight in the original legislation that the Minister for Economic Development had not been cognisant of an orbital debris mitigation plan, but it is good that that has been included.

The third area, of course, is the debris protection areas that a Minister can enact if there has been an accident. This is the scenario where debris has actually been scattered across a beach or a farm or at sea. In the first reading, we raised some significant concerns on the limits to human rights and limits to media reporting if a debris protection zone was enacted. Of course, this comes from our international obligations under the Technology Safeguards Agreement (TSA) that because these are, basically, intercontinental ballistic missiles, you want to protect the sensitive technology within the spacecraft. We think that is entirely reasonable. We do not want to see nuclear technology, or the means by which it can be carried, proliferate across the world, and we are happy that it has been clarified that the media reporting can still happen outside. Basically, the gist is that you do not want to see photographs appear on the news or be shared online of sensitive technology where we could see significant nuclear weapons harm occur in the future. We think that is entirely reasonable. It is a good bill. It is an exciting industry that is potentially going to flourish, and we have seen some improvements in the select committee for which I would like to thank the members.

I am tremendously excited by the potential for Rocket Lab. As we have heard from other members, we have actually seen New Zealand join the space race as only the 11th nation to have reached orbit. I remember travelling overseas and telling people of this fact that we were the 11th nation, and, in fact, the only nation to have done it without a national space agency; for example, NASA in the US. We are the only country to have done it entirely privately. It is good to see we have now got some Government R & D support for Rocket Lab as well. It is tremendously exciting, and people were blown away overseas.

They were doubly blown away when I said that we were launching carbon fibre rockets. They thought it was incredibly difficult technology to master, but when I said this is how we have our yachts being built for the America’s Cup, for example, they were doubly blown away. It is a good example of how investing in new technology and innovation can spur new sectors of our economy. I am rightfully proud of New Zealand. We have got some amazing examples of technological innovation occurring in our economy, and, in fact, since 2002 to 2013, this was the fastest-growing area, as a percentage of GDP, of any OECD or developed world economy. We should be rightfully proud of some of our champions, like Xero, Rocket Lab, etc., right at the forefront of these new technological industries.

When you look at space, it is a $256 billion global industry, employing more than 900,000 people in 2013. It is exciting to think that New Zealand could get a chunk of that, and we are going to see spin-off industries, hopefully, in terms of micro-satellites, science education—it is fantastic. The challenge for New Zealanders is that we have got some great exemplars, but how do we transition to an actual innovation economy, because we are still dependent on a few raw commodities for the bulk of our exports and we still invest less than half of the developed world average in research and development. Our scientists patent four times less than the developed world average. If there is a space race, in terms of innovation and technology, we are not getting at the forefront, where New Zealanders want us to be.

Moving on, though, we are going to see the launch of a space industry in New Zealand, which all New Zealanders, I hope, can be excited by. But if we stop and think, globally there is $1.6 trillion annually invested in militaries. Often I have the debate with people: is space a good thing to be investing in when there are so many problems on Earth? I would say, look, when you see the $1.6 trillion invested just on arms and warfare around the world—if we could cut that back, there is more than enough to feed, clothe, house, give power to everyone, and still explore space. When you look at the US, it spends $600 billion on its military, representing 3.3 percent of its GDP; it spent just $20 billion, or 0.1 percent of its GDP, on space in 2016.

There is so much still to learn out in space. We are discovering extra solar planets. Just in the last year, we have seen gravitational waves potentially confirmed. There are still huge questions about how our planets were formed in this solar system. We have seen spin-offs—NASA, rightfully and proudly, points to Tang, teflon, and Velcro as some of the spin-off technologies, but there have been a host more that we use in our day-to-day lives. One of them that I think has been the most profound is solar technology, from that first Vanguard satellite launched into space with the solar panels attached. Across my lifetime, we have seen the costs of solar drop 99 percent, and now we are seeing the growth of clean, renewable electricity so that we do not have to burn coal.

From our exploration of space, we have learnt more about our planet in terms of environmental satellites. We have discovered that there are thousands of planets in outer space, many in the Goldilocks zone where water can exist, but when you look at our neighbours—look at Mars, a planet that ran out of atmosphere, that did not have enough carbon dioxide, and that got too cold for life. Our other nearest planet, Venus, is a planet that has too much carbon dioxide. It literally is as hot as the surface of the Sun on Venus—too much carbon dioxide. It is a salutary lesson for us to make sure that we can keep our planet in balance.

Likewise, in the last 10 years we have discovered water on Mercury, on Pluto, and vast oceans on moons like Io—a good example that while water is all around our solar system, and potentially all around the universe, it is our water on Earth that we need to protect. That is why this year the Green Party is championing the two-thirds of our rivers and streams in New Zealand that are considered unsafe for our kids to swim in. So as we go explore the vast reaches of space, as we start a space industry in New Zealand, and as we learn more about what is out there, let us also act more on what is on our planet and protect it. Kia ora.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Just before I call the member Darroch Ball, I am going to just indicate to members that the House rules are very clear that members do not use the phone function of cellphones when the House is sitting. There are a number of members who have phones at their desks for particular purposes—senior members and whips—and my ruling is that members can use those phones, but not cell phones, while the House is sitting.

DARROCH BALL (NZ First): It is a pleasure to rise on behalf of New Zealand First and my colleague Fletcher Tabuteau, who saw this bill through its progress through the House and sat on the select committee as well, to speak on the Outer Space and High-altitude Activities Bill. I am just going to take a very quick call and reiterate a couple of the points that New Zealand First has made throughout the progress of this bill through the House.

I have to say, firstly, that 3 years ago I never really envisaged myself standing in the House and talking about anything to do with outer space, so it is quite unique and an exciting and fun time for this country—and for me as well, speaking about it. It has already been mentioned that we are one of now only 11 countries that have the capability of launching rockets into space. I think that is a very good thing. It is a very exciting thing for this country, and we need to make sure that we have the legislation to ensure that everything is OK to do that.

There are a number of things that this legislation does, but three of the main ones are to facilitate the development of the space industry in New Zealand, and that is a great thing; to codify international obligations, ticking the boxes; and also to manage our liability that arises from those obligations. As we move into the modern age, we have the ability now in New Zealand to really be able to be at the forefront of that movement and to lead changes. We always use new and developing and evolving technologies, and this legislation will be able to help us use and develop that technology. More and more, we are going to need to use and access space, and the ability to put rockets up into space, and Rocket Lab was the main instigator, I guess, of this legislation.

There is one point that Fletcher Tabuteau did bring up previously, and that is our party’s disappointment with the Rocket Lab situation, where this Government put millions of dollars into the investment of Rocket Lab only to have Rocket Lab sold overseas to the US, and there was no return to the taxpayer of New Zealand. So we need to ensure that when we do develop that technology and the market and different companies—we need to ensure in the future that we do get returns in New Zealand and for New Zealand entrepreneurs and New Zealand companies.

Another point was that New Zealand First is happy with the wording of the legislation. It is in quite a flexible way that the legislation has been written and developed by the Foreign Affairs, Defence and Trade Committee. That is obviously due to the rapidly evolving nature of the technology, and this legislation will be able to account for that. Again, we must ensure that for any development within New Zealand we must have a priority and a focus on New Zealand businesses and New Zealand benefits.

New Zealand First congratulates the committee, of which Fletcher Tabuteau was a part. This is a great piece of legislation, looking forward and into the future, and New Zealand First supports it wholeheartedly. Thank you.

Hon JO GOODHEW (National—Rangitata): I too join in, in essence, with the rest of the members in the House in being pleased to be witnessing such wholehearted support for this bill, the Outer Space and High-altitude Activities Bill. We have got to the third reading now, and I imagine that it is rare to see such a united force. But what does intrigue me a little, and I said this, I think, in my second reading speech—great ideas have many authors, do they not? But, in fact, we need to put this great idea at the feet of the people that Peter Beck works with, and with him, the man. In doing so, we need to recognise that the Parliament’s place is in wrapping the legislation that is required around such amazing endeavours. We have done so, and I must say—although I was a member of the committee for only part of the process—I have learnt a lot. I am not only intrigued but awestruck by some of the knowledge of the previous speaker for the Green Party, Gareth Hughes, about this. It is clearly an area that he enjoys an awful lot.

We have already talked about the tech sector and its worth to New Zealand—$16 billion of GDP and growing fast. But what is required is not only that the Parliament, as it has done in this case, passes the legislation to wrap around—both in New Zealand and the international connection through treaties, etc.—but also that it provides the safeguards and everything that is required, and is far-sighted. I endorse other members who have talked about needing to play the long game here.

I take issue with the previous speaker, Darroch Ball, saying that New Zealand is not getting returns. When New Zealand succeeds on the world stage, it gets a reputation for being a place where technology succeeds. That is what brings new investment to New Zealand. That brings jobs to New Zealand. That keeps scientists in New Zealand—technology innovators and those who want to have an exciting job creating new and unthought-of innovations.

The work that has been done to support the tech sector, and this project as well, is happening within the Business Growth Agenda. Other parties will have other ways of addressing that, and we have heard some of those here today, but the Business Growth Agenda wraps the sort of support that is required in our economy entirely around a project like this.

I do want to finish by saying that I hope that if Peter Beck is reading the Hansard—which is now however many years old—he does not at all feel that this House has lectured him in any way, shape, or form. In fact, we need to provide support, not just now but into the future, to a man who has been very far-sighted and who has created something New Zealand can be proud of. Although we have got a great geographic location for sending these satellites up into space, they are just the beginning of what can be a fantastic business here in New Zealand. Rocket Lab is innovative technology that we as New Zealanders will take great pride in, although the pat on the back is certainly, deservedly, going to Peter Beck. I thank you and commend this bill to the House.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Adrian Rurawhe—5-minute speech.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe e Te Māngai o Te W’are. It is a great privilege to speak on the Outer Space and High-altitude Activities Bill in its third reading. First of all, like a number of colleagues in the House I just want to acknowledge again Rocket Lab and in particular its CEO Peter Beck and his entire team for their tenacity, their innovation, and their drive to get the project to where it is today, which, of course, requires that we have some legislation to allow that to happen.

Just briefly speaking on the purpose of the bill, it is, as others have noted, to facilitate the development of the space industry in New Zealand and also to implement our international obligations, which are many. I also want to touch again, as I did at the Committee stage, on the peaceful purposes for developing the space industry. We come from a country, New Zealand, in which we are very proud of our history of upholding peaceful purposes—I understand those particular words were not used, but there are none the less some strong changes that have been made to the bill to ensure that these space adventures, might I say, cannot be used for war, for nuclear weapons, or for other weapons as well. I commend the Foreign Affairs, Defence and Trade Committee for that.

I also recognise that through this bill, and through the Rocket Lab initiative—they do create opportunities for the future. In particular, I certainly hope that there are strong opportunities—for young people in particular—through education. We are no doubt going to need different kinds of skilled people in the future—engineers, IT people—and I think this is certainly a project that can help enhance the opportunities for young people in the future. We certainly do need that in our country. It is a country where we currently have 90,000 young people between the ages of 15 and 25 not in education, not in employment, and not in training. So any kind of opportunity we can develop to assist young people, in particular, to get into innovative new industries like this one—we should take every opportunity. That is why on this side of the House we are certainly supporting this bill.

I also think that we should learn the lessons of the Labour Party’s Future of Work Commission, in light of this particular bill. The nature of work is changing, and we need more innovation in this country. I congratulate those who had the foresight many years ago to assist this project. As I said, my hope is that these kinds of projects, in light of the outcomes of the Future of Work Commission, develop way more opportunities to fill the many gaps that have been created because we have not had the foresight to do that before.

It is my privilege to speak on this bill. I commend again Rocket Lab and all those who have been involved in this project. Kia ora.

Dr KENNEDY GRAHAM (Green): I just want to reaffirm that the Green Party will be supporting and voting for the Outer Space and High-altitude Activities Bill in the third reading. Much has been said since the first reading on this subject. I could spend a lot of time addressing the subject, and I shall not.

JONATHAN YOUNG (National—New Plymouth): I am hoping to take a little bit more time than the previous speaker, Kennedy Graham. One thing that I think is worth noting is the Government’s Business Growth Agenda paving the way for innovation to be strongly embraced in our economy. This bill is very much part of that. The emerging New Zealand - based space economy aligns with innovation streams in our Business Growth Agenda.

One group that has recently been awarded the opportunity to set up a regional research institute is the Central Otago – based Centre for Space Science Technology. Its work is going to be about undertaking research around imaging and spaced-based measurements and satellite imagery unique to New Zealand’s region. An example of this is the offshore industry off Taranaki, because part of the consortium of the Centre for Space Science Technology is MetOcean Solutions, based in my city, New Plymouth. It is a company that measures wave and ocean currents and enables industries such as the offshore oil and gas industry to make decisions around deployment of offload vessels, drilling schedules, and the like. The work that it does, not only for this industry but for many offshore activities, is increasingly based around space technology satellite imagery.

When this Central Otago - based Centre for Space Science Technology works with a consortium, including MetOcean Solutions based in New Plymouth, and starts to do its work to enable regional New Zealand to better utilise its resources and better drive its economy around understanding weather patterns, we are going to see some of the advantages of this bill and the likes of the recent endeavours of Mr Beck and his work have great fruition for New Zealand; not just entering into this space economy around the world but—as I think one of the previous speakers Todd Muller said—the advantage of $600 million to $1.5 billion for the New Zealand economy over the next 20 years.

I think there are some great advantages. This is a fantastic piece of legislation that is enabling New Zealand to enter into that innovation space internationally. I commend this bill to the House.

STUART NASH (Labour—Napier): One thing that I do want to say is to Mr Jonathan Young. I hope you were not taking credit for this, or I hope you were not suggesting that your Government should take credit for this. It is one of the reasons why I am pleased that the honourable member Mr Mallard is in the Chair for the third reading. He will be the Speaker who passes this through. The reason I say that is—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will resume his seat. We have had a previous ruling from me on this issue. While I would express some gratitude to the member, what he is doing is out of order. The member must not bring the Chair into the debate.

STUART NASH: Thank you very much, Mr Assistant Speaker. What I would like to say is that I am very pleased that the Hon Trevor Mallard is still here to see this bill pass through the House, because Mr Mallard is in fact, responsible for—

Hon Member: He’s still doing it.

STUART NASH: No, I am not talking about the Speaker; I am talking about the member. But I am pleased that that member is listening, because it is the first time; she might learn something. But, anyway, Mr Mallard is actually responsible, personally responsible—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am going to tell the member that he has got to be a bit more circuitous, and he cannot bring me into this debate—not just where I am sitting but because I am sitting here, he cannot bring me into the debate.

STUART NASH: Not as a member?

Hon Member: No.

STUART NASH: OK.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I will give the member some advice: he could say “the former Minister for Economic Development”.

STUART NASH: OK. Thank you. Let me start again. I have got 8½ minutes—let me start again. I am very pleased that the former Labour Minister for Economic Development is here to see this bill pass through the House. The reason I say that is Peter Beck, the CEO of Rocket Lab—because let us be honest; this is about enabling Rocket Lab—does publicly acknowledge that it was, in fact, that former Minister for Economic Development who provided his company with the necessary finance to get this off the ground—that former Minister.

I visited Peter Beck not too long ago and went through his facility, and it is absolutely astounding. It really is. This is the third time that I have spoken on this bill in the House. Apart from Labour members—David Shearer, I think, was one of the ones who spoke on this originally—I have been actually astounded at the lack of enthusiasm by the Government but also by New Zealand First and the Greens about what is going on in Māhia Peninsula.

This is game-changing for New Zealand. I have heard the Greens talk about “treaty”, and I have heard Dr Kennedy Graham—with all due respect—say: “Well, don’t think that we’re supporting this, because we do it with a whole lot of reservations, etc., etc.” I have heard Steven Joyce sit there and read a monologue, as if this were an imposition on his time, to come down here. I have heard New Zealand First say: “Well, this is really bad. We’ve given this company a whole lot of money and now they’re overseas-owned.”

What they fail to recognise is what Rocket Lab and Peter Beck have actually created, what they have done in New Zealand. They have put us on the world map here. And this is not done out of—well, it is done out of Auckland, but these rockets are being launched from Māhia Peninsula. And the wonderful thing about this, in Wairoa, which is in my electorate, is that for the first time in a long time the stories that are coming out of Wairoa are fantastic. It is not about gang members or anything bad; it is about a really good-news story about how a council saw an opportunity—and it did—and said: “We can’t let this go. We’ve really got to take advantage of this.”, and, goodness me. The CEO, Fergus Power, and the mayor, Craig Little, said: “How do we make this happen?”.

The interesting thing is that Rocket Lab had been working down in Christchurch to get a consent. When I first spoke to Peter, I think it had taken about 9 months and they still had not got the consent. The Wairoa District Council issued the consent in something like 2 weeks. It was not because they did not do the work. It was not because they were lax, or anything like that. It was because they saw an opportunity; they understood the potential, and they thought: “In terms of driving growth in our area, we have got to engage with these guys, and we’ve really got to make it happen.” It is a classic case of local government almost moving, literally, heaven and earth to work with a stakeholder and a company that can drive value and drive growth. I have no doubt that this will be, over the medium to long term, fantastic for the East Coast and for Wairoa.

It will start off with space tourism. I mean, who does not want to see a rocket take off—goodness me. Peter Beck’s vision is to have one of these rockets launched every single week—every single week. So it will start off with tourism, and then built around tourism comes the infrastructure, hotels, cafes, and then out of that comes the retail stores. And then out of that, you get the hundred men and women who are based in the district working for Rocket Lab, earning significant amounts of money, sending their kids to the local schools, buying TVs, fridges, houses, and all those things that they need. This is really good, and it is happening in Māhia, and it is happening in the Wairoa district. So I take my hat off to the Wairoa District Council on this.

Let us move forward to Peter Beck’s vision. Who did not grow up and want to be a fireman or an astronaut or something along these lines? Well, this guy has taken it to the nth degree. It is astounding. You go through Rocket Lab’s factory, and it just blows your mind. The processes that they have had to go through are just astounding, and they are so minute, because, of course, if one little thing goes wrong, if they get one little rubber screw or washer wrong—boom—millions and millions of dollars up in smoke. And they have not quite got it right, and they acknowledge that. It did not quite go as high as it should have. But, for all intents and purposes, this was a huge success.

They have basically tapped out New Zealand for the experts in this area. They have gone to all the universities and they have mopped up all the really bright graduates. They have gone overseas. We talk about a war for talent; well, there is a global war for talent in this area, and they want to work for Peter Beck. They want to do it in New Zealand. That is why Rocket Lab is the first non-Government or private organisation to send a rocket into space. The other thing that they have done is they have tapped out every single manufacturer of materials that they can use in this country, so it is not as if they have just gone in and imported everything and made it and taken off.

Every single machine shop that has the expertise and the precision to produce something for Rocket Lab to go into these rockets, it has used. It has got to the point where the capacity in this country just does not exist to take it to the next level. If it did, then it would, and I have no doubt that there are a number of businesses associated with Rocket Lab that will end up growing substantially. It is like the car businesses in Detroit. You know, you have the massive, big car makers, and then around them you have the guys who make the seatbelts and the washers, and every single little industry around that. I think that in the long term this is what we will see, because we are talking about 52 launches a year.

This will redefine space. It will redefine how data is transmitted. Our kids—or our grandkids, anyway; some of our great-grandkids—will not believe that there were points in time where we did not have mobile coverage. They will not believe that you used to go to the top of a hill and wave your mobile phone around to try to get reception, because this is the sort of technology where, in the deep, dark depths of Africa, you will be able to get the same level of service as you get in Napier, which is the best in the world.

Carmel Sepuloni: You can’t get it in Bethells.

STUART NASH: No, you cannot get it at Bethells Beach. We remember those times. We remember times when you used mobile phones to make phone calls, heaven forbid. My daughter does not know that you can actually make phone calls on mobile phones.

I suppose my point is that this is not just about rockets, OK? This is not just about a really innovative and aspirational Kiwi who is making rockets. This is about redefining the way that business will be done in this country. Some of the stories that Peter Beck has told around the requirements of customers, and what they are going to do with the data when they receive it from the satellites that Peter is putting up there, just blows your mind. Now, I do not know whether that is confidential or not so I am not going to talk about them here, but one thing I would say is I think this bill is one of the most exciting bills to come through the House in my time, both in the initial 3 years and in these 3 years, because it is transformational. It really is transformational. I think that in 10 years’ time we will look back, and we probably do not realise now just how transformational this will be in terms of data.

I just want to say that I am incredibly supportive of this. There were some checks and balances, of course. I mean, we do not want people launching nuclear weapons—and the bottom line is that the site that sends these rockets into space can also launch intercontinental ballistic missiles, so we had to be a little bit careful in the legislation that we did not allow that sort of thing, because it is not really in the national interest. So there are national interest tests; the Minister has quite a lot of discretion about whether to grant a licence or not. There are the checks and balances in place to make sure that this is not used—or space is not used—for the wrong reasons.

I would just like to wrap up by saying congratulations to Peter Beck. It is absolutely fantastic. We are watching your progress. Congratulations to the Wairoa District Council; it has done an absolutely brilliant job, and I take my hat off to it. Congratulations to the former Labour Minister for Economic Development, because without his vision I doubt we would be sitting here. Without his vision, I doubt Rocket Lab would be based in Auckland, so congratulations to him as well. Thank you.

MATT DOOCEY (National—Waimakariri): I commend the bill to the House.

Bill read a third time.

Bills

Enhancing Identity Verification and Border Processes Legislation Bill

Second Reading

Debate resumed from 22 June.

The ASSISTANT SPEAKER (Hon Trevor Mallard): When we were last considering this bill, Stuart Nash was on his feet. He had 9 minutes and 30 seconds, but seeing as he was so nice to me, and the clock does not work any other way, he can have 10 minutes.

STUART NASH (Labour—Napier): Actually, Mr Assistant Speaker, I would rather you give me 5 minutes. This is a subject that is not nearly as inspirational or as aspirational as the last one—in fact, there is no doubt about that. I remember when I got up to speak on this one. I was watching the second hand tick, and I am sure it got to 12 when I had to jump up, and I got 20 seconds. I got 20 seconds.

What I was talking about was that this bill came out of a series of systems failures that allowed Phillip John Smith, who is one of the more despicable people in our jails—he is a paedophile, and then, when he went back to abuse the kid again, this kid’s father tried to shield him, and Smith murdered this guy’s father. Like I said, he is one of the more despicable men I have ever read about in our country. But he managed to get away. Luckily for us, he is as thick as two short planks. The reason I say that is he actually got across to South America, but then they caught him pretty quickly and they sent him back here. It is good that they did catch him, and it is good that they did send him back here. However, a little wee part of me wishes he had just spent a couple of years in a South American jail. But, anyway, that is a story for another day.

This bill is about a whole lot of recommendations that came out of the report that was written based on Phillip John Smith’s escape. It is a shame, I must admit, that it took an incident like that to provide the impetus for us to do this, because there were obvious system flaws before Phillip John Smith escaped, or else he would not have been able to escape. But often it is the way with this Government that it is very reactive. If a situation happens, then it says “Goodness me, this has captured the public imagination.”, it does a poll, and it realises it needs to do something about it. But here we are. This bill is going to make the system a better one, of that there is no doubt.

The report that was written about Phillip John Smith’s escape did detail a series of failures in the handling of the incident by Corrections, by Justice, by Customs, and by Internal Affairs. Because a man escaped, it was not just the fault of Customs. You have got to remember that this guy ended up getting a passport, for goodness’ sake—obviously, with a photo with a whole lot of hair, because he wears a wig—but Corrections, it was noted, had strong inadequacies in the way it administered temporary releases. I can imagine, actually, that when Phillip John Smith ended up back in prison, there were some other prisoners who were not terribly happy, because Corrections actually changed the rules and that meant that—what is the technical term for shore leave or leave outside the wire? You know what I am trying to say.

Mahesh Bindra: Release to Work.

STUART NASH: Release to Work. Yes, those schemes—Corrections put a ban on those immediately and then it tightened up on those. Release to Work schemes are a good idea, I must admit. We need to end up with a way that better reintegrates people back into the community.

One thing I am very, very critical of is our—well, not just Corrections, but our whole society is. In 2005, the Corrections budget was around about $526 million. This was its operational budget. It is now close to $1.4 billion, so after 12 years we are now spending about $900 million more a year keeping people locked up. There has at some point been some sort of systemic failure, and I do think we lock too many people up. But that is beside the point. What we do need to ensure is—our jails of course have to be places of incarceration but they also need to be places of rehabilitation. The evidence points to the fact that it is actually not happening in a way that is allowing prisoners to get out and at least have a chance of being productive.

I remember when we had the CEO of Corrections at our Law and Order Committee. He told us that, actually, 62 percent of prisoners who walk through the prison door every single year have an existing mental health and/or addiction issue, and there are 14,000 Kiwis who are in jail for 6 months or longer, every year. That is about 8,500 people in prison for 6 months or longer who have a mental health and/or addiction issue. I said to the CEO: “So have you at least got the plans and the processes in place so that when these people get out of jail, they have at least got a chance of being productive members of society?”. Do you know what he said—and I would not have believed it. I have got the transcript. He said: “I don’t think we’re that ambitious.” “I don’t think we’re that ambitious”—that is an admission that what we are doing in this country is locking up people and throwing away the key. When we find the key 6 months, 12 months, or 18 months later, we are letting them go and they are a little bit badder and they are a little bit sadder and we wonder why, in 6 months’ time, we see them back in jail. In fact, we have one of the highest recidivism rates in the OECD, and it is something that we have got to change.

It is not necessarily Corrections’ fault. It is not the one that is locking people up for longer and longer, but it is the one responsible for administering that. What I would really like to see is us getting back to a different way of administering justice. What has happened is we have become a much more punitive society, as opposed to the compassionate society that we once were. We are now saying that the solution is to lock ’em up, as opposed to saying that the solution is to find what will work or to understand the issues of why people are ending up in the criminal justice system. Compassion versus punitive—I think we need to go back to compassion. When you think, would you believe, that it costs us $100,000 a year to keep one man in jail, I just wonder whether we would not be better spending that money elsewhere in solutions as opposed to locking people up. But back to the bill. [Interruption] Thank you, Mr Assistant Speaker, for allowing me to stand on my soapbox for 5 minutes about Corrections.

Police did also note in the report they wrote about the Phillip John Smith incident that they did not have access to basic information such as births, deaths, and marriages records, which would assist them in building essential profiles around offenders. The reason I say that is that members will have noticed that sometimes when someone is arrested or the police are looking for someone, they will say: “John Jones, sometimes known as Bob Brown, or sometimes known as Jim Smith.” The prosecution works in that the name that the prisoner, or the person being prosecuted or arrested, carries at that point in time is the name that goes forward into the system. So if the name that the person is being arrested under or prosecuted under is Jim Jones, but he was born with the name of John Smith, then that information is not captured, and I think this is what Phillip John Smith used to get his passport.

In this day and age, in the 21st century of big data and these massive databases when IRD is spending $1.3 billion and every other man and his dog, or every other ministry, is spending literally millions and millions, what we do expect, I think, and what the voters certainly expect and what New Zealanders expect, is that we put the systems in place that allow our databases to at least talk to each other in a meaningful way that is going to keep our communities safe. The reason I mention that is that Phillip John Smith went over to, I think Argentina. He went overseas. OK, what would have happened if he had actually gone to Hawke’s Bay or New Plymouth or somewhere else and continued in his nefarious ways, or if he had decided to go for the guys who put him in jail? He did murder the father of the son he had abused. What if he had gone and sought revenge? In a way, we were lucky he did not do that. In a way, we were lucky he did head overseas. All I am saying is that what the scam did was it exposed a whole lot of flaws, which this bill will actually remedy, I am sure.

There were 30 recommendations that were made by the inquiry. The Minister of Justice, Amy Adams, had at the time of the report’s release agreed to 34—sorry, did I say 30? There were 39 recommendations; she agreed to 34 of them. What I would say is that the Minister was actually very serious. She took on board a lot of the recommendations because she understood the fact that this is important, as do we. It is why we are supporting the bill.

My good colleague Kelvin Davis, at the time of the report’s release, said that it painted a pretty farcical scenario of how a complete lack of information across Government agencies allowed Smith to apply for and receive a passport in a name he had not used since he was a child. Kelvin also noted that it highlighted deficiencies in identity information. Kelvin just went on—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

STUART NASH: —in the very competent way that he did, to say that things needed to change.

It is why we are supporting this bill. It will be good to see it go through, because the last thing we want is another Phillip John Smith in our communities. Like I said, we are lucky that he was as thick as two short planks and that we caught him pretty quickly and got him back in jail, and may he be there for the rest of his life, but may that also be the last time someone uses such a scam to escape. On that note, I will just say that we do support this bill. Thank you very much.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe e Te Māngai o Te Whare. Yes, I really want to speak on the Enhancing Identity Verification and Border Processes Legislation Bill. In the first reading, I posed a question about whether or not the magnitude of the response matches and is appropriate for the size of the issue, and I will come back to that later on. But I do want to make a couple of points about what led up to the situation of needing a response to this issue.

As my colleague Stuart Nash has pointed out, there was a certain person who decided he was going to go split the country and go off to South America. It occurred to me that if just one of the key agencies had made a phone call—if the Ministry of Justice had made a phone call or if the Department of Corrections or if the Department of Internal Affairs or if the Customs Service had made a phone call—or if someone had called the nominated sponsor, then this situation may not have happened. Seriously, there has been a communication breakdown in this issue, and then we find ourselves here today in the process of passing new legislation to deal with that situation. I think that that is not the best way for us to be developing new legislation.

The seriousness of the lack of communication between all of these Government agencies needs to be dealt with. But, as I posed in my first reading speech, is the magnitude of the response appropriate for the size of the issue? We are supporting this legislation. In my opinion, to answer my own question, it is something that will need to be reviewed over time to decide whether or not it goes too far. I think it is not a situation where it does not go far enough; I think it fixes up a whole lot of things.

Submitters made submissions on this bill, and some of them were lengthy and substantial. I am not on the Law and Order Committee, but I have read through a few of those submissions. The Law Society submission was really thorough and helpful for me to understand what this bill is about. I see in the select committee’s report that it has addressed all of those issues, not in the way that the Law Society actually wanted, but, as I say, I do not think we are going to know the full impact of this legislation until it has been around for a few years and has been able to be used and until that biometric information has been shared between the different agencies like Corrections, Justice, Customs, and the Department of Internal Affairs.

It is actually quite staggering that the Department of Internal Affairs’ births, deaths, and marriages information was not able to be shared with Corrections, so it had no other way of being formally advised that this person had another identity. Actually, I am standing here just about to say that it is amazing that this has not happened before, but do we actually know that? We possibly do not know that there are not perhaps others who have got away with it. As my colleague Stuart Nash pointed out, the person in question was not that bright, and that is why he got caught.

However, we are in the situation where we have had the inquiry. The inquiry has made 39 recommendations, and 34 or 35 of those recommendations have been picked up. What I did notice from the submissions I read was that people were most concerned about the sharing of data between the agencies. If I can just refer to one of them, by the name of Aaron Livingston, he put forward his submission because of his concerns about, and the potential for, as he saw it—I am not saying this is going to happen—mass surveillance. He had huge issues around privacy of information. I think it is really important that these submissions, even if the select committee did not agree with what he was saying, are actually valid arguments that the Parliament should note. It is my view that it is important that all voices on this issue are heard.

As I said, for me it is quite finely balanced around supporting this bill in the way that we are. I remember reading that even some of the basic information that is available to each individual department, ministry, or agency—there seemed to be no sharing of that information between all of them. I think that is something that really did need to be addressed.

To the bill—it clearly inserts a definition of what biometric information is into six Acts where that did not exist. So under this bill that definition will be in all six of those Acts. It amends the Privacy Act. I think that is where the major concerns were for those submitters who made their views known to the select committee. The bill amends the Parole Act, the Mental Health (Compulsory Assessment and Treatment) Act, and the Customs and Excise Act.

The part that drew, I think, the most attention was the new Part 10A, going into the Privacy Act, which actually is the key Act that authorises agencies to access the use of identity information, which includes the biometric information that I talked about. They can use that information that is held by other agencies primarily to verify the identity of an individual. Those individuals are set out in a new schedule within this legislation. As I said, I think the jury is out on how effective this will be. I think it will be effective, but does it go beyond the issue? Only time will tell. Thank you.

MAUREEN PUGH (National): I stand today in support of the Enhancing Identity Verification and Border Processes Legislation Bill in its second reading. This bill is in the name of the Hon Amy Adams and is a result of the Government inquiry into the matters concerning the escape of Phillip John Smith, or Traynor, who managed to acquire a passport, leave New Zealand, and end up in Brazil while on temporary release from prison. The inquiry found that it was the inadequate sharing of information between various agencies that enabled this escape to take place, as well as some operational processes that were also inadequate.

This legislative change is supporting the improvements that have already been made to some of those operational processes. In particular, Corrections has implemented 13 of the recommendations after it conducted an urgent review around this issue, such as making temporary release of prisoners a much more rigorous process.

This is an omnibus bill, as we have heard today. It amends and strengthens requirements that must be satisfied before Ministers can make Orders in Council. The amended Acts are the Victims’ Rights Act of 2002, the Sentencing Act of 2002, the Parole Act of 2002, and the Corrections Act of 2004, as well as the Human Rights Act and the Privacy Act.

This bill will streamline how various agencies must work together to identify offenders, and it will ensure that their sentences are carried out properly. It also clarifies the ability for Customs to collect and use biometric information about people arriving into or departing from New Zealand. The bill moves away from the simple, name-based information that agencies currently hold in their records to a shared identity based on information that cannot be altered, such as a person’s fingerprints or facial recognition technology. This is what is known as biometric information.

The public does expect their Government to be able to share information for the purposes of keeping communities safe and to prevent harm and also prevent the type of escape from justice that initiated this bill. This bill does contribute to the Government’s priority of delivering better public services by reducing crime and reoffending, and as such I have pleasure in commending this bill to the House.

DAVID CLENDON (Green): I am pleased to take a somewhat contrary view to the rest of the speakers we have heard on this bill. The Greens are not supporting this legislation. We see it as addressing the wrong problem, in a sense. There may certainly be an issue around information sharing. We think, however, this bill goes too far. The peculiarity of this legislation is that in the introduction to the commentary we are told that the bill responds to perceived weaknesses in legislation regarding offender and patient management that were identified in the Government inquiry, entitled matters concerning the escape of Phillip John Smith/Traynor. The peculiarity is that had all the provisions proposed in this bill been enacted, been in legislation, at the time that Mr Smith/Traynor took his brief excursion to South America, nothing would have changed. There is nothing in this bill, actually, that would have prevented him from doing exactly what he did, and that is very strange in its own right.

The inquiry actually identified a whole raft of issues and failures that enabled Mr Smith to escape and make his journey to Brazil. The main findings are set out—what are referred to as principal causes and deficiencies that failed to prevent his escape. The inquiry likened it to links in a chain. Had one of those links not been present, had one of those failures not occurred, then Mr Smith would not have got away and we probably would not be having this conversation.

Firstly—and these are identified as the links, the deficiencies, that contributed to his ability to escape—Corrections did not adequately assess or mitigate Mr Smith’s risk. The surveillance and monitoring of Mr Smith’s activities was inadequate. The inquiry went on to say “Mr Smith should have been subject to higher levels of vigilance by custodial staff, intelligence staff, staff members generally”, and said that experienced officers expressed strong misgivings about Mr Smith that were not always shared or assessed, or were not influential.

Mr Nash referred to Mr Smith as being “as thick as two short planks”. I love the phrase, personally, and I am not here to defend in any way Mr Smith’s character or actions. But, in fact, he displayed a considerable cunning or, dare I say it, even intelligence, in being able to manipulate access to a passport and to get out of the country. His undoubted cunning/intelligence was proven by the fact that he illegally but successfully ran a couple of businesses and generated a healthy amount of money for himself while still in custody. So while he certainly proved to be foolish by putting himself in a public forum after his escape, he did demonstrate a level of cleverness, at least, or cunning.

I think that the fairly bald statement that the inquiry revealed issues around information sharing is not untrue, but it overemphasises the importance of those problems. Had Mr Smith, or Traynor, been correctly identified, then he would never have been able to get a passport. If we had had legislation in place that said serving prisoners may not get passports, that would have stopped him, presumably—except, of course, for the historic glitch that meant there were no links anywhere in anybody’s database linking Phillip Smith with the name of Traynor. So the response, which has been a significant increase in the ability, the potential capacity, for various Government agencies to share information, is we think a significant overreaction in terms of the likelihood that that sharing or lack of ability to share information was, in fact, the problem that enabled this fellow to get away.

We already have—as was pointed out by, I think, the Law Society—mechanisms to enable agencies to share information, and they are called AISAs, or approved information sharing agreements. We had a fairly robust submission—several of them, in fact—that suggested that those agreements could be used to allow for not only bilateral but multilateral arrangements for information sharing between various agencies. An argument would need to be made that it was necessary. The agreements could be constructed in such a way that the need is demonstrated and that we keep fairly tight reins on the ability of these agencies to share information.

It is always a fraught sort of an area, the question of information sharing between Government agencies, because on a practical, day-to-day basis you can see it is sensible and necessary. Police, courts, and agencies involved with managing domestic violence—you can see very quickly that if the barriers to information sharing are too impermeable or too excessive, then we are not going to get good outcomes for some vulnerable people in our communities. But we have to be very thoughtful about exactly how far those agreements go, and I think that this bill has overreacted. I think part of the reason why this bill has become a sort of a catch-all, almost an omnibus—it is not a universal freeing up of agencies to share information, but it has gone a long way down that road.

I think it is not as good a bill as it could have been, and we can get some evidence for that from the regulatory impact statement (RIS), which was probably one of the most straightforward and frank pieces of advice I have seen from Justice officials. They said very clearly that the main constraint they have faced in their regulatory impact analysis was time. The message is very clearly stated in the RIS that Justice officials did not have time to do a decent job. It says: “The Government has committed to introducing legislation as quickly as possible to improve the ability of agencies to verify identities.”—compounded by, say,—“the Government’s decision to not implement recommendations by the inquiry and to consider the full range of tools to enable better information sharing.”

It is a bit like the old expression “Marry in haste, repent at leisure”. I think the same can be said about making legislation about forming statutes. If you do it quickly under the haste that is generated by the public spotlight—the public concern, and rightful concern, that this very dangerous person was able to leave the country—reacting to that sort of public pressure does not make for good legislation. I think this bill is an example of that.

The point was made earlier, again in terms of this general theme of overreaction, that temporary release had been, and is and could be again, a very successful mechanism for making the transition from prison to society. The inquiry actually made the point that—here we are—“In the 10-year period ending in 2014 the reported number of breaches of temporary release conditions by prisoners was extremely small, even minuscule.” “Minuscule” was the word it used in terms of the number of incidents of people abusing or failing to comply with conditions of temporary release. Yet when this one guy, a very smart person though not an admirable person in any way, managed to manipulate himself a passport and get out because Corrections, frankly, was not doing its job of monitoring him—it did not confirm the sponsor, and it did not do a large number of things. The fact that this fellow was able to get away—one serious breach—immediately led to a blanket halt on temporary release.

This disadvantaged not only prisoners but some employers, who were actually giving those prisoners jobs and who were extremely upset that the inmates turned up to work one day and the next day they did not arrive because they were not released from prison. It undermined employers’ confidence in the ability of Corrections to reliably supply them with people who are going to do some useful work and learn some skills. Again, there is that whole sense of overreaction. I think even now, several years later, the incidence of temporary release is at something like only 80 percent of what it was before this one escape, which as I say, the inquiry described as minuscule.

So, all in all, the Greens think that this legislation goes too far in enabling information sharing. It is a difficult area, as I have said. I concede that we certainly do not want to allow people to be disadvantaged, we do not want to allow people to be victimised, and we do not want to inhibit the provision of necessary social services to individuals who are in need of them by absence or lapse in the ability of agencies to share information. But legislation done in haste and under the glare of public pressure is seldom good legislation, and I fear that this bill has fallen into that. Thank you.

MAHESH BINDRA (NZ First): I rise on behalf of New Zealand First to speak to the Enhancing Identity Verification and Border Processes Legislation Bill. At this stage I would like to acknowledge the work done thus far by the members of the Law and Order Committee, the staff who are allocated to us to assist us, and the advisers who advised us very efficiently on legislation that to me appears to be not foolproof but very close to becoming very efficient legislation.

This bill was prompted by the findings of an inquiry into Phillip John Smith’s escape on 6 November 2014 while on a 74-hour temporary release from Spring Hill prison. The inquiry actually found out that there were various issues with regard to the processes that were followed to assess that prisoner’s suitability for a 74-hour temporary release. This escape was followed by a number of knee-jerk reactions, and one of those was in respect of prisoners who went out to work in industries on the Release to Work programme, which has got nothing to do with the temporary release that Phillip John Smith was entitled to. It had nothing to do with Phillip John Smith. However, those prisoners who were otherwise entitled to leave to prison to go out and work—and a continual outing like that would have helped them in getting rehabilitated into mainstream society—were adversely affected by this escape, and they were not very happy when the prisoner was ultimately recaptured and brought back to New Zealand.

This single incident caused us huge, unprecedented embarrassment internationally, and it opened our border control agencies and our law enforcement machinery to ridicule and criticism nationally and internationally. I quote a sentence from the inquiry report: “Mr Smith passed unimpeded through immigration and security checks at Auckland International Airport.” The so-called SmartGates at Auckland Airport were proven not be all that smart. Smith passed through all those SmartGates and manual controls unimpeded and unstopped. This escape was entirely preventable, but the relevant agencies were smug in the knowledge that nothing could go wrong. This is the sort of complacency that the prisoner actually used and manipulated.

The report is very comprehensive and detailed. It bares the glaring holes in the manner law enforcement agencies and border control agencies work with each other. We had submitted a Supplementary Order Paper (SOP) when the Drug and Alcohol Testing of Community-based Offenders, Bailees, and Other Persons Legislation Bill was being debated in this House. The intent of that SOP was to make it mandatory for the Department of Corrections and the police to communicate with each other while formulating regulations for their specific purposes. But, unfortunately, that SOP was voted down by the National members because the then Minister of Corrections was convinced that the departments did actually communicate with each other and that there was no need to make it mandatory for those departments to communicate with each other more effectively.

We asked the question then, and we ask it again: where was the communication and the information-sharing regime when Phillip John Smith escaped, all the way to Brazil? After the escape, Corrections conducted its own review into the debacle. The chief custodial officer made some pretty alarming observations, and I quote him: “There was conflicting information pertaining to the risks prisoner Smith posed”. This is Corrections auditing Corrections.

Let us look at what the inquiry committee’s recommendations are, and there are quite a few. Almost all of these recommendations point out that the lack of communication amongst the agencies needs to be fixed. First and foremost, this bill, to some extent, aims at achieving that. This bill aims to ensure a better flow of information sharing amongst various law enforcement and border control agencies, and that need has arisen out of a bizarre escape—that is, of that convicted murderer and sex offender, Phillip John Smith. Although a bit of a knee-jerk reaction, this bill, hopefully, will prevent similar escapes in future.

During the select committee process a number of submissions were made and concerns were raised. The Privacy Commissioner had a few concerns to raise, and he had a few recommendations to make. While I am not going to go through the recommendations in detail, I can say that the committee considered all aspects of those submissions to arrive at what I consider to be quality legislation.

What makes this legislation stronger is the fact that personal information, including biometric information, will be collected and shared by agencies for the purposes of preventing, detecting, investigating, and prosecuting offences. It will also enable better management of offenders, including those special care recipients, special patients, and restricted patients. This bill will help strengthen our border controls to ensure that these categories of individuals are not allowed to leave New Zealand without authorisation. After the passing of this bill, we believe that there will be better sharing of information amongst the law enforcement agencies and our border control agencies. Agencies will gain the ability to store and share information of offenders on bail and on temporary release, and, of course, of those incarcerated.

During the course of this bill being deliberated on at the select committee, there were some doubts and apprehensions raised, and the intent was to ensure that the bill did not in any way, shape, or form affect the New Zealand Bill of Rights Act or citizens’ right to privacy. One of the questions that I sought clarification about was the length of the period that the information, which includes biometric information, will be stored and shared by the agencies. The response to that query of mine was that the agencies will hold the information for the period of an offender’s sentence. That, I think, is a fair approach towards it.

The other issue was the security of that information. We have seen personal information being shared inadvertently by a Government agency, causing serious embarrassment to both the victims and that Government agency. We cannot have a repeat of that situation, and that is why we think that we must get this right every time.

We have contributed in the select committee by way of our own submissions, and we have supported this bill at its first reading. New Zealand First will continue to support this bill. Thank you.

JONATHAN YOUNG (National—New Plymouth): I want to take just a brief call to support this bill, and I just want to thank the member opposite, Mahesh Bindra, for his party’s support of it. We know that the Government inquiry into matters concerning the escape of Phillip John Smith was the basis of this bill. One of the previous speakers from the Green Party quoted some comments to say that the risk of this happening was minuscule and he stated that this bill is an overreach. I think that when a convicted paedophile who, as the member Stuart Nash mentioned, goes on to murder the child’s father and then escape New Zealand, it should not be described as a minuscule concern. When somebody like that, with that level of depravity but also ingenuity, escapes the Corrections regime, it must be a matter of great concern.

The Government instituted an inquiry, that presented 39 different recommendations, the vast majority of which were fully adopted, and then Corrections, before any further bill was presented to address some of the concerns of that inquiry, adopted 13 of those recommendations to bring change. I think the people of New Zealand, the taxpayers of New Zealand, and the communities of New Zealand, require this sort of response. It is not an overreach. It is like when you have a net and you cast it out and you gather in fish—if there is one hole in that net, it loses the catch. It is up to us who legislate here in this House to ensure that we have a net that does not let that fish out, as Phillip John Smith was able to escape.

Immigration New Zealand already has biometric information - sharing agreements with nations of the world, and that is important because we want to stop identity fraud, which is, essentially, what happened in this case. It is important that information sharing amongst agencies within this country, within our Government and regulatory regime, are able to share information to ensure that when people are placed in prison because of acts that they do, they are held to account not only for the protection of the population but also for the process of rehabilitation as well. That is very important. And, as we know, there were multiple identities taking place—yes, a very clever person. This House must be smarter than the smartest of criminals if we are going to have a regime that protects the people of New Zealand.

So this bill is an appropriate response to those concerns that were highlighted. It is not an overreach; it is an appropriate response. I commend this bill, and I commend Minister Amy Adams for bringing it to the House. I trust that we will progress it. Thank you for the support of those parties across this House that are supporting it. I commend it to the House. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Marama Davidson—5 minutes.

MARAMA DAVIDSON (Green): The Green Party is opposing the Enhancing Identity Verification and Border Processes Legislation Bill. We are very clear that the problem of Mr Smith escaping could be addressed by the existing legislative provisions and that, actually, it is a matter of applying what we already have and practising things better.

I just quickly want to respond to the previous Government speaker, Jonathan Young, who said that we have a responsibility in this House to respond. We have a responsibility in this House to remain calm, thoughtful, and considered, especially when applying measures that could be seen as quite intrusive. I just wanted to quickly pick up on that particular point. This bill tries to respond to what its commentary says are legislative weaknesses. I have just said that the Greens are very clear that it is a process application and practice matter instead—those so-called legislative weaknesses identified in the escape of prisoner Phillip Smith in 2014. The explanatory note says that the bill is seeking to make information about restricted patients and offenders easier for a number of agencies to collect and share.

We are opposing the bill. There is a rightful and serious and valid concern from the public about safety. That is not a minuscule concern, which is even more reason why we should have a considered and thoughtful response that actually gets to the heart and the true causes of the failure. So I have to stand here and be quite honest in this House and wonder how much of this legislative response is actually a political one to try to mask over the truer failures of what happened in the case of Mr Phillip John Smith. This is not at all me commenting and being critical and harsh on particular departments, but it is just asking whether we can be honest and actually address the true reasons why Mr Smith was able to escape in the way that he did.

I do want to say that I disagree with my colleague Mr Nash, who said that it is our role to comment on the character of New Zealand citizens whose names are brought into this House, particularly with remarks such as “thick as a brick”. I do not think that is our role, and I do not think it is becoming. I think we need to stick to the issue: there were application failures. Even the Government Inquiry into Matters Concerning the Escape of Phillip John Smith/Traynor amassed that there were “numerous failings of process, notably within Corrections, that contributed to the escape long before he got near the border.”

If we are going to be intrusive in the way that this bill is proposing to cast such a wide net, then we do need to be considered. Particularly with regard to new Part 10A, in clause 6, we saw that the Law Society itself said: “No clear policy rationale supports the introduction of proposed Part 10A. The Government Inquiry … did not identify any barriers in the Act that prevented information sharing.” Part 10A is in regard to information sharing. The Law Society continued to say that “rather the inquiry noted that the cultures of the relevant agencies primarily explain why information was not shared.” Even other members have attested to that very fact—that we could have done better by picking up a phone.

I am also going to include that in the throwing of a wide net to collect biometric data, we must absolutely consider that Māori are always more likely to be impacted on by any surveillance legislation, particularly because we are overrepresented. Māori are prosecuted, convicted, and apprehended at a higher rate than anyone else for the same things. Even the Waitangi Tribunal found that there were Treaty breaches in the way the Department of Corrections is failing to work with Māori. So we in here must be aware that the casting of this wide net is going to impact disproportionately on those who are overrepresented in apprehension, conviction, and imprisonment rates.

We will continue to oppose this bill for the reasons that I have outlined. Thank you.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe e Te Māngai o Te Whare. I stand in support of the Enhancing Identity Verification and Border Processes Legislation Bill, and I want to touch on the point made by the member Mr Jonathan Young. I think he made a very good point. The particular crime, the devious nature, and, of course, the premeditation exhibited by the particular person who caused the review into this process is despicable. It was a crime that the whole country, I am sure, could not believe took place. To see that somebody could flout the system in the way they did and end up, for all we know, on a beach somewhere overseas, drinking margaritas—we do not know that. But the point is this: that person got away with a crime and fled this country, and we should all be concerned about that, because if we consider our entire process as a chain, it is only as strong as its weakest link.

When I look at this bill and I have read through some of the submissions, I think that a lot of these things are not overstepping the mark. I actually think that they are needed. The only thing I am sorry about is that it took an incident, or a devious crime like the one perpetrated, for this to actually happen.

Biometric data is not the future; biometric data is the now. Biometric data is the now. Most places around the world—or, certainly, in the Western countries around the world you go to—collect biometric data, so it is only a reasonable step to think that in New Zealand we would be doing the same. We would be doing the same.

I know that there were concerns expressed during the submissions to the Law and Order Committee about the privacy of information with regard to the information sharing across multiple agencies. With the warnings given in the submissions, I think the consideration is fair, because I do believe that in order for us to have a strong system—I talked about the weakest link. We must have strong links right across—we must have strong links right across. So any opportunity where organisations or departments or agencies can come together to share the information on a pre-arranged agreement—one that protects the rights of the individuals and that has due respect for all of the legislation involved—I think is a good thing. It is one that allows them to share information.

It is not a new thing. In fact, I know that many of the social welfare agencies do it. I know that a lot of the education agencies do it. In fact, I recall that when this particular bill came to the select committee, the then Minister of Corrections was engaged in conversations with corrections departments over in Australia around information sharing. I think that is a good thing, to make sure that the system is robust—the system is robust. Granted, there were submissions against it, warning against the overstepping of the mark. But, having accepted that information sharing will only make the system better, I think it is a good thing moving forward.

Revictimisation is always the concern. When criminals are able to get themselves into a position to revictimise those victims of crime, that is of real concern to all people in Aotearoa New Zealand. So, in order for that to stop, I think a piece of legislation like this is called for—one that will see a more robust system moving forward. My colleagues across the House have already mentioned that most of the recommendations were picked up by this Minister, and I think we have got legislation that, certainly, I know the Labour Party will be supporting.

Sure, I also take the point of my colleague Mr Adrian Rurawhe that only time will tell, as we are able to assess and monitor the proposed system when it is in place and we are able to get a trend or at least get some data that will support whether or not this particular legislation is good. I think it is. I think it is moving us in the right direction. It is sad that it took a crime and then a report in order for us to strengthen this particular part of the legislation. We support this particular bill in the House, and we look forward to it moving forward.

IAN McKELVIE (National—Rangitīkei): I will take a brief call on the second reading of this bill with a very long name. It is amazing how often legislation comes to this House that is caused by the action of a single person or of one or two people, and this piece of legislation—and I listened to David Clendon speaking earlier about the complexities of it. For a very simple issue it is actually quite a complex issue, and it is quite complex when you start to follow the process that the law takes to get to the point of designing this new piece of legislation. So it was very complicated to understand some of the connections between the various departments and the various pieces of the legislation that made it up in the end.

I certainly have a great deal of pleasure in supporting it because I think it is hugely important for New Zealand. If you think about us letting our crims hop out of prison or wherever and leave the country—that really is damaging to our international reputation. We do not want our international reputation damaged by one or two people who get away with things they should not get away with. Of course, the reasons for this bill have been well documented by many others in the House already, so I am not going to talk about that at length, but I do think international reputation is a pretty important thing to understand that we need to protect, and this piece of legislation goes a little way towards doing that. There is no simple way, from what I have seen in my time in this House, of fixing any problem and so—again, to go back to David Clendon—there was never going to be an easy way of fixing this challenge for this Government. I think that this bill is as good a solution as we were ever going to get to that.

One of the things that I found quite interesting was that those people who are being managed by a probation officer could come and go as they wished. It seems extraordinary to me that people who are serving community sentences for one sort of crime or another could hop up and leave the country without having to get permission from their probation officer. That little loophole has been tied up now, and they have got to get written permission if they wish to leave the country. I am not sure which country would want to have them, but that sort of thing has been tidied up.

Lastly, I just want to go very briefly into the issue of biometric data, because, frankly, wherever we go in the world, if we do not give away voluntarily our biometric data it is nicked off us by something in the sky anyway. So I do not think that there is any threat to privacy around that sort of thing, because that is just the way the world operates now. Whether we like it or not, we are not going to change it. So we are driven by the actions of almost every other country in the world, which, as we go through their borders, collect all this stuff on us, whether we like it or not. So I think it is just part of the way we need to behave nowadays. I think it is also hugely important that our departments—particularly in this instance, where they are dealing with people who have a criminal conviction of one sort or another—have the ability to share that information so that we do not get a repeat of what happened in the case of Phillip Smith.

I have got a great deal of confidence this bill will make a difference; I also have pleasure in commending it to the House. I look forward to it going through the Committee stage and its final reading. Thank you.

KELVIN DAVIS (Labour—Te Tai Tokerau): Let us just revisit the genesis of this bill. As the member who just sat down, Ian McKelvie, said, it is the bill with a very long name. Phillip Traynor Smith, or, Phillip John Traynor—oh, bro, he had all these aliases, anyway. He was released from prison over a weekend. He was going to be out of the prison for some 72 hours. Within 8 hours of his release from prison he was on a plane to Chile. I guess that plane flight would have taken some 12 or 13 or 14 hours. He would have landed in Chile. He then caught another plane, I assume, and got to Brazil.

His downfall, I believe, was his ego. He could not resist, when he was in Brazil, actually emailing back to New Zealand—I think it was to his lawyer—and his lawyer went to the media, and so people knew he was in Brazil. If he had not done that, then there would have been nobody in Brazil keeping an eye out. It just so happened that some fellow backpacker in some hostel somewhere, whose attention would have been raised by the news story of this New Zealander absconding to Brazil, actually happened to see him there and alerted the authorities. So if his ego had not got the best of him, he could well be hiking the Inca Trail right now or be in Copacabana enjoying a cocktail and the sights of Brazil, or a steak in Buenos Aires. Anything could have happened. Fortunately, he was picked up and returned to New Zealand, but we have to look at why he was able to do this in the first place.

I disagree with Jonathan Young, who said that this is a case of identity fraud. It was not identity fraud, because he actually got a passport under his own name. It was a name he had not used since he was a child. His journey through the justice system was under an alias—another name that he used. The actual obtaining of a passport was actually done, I believe, legitimately, under a name that he had not used for some years.

Where the system let everyone down was that there was not this information sharing that we have been talking about. There was no information sharing between the Department of Internal Affairs and Corrections, there was no information sharing between Corrections and Customs, there was no information sharing across a number of Government agencies, and that is one of the areas where the whole system broke down and allowed Phillip Traynor—whatever his name is—Phillip John Traynor to abscond.

Having said that, we just need to read a report from the New Zealand Herald, which said: “The escape could have been thwarted before it even began if Corrections had simply checked with Smith’s nominated sponsor that the prisoner was expected to stay with him overnight.” Corrections has a lot to answer for in this whole episode. “ ‘The sponsor in fact knew nothing of the release, and would certainly have said so if asked’ … There were shortcomings in various agencies systems and processes as well as simple failings that acted as ‘links in a chain’ in their failure to prevent Smith’s escape”—that is very true. There were a number of systemic failures, all links in the chain, and if any one of them had been addressed or looked at previously, then Phillip Smith would not have actually been able to do what he did.

Even when it became obvious that the guy had absconded, Corrections was pretty slow in doing what it needed to do. It should have alerted Interpol a lot more quickly; it did not. The police were not alerted until the day after Corrections realised that he was not back in prison where he should have been. So it was a systemic failure, and this bill is seeking to address some of those failures.

I do, though, take issue with our colleagues from the Green Party. I do not believe this is overreach, for the very reasons that members have said. The crimes that Phillip Smith committed—i.e., child abuse, sexual abuse, child sexual abuse, and the murder of his victims’ father—are serious crimes, and what he did was expose a loophole in the system. It is only appropriate that Parliament moves to close that loophole so that other people cannot do what he did. There were poor checks and balances from Corrections and there were systemic breakdowns from a number of Government agencies, all of which led to him heading off overseas.

As Peeni Henare said, the collection of biometric information is not something in the future; it is happening right here and now. Biometric information includes the taking of photos. Well, you know, photographs have been around for a hundred and something years. The taking of fingerprints was one of the first detective tools. It was a great leap in the 1800s, but it is not terribly innovative these days. Iris scans—OK, that is something different, but I think I saw a movie about 15 years ago where somebody had their iris scanned to get into some nuclear plant or whatever. What is the difference between taking an iris scan and, say, a doctor taking a mole map of your back? It is all just taking, basically, scans of photos. It is nothing actually, particularly new or innovative. The taking of measurements, I assume height and palm-prints, maybe—there is nothing really overreaching when we talk about the taking of biometric information.

I do agree with Marama Davidson, though—her comment that Māori are overrepresented in the justice system. I agree with that. I do not think, though, that taking biometric information from Māori is really that much of an issue. Fingerprints and iris scans and your height—that is nothing. I do not think there is anything racist in that. It applies to everybody equally. So biometric data is in the here and now.

In terms of some parts of this bill, an accessing agency—so, an accessing agency is an agency that takes the identity information—the Minister must be satisfied that the biometric information is being taken for the purpose that it is needed for, and the purpose must relate to the role of that particular agency. So we are not talking about wholesale gathering of illicit information on people here. It is just common-sense stuff to keep New Zealanders safe.

The information to be accessed is to be no more than is necessary to fulfil the purpose that the agency needs it for. Reasonable force may be used to compel somebody to give the information—that is a bit vague. What is the definition of “reasonable force”? I would like to think, in this instance, that reasonable force for the big, burly tattooed bloke is not going to be that much greater than is taken for a skinny, weedy guy like my colleague Stuart Nash here.

Hon Members: Or Todd Barclay.

KELVIN DAVIS: Ha! Something that we need to mindful of, though, is that if any information is collected from somebody who in the future is acquitted of anything they are accused of, there are checks and balances to make sure that that information is destroyed, so if that person is totally innocent it cannot be used against them later on.

Just with that, I do not think this is an overreach; I think this is plugging up a loophole that was created. We should probably be grateful to Phillip John Traynor/Smith—however many other names he goes under—for highlighting this and showing us that there was this loophole. The loophole has been closed. I think Corrections, though, needs to take notice that it had some failings in the whole process. Thank you.

Amendments recommended by the Law and Order Committee by majority agreed to.

A party vote was called for on the question, That the Enhancing Identity Verification and Border Processes Legislation Bill be now read a second time.

Ayes 103

New Zealand National 58; New Zealand Labour 31; New Zealand First 12; ACT New Zealand 1; United Future 1.

Noes 16

Green Party 14; Māori Party 2.

Bill read a second time.

Bills

Land Transfer Bill

Third Reading

Debate resumed from 27 June.

Hon RUTH DYSON (Labour—Port Hills): When I was, unfortunately, interrupted during my earlier contribution on this third reading, I had just acknowledged the original Minister, the Hon Maurice Williamson, and I was a bit devastated to hear a number of National members say: “Who?”. The Hon Maurice Williamson is still a member in this House, and he deserves credit for the work that he did way back in 2010 in getting this bill to the situation that it is at now. I do hope that he is able to join the debate and take a call later in the proceedings. He has not got long left if he wishes to, so I would invite him to take a call as soon as he possibly can. I also want to acknowledge our former parliamentary colleague the Hon Simon Power, who also made a very valuable contribution to this bill, and is no longer a member of the House. He has gone on to greater and more glorious things.

First of all, the Law Commission work on this led to a report that was tabled in the House in 2010. It described, basically, a big, bold step to modernise what was a hopelessly outdated system, and that was our system of land transfer legislation. I do not think anybody in the House has disagreed with the fundamental point, but I want to say that at our select committee we did not give it the once-over-lightly and then pass it along.

I want to commend all the members of the Government Administration Committee, particularly Paul Foster-Bell, and also my colleague the Hon Clayton Cosgrove, who subbed in for a number of these hearings. We did find, during our committee consideration, that there were a number of issues that needed resolving, and we did, by a good process of listening and talking with each other in a respectful way, get to a much better outcome at the end. I am pleased that our committee was able to make that contribution.

We had primary concerns from the Bankers’ Association and the Law Society about matters contained in the bill. One of them caused a lot of debate, and that was the issue of mortgage fraud that was considered in clauses 54 and 55 of the original legislation. This was probably the most contentious, not in terms of party policy, but it was contentious in terms of who was right and who was wrong and how we might best deliberate to protect the people who deserve protection. The Bankers’ Association was pretty upfront with us. It said: “Those clauses aren’t necessary. You’re trying to fix a problem that doesn’t exist. It will cost a huge amount of money, and, by the way, our customers will pay.” Well, that quickly focused our attention, so we tried to determine whether there was a problem, and we agreed with the Bankers’ Association that there did not seem to be one.

Should we be protecting against a problem that could arise in the future? Well, yes, but you would not want to protect against every possible outcome of every possible situation, so we parked that. This could potentially be a problem, but in the end we decided that having banking customers paying to solve a problem that did not exist and may not exist in the future just was not worth it. Unanimously, the committee agreed that those clauses would be deleted. I think that was a very good decision, and I hope the Bankers’ Association is proud of the representation it made. It was a bit of proof that often members of Parliament, across parties, will listen to submissions, consider good contributions that are made, and then change the original premise of the legislation.

As I said right at the outset of my contribution, the original Ministers, the Hon Maurice Williamson and the Hon Simon Power, deserve commendation for their work on this bill, as does the current Minister, the Hon Mark Mitchell. He has picked it up right at the tail end and he will get all the credit, but so he should because he is the Minister responsible for it. This is an important step forward.

I do not know why it has taken 7 years for a bill that does not really arouse much contention. It is pretty dry. It is pretty technical. We did have some debate on it, but not on party political grounds. I cannot imagine why it is being passed only in July 2017, and I am sure some member of the Government—perhaps a member of the committee—will be able to make a contribution and explain it. It is work like this, which is based on Law Commission recommendations, that should be able to be taken up into the House pretty promptly.

It has taken 7 years since that Law Commission report. I know that the Government has had other matters on its mind, and this might not have seemed to be as priority, but consider the number of people who are involved in land transfer every year, consider the amount of money that is spent in that process, and consider that after this third reading our Parliament will have made that process more efficient, will have made it easier, and will have made it, probably, more transparent—and we remain ever hopeful of that. But also, with that efficiency, hopefully it will be cheaper for people. This is a good step forward for our Parliament, and I am pleased we are taking it.

MATT DOOCEY (National—Waimakariri): It is a pleasure to rise in support of the Land Transfer Bill in its third reading. I would just like to respond to the previous speaker, Ruth Dyson, and say that of course on this side of the House we know who the Hon Maurice Williamson is. Who would forget the man who was able to fill out the costume of The Greatest American Hero—and did he not look good in that, I must say.

This bill is about updating and amending the Land Transfer Act 1952. I think it demonstrates a focused Government in its third term that is relentlessly modernising systems in New Zealand. We have one of the best electronic land transfer systems in the world, and it is something that we should be proud of—in fact, something we should boast about. We are leading the way, and, in fact, that is what this bill is about. It is modernising. It is the old cliché—we are moving from the paper office to the paperless office.

I think what underpins this bill is giving New Zealanders confidence. We know that when we look at land and housing, it underpins a lot of social and economic well-being. We saw that in Canterbury post the earthquakes and the impact that had on people in terms of the devastation of their land and houses. So we want to give people confidence. We want to give them security in their property rights. We know that for a lot of people, buying a house will be one of the biggest investments they make over their life’s course.

It is right that we are updating the Land Transfer Act 1952 and bringing it into the 21st century. I do not want to get caught plagiarising, so I will quote the second speaker from Labour, Raymond Huo, who said: “An effective system for land transfer is essential for … a modern economy.” I think I will bridge to Raymond Huo, a fellow centre-right thinker. He is quite right that property rights and land transfer does underpin a modern, working economy. We should be supporting that, and, in fact, we are supporting that under this bill.

There was quite a bit of detail that the Government Administration Committee kicked about during the select committee stage. I was not on the committee at that stage but I just want to acknowledge the chair, the Hon Ruth Dyson, and also the deputy chair, Paul Foster-Bell, for their leadership.

There is a lot of technicality within this bill. I learnt a lot about the Torrens system, the law of indefeasibility, and manifest injustice, but ultimately the select committee was able to clarify the role of the court in understanding where there has been injustice and when there has ultimately been compensation, and also clarify from when the courts can get involved for actually altering a land transfer title as well.

I just want to finish by saying this is a very good bill, and I acknowledge the responsible Minister, the Hon Mark Mitchell, for all his work, and previous Ministers before him. On this side of the House we know things are a team effort, so we do work as a team. That is why I commend this bill to the House. Thank you.

EUGENIE SAGE (Green): Tēnā koe, Mr Assistant Speaker. The Green Party is pleased to support the Land Transfer Bill. As the chair of the Government Administration Committee, the Hon Ruth Dyson, has noted, it has been a long time in coming. It was back in July 2010 that the Law Commission did a very thorough report about a new Land Transfer Act, and yet it has taken all this time to actually get the legislation into the House.

That said, we are pleased to support it because it has gone through a good process in terms of the Law Commission review, and quite substantial consultation, and because it is taking legislation that is 60 years old and updating that for the modern era, particularly given the electronic basis for the land register at the present time and the fact that the current Act is quite clumsy to administer. So it has been a process of modernisation. In that process we have, of course, retained the key principles at the core of our Torrens system: the indefeasibility of title, the fact that land transactions cannot be made null and void, the fact that they cannot be set aside unless there has been some fraudulent activity in gaining the title, and the fact that it is a register of all interests in land and titles so that people can have confidence and be secure that when they are doing a land transaction they can go to the register and find all of the information there, rather than having to search in other places. It does provide that security of ownership.

There were changes made in terms of the High Court’s ability and discretion to intervene in cases of obvious injustice and the ability to provide compensation, but there is one huge hole in this legislation, and that is around the issue of overseas ownership. Denis O’Rourke, with his Supplementary Order Paper 325, proposed a significant change that would at least have had the register expanded to list transactions where there is an overseas person who ends up owning the land. That was a Supplementary Order Paper that the Green Party supported.

What we are seeing in New Zealand is a significant increase in overseas ownership of land, and we actually end up relying on a community organisation, the Campaign Against Foreign Control of Aotearoa, for the best statistics on the alienation of New Zealand land. We have had a sharp increase in the proportion of shares listed on our sharemarket being overseas owned, from 33 percent of listed shares in 2015 to 36 percent last year, and we have had a significant increase in the amount of land that is overseas owned. In 2015 the Overseas Investment Office approved overseas investors buying nearly 80,000 hectares of land, yet in 2016—last year—the Overseas Investment Office approved the acquisition of 465,863 hectares of rural land by overseas investors. The bulk of that was freehold land, but some of it—about 100,000 hectares—was leasehold land. The bulk of those transactions were where one overseas investor was selling to another. So once land has been alienated—once those high prices have been paid for farmland—it is very difficult for New Zealanders to buy it back. That 2016 figure of nearly 466,000 hectares was just 1 year of land sales, and that was 2.9 percent—

The ASSISTANT SPEAKER (Lindsay Tisch): I will just remind the member that we are on a third reading. A third reading is the result of what transpired in the report back from the Committee of the whole House. I will just refer the member to Speakers’ ruling 137/1 in particular. I will ask you to come back. To mention these other points is fine, but you must come back and not make them what your comments are, which is a substantive part of the speech.

EUGENIE SAGE: Thank you, Mr Assistant Speaker. I would comment that about a third of the text of the bill is consequential amendments. One of the Acts that is amended by this bill is the Crown Pastoral Land Act. We have seen, just recently, that Mount White Station, our second-largest Crown pastoral lease administered under the Crown Pastoral Land Act, is unlikely to be able to be purchased by a New Zealand farmer, in the same way that Jericho Station was not, and potentially, because it has been promoted aggressively overseas, is to be bought by an overseas investor. This bill amends the Crown Pastoral Land Act, but it provides no protection in that Act for our Crown pastoral leases—our magnificent high country stations—being alienated overseas.

So it is this major gap in the bill that the Green Party—while supporting the rest of it, around the Torrens system, around indefeasibility of title, and around the modernisation—thinks this bill should have addressed. Otherwise, we will see an increasing proportion of land in New Zealand alienated overseas, and unlike countries like Switzerland, Canada, the United States, Argentina, Thailand, Japan, and Ireland, we do not have strong controls on overseas ownership. So we are supporting this bill, but there is a big gap that the Green Party in Government would remedy by much tighter controls on overseas landownership.

DENIS O’ROURKE (NZ First): New Zealand First is very happy to vote in favour of this bill, which has been the product of long years of work by the Law Commission and others. As I did in the first reading, I want to especially acknowledge the late George Tanner QC and the late Warren Moyes of the Office of the Registrar-General of Land, who were the specific people who really put the heavy work into producing this piece of legislation. Although it is a Government bill, it is actually a bill that any Government of any flavour would be passing in New Zealand, because it does mean a huge step up in quality for land registration in New Zealand. It modernises the whole system and makes electronic transactions very easy to achieve.

It is overall a very good piece of legislation, but it might have been better. It might have been better in a couple of ways that I want to mention. The first one relates to the question of what should a register of land record, apart just from who is on the register? How far should it go? I do not think that this bill actually goes quite far enough. The opportunity has been lost to add valuable information that could have been included in this legislation.

I refer to, in particular, the need for a register of foreign land ownership. That would have been very easy to incorporate into this bill, and the opportunity has not been taken to do so. If you look at why that is important, just look at what has been in the news recently with the announcement that Mount White Station in Canterbury is up for sale. It is not just an important and large piece of Canterbury’s pastoral land but also an iconic sheep station that has been important, not just as a sheep station but for tourism as well. People should really be able to find out whether that sort of land is being sold overseas. We will not know whether it is sold overseas or not, but we do know that it has been advertised overseas and that that is quite likely.

More and more properties are clearly going to overseas ownership. It is important that New Zealanders should be able to discover that without difficulty. They should be able to find out how much land is in overseas ownership, what land is in overseas ownership, and who owns that land. It is not very difficult information to put on a register. It is quite easy to do and quite inexpensive. The point is that there is currently no easy or accurate way to measure the amount of land held under the control of foreign nationals. Unlike other jurisdictions, there is no official database of foreign ownership in this country, and that is very sad, and it is sad that this particular piece of legislation does not cover it. So in answer to my question of what should a register record, it does need to record those details of the nationality of the buyer, where the land is, how much land there is, and so on. It is sad that that is not being done, because although foreign ownership is apparently—according to most commentators—somewhere between 1 percent and 3 percent, that is growing, and if it grows very much more the issues relating to that are going to be greater and greater.

Some will say that the Overseas Investment Office collects data and you can get it from there. But, actually, you cannot, because it does not collect the data properly or accurately, and it is no good going to it. So that does not capture the information that we think should be there, whereas this legislation could easily have done so. It could have provided a valuable resource for policy makers—for the Government itself—as well as the general public. People would then be able to accurately assess foreign landholdings, not just across New Zealand but also within their own regions and communities. The register would provide transparency for all concerned New Zealanders. There are plenty of people in New Zealand concerned about this issue, and they are not getting the information that they should be able to have. It is a very severe defect in this bill that that register has not been provided for when the opportunity was there to do so. It would not have been difficult and it would not have been complex and it would not have been expensive. So I regret that, and New Zealand First regrets that.

Moving on to another issue, which relates to clause 57(3), I am going to repeat what I have said in previous stages of this bill, that that is a problematic clause of the bill. If you look at clause 57(1), you will see that it provides for cancellation of a registration where it would be “manifestly unjust” to maintain it. That is a very high bar to prove something to be manifestly unjust, so you would have to have very good evidence and very persuasive evidence, and that clause along with clause 57(2) are good provisions, with an appropriately high standard to be reached. But then you get clause 57(3), and I think that it is very wrong and should not be there at all, because what that does is it prevents cancellation unless the court finds in the negative that compensation could not properly address the injustice. Well, what on earth has that really got to do with somebody who is applying, who has a right to obtain title—what has that got to do with it? It really is not adequate or fair or just.

If you consider that the high standard of the term “manifestly unjust” in clause 57(1) is met, then there is no reason why the applicant should not be entitled to cancellation, unless the court finds that for some very good reason, justice should not be done. So what has happened is that the burden of proof is the wrong way round, because clause 57(3) requires the applicant to prove the justice of it, and it should be for the defendant, as is normally the case, to prove that it would be unjust for cancellation to be given instead of just compensation, and, after all, clause 59 already exists to provide for compensation where that is applied for.

What you would expect the person to do is to apply in the alternative for cancellation, if that is the just and proper thing to happen—if the person can meet that high bar that I spoke of. But if that fails, then compensation is normally what you would do. So why on earth is clause 57(3) there at all? What is it intended to achieve, except to make the standard of proof so high for an applicant that it will be virtually impossible for such a person to get cancellation where that is justifiable? That clause should not be there. It achieves nothing but to make the standard not just very high but virtually impossible. That is not just. That is not proper. If a person is entitled to obtain title and to have the current registered proprietor cancelled, then all they should have to do is to comply with clause 57(1) and (2) and let the defendant show that it would be unjust to do otherwise.

That is the attitude that New Zealand First takes. I think most jurists would take the same attitude. I cannot for the life of me understand why that clause is there. I do not think it was in any previous legislation. So this is new, but it is wrong. It will cause injustice, and it should not be there.

That is the other reason why I think that this bill represents some lost opportunities. The first reason was the lack of a foreign ownership register of land and this one is just a defect in the bill that was brought up during the previous stages and ignored by the Government members, who apparently did not understand it. I listened to the speeches, and I did not hear anyone give an argument about this. I think the Government Administration Committee got it wrong, as well.

I regret very much that that clause is there, and I think in due course that clause will have to be repealed. It is a shame that the court will be hamstrung by clause 57(3) in the future, in the way that that clause is written, so that it will not be able to do justice in a particular case. But, with those severe reservations, New Zealand First will vote for the bill, which overall is a very good piece of legislation.

BRETT HUDSON (National): It is a pleasure to rise in support of the Land Transfer Bill in its third reading. I sat on the Government Administration Committee, and it was an absolute pleasure to serve on that and to hear the submissions. I would like to congratulate and commend the Hon Mark Mitchell. He was a member of the committee at the time the bill went through the select committee phase, and, of course, he is now the Minister who gets to shepherd it and conclude this item of business in the House with, hopefully, from what we hear today, unanimous support.

The purposes of the bill, fundamentally, were to modernise land transfer to meet, quite frankly, the 20th century, let alone the 21st. It does things such as permit certain notices to be addressed electronically instead of in paper form. Some of us would say that with email being around for as long as it has, that is many, many years overdue. But, overall, the idea to modernise what is otherwise a particularly strong and well-regarded title system is a good thing.

The bill also introduced an area that the previous speaker, Denis O’Rourke, touched on quite wrongly, I think, actually. I think that if that member had spent some time on the select committee he might better understand the provisions and what they introduced in the first place and why. The bill actually introduced the ability in the case of a manifest injustice to permit some sort of redress or some sort of compensation for someone who had fraudulently been done over, if you will, over their land. So if you look at what would otherwise have been the case, of course, the ability to get the right level of compensation or redress simply was not there before this bill.

So the bill says the court can make a decision to provide compensation if the injustice is clear and manifest. The compensation could be monetary; it could be in kind, in some form; or in the case of the provision that the previous member dwelt upon, it could be by returning the title to the original holder. Of course, that would itself, though, have implications for the notion of indefeasibility of title. If the member had sat on the select committee he might realise that that is why it is placed as the final alternative to other forms of compensation, because while this bill modernises the land transfer processes and system, it understands and fundamentally does not alter the linchpin of the confidence in land title in New Zealand, which is indefeasibility of title, and any changes to it, even though they may be just to the parties who were wronged, still have to bear in mind and accommodate the principle of indefeasibility of title. It is a shame Mr O’Rourke did not sit on the select committee, even if he had done so simply in an observational status.

This is a very, very good bill. All provisions of it were well scrutinised and are well worth the affirmation of this House. I commend this bill to the House.

The ASSISTANT SPEAKER (Lindsay Tisch): Members, the next call is a split call. Michael Wood—5 minutes.

MICHAEL WOOD (Labour—Mt Roskill): I am very pleased, also, to rise to speak in favour of this third reading of the Land Transfer Bill. It is a bill that modernises what is a very significant piece of legislation. Reading through the notes, we know that the piece of legislation that is immediately being superseded is the Land Transfer Act 1952, but its predecessor legislation was set up in 1885. So we have considerable periods of time—about 60 or 70 years, it would seem—between revisions of this piece of legislation.

Brett Hudson: About when Winston entered Parliament.

MICHAEL WOOD: I will not comment on whether certain members of this House may or may not have been present at the time of those various pieces of legislation. I do have to comment that I was somewhat amused when Mr Doocey reflected on the Government’s relentless modernising drive in respect of this bill, but, of course, the Hon Ruth Dyson did note in her previous comments that it has taken the Government 7 years from the beginning of this piece of legislation—from the initial report that we received from the Law Commission—to actually progress the legislation through the House. So if that is a relentless modernising drive, I would hate to see what slow and steady progress is.

It is a bill that the Labour Party supports, and it is a bill that is important, really, to our whole economic system and to our whole society because it underpins the way in which—as the title rather suggests—we transfer land and understand the transfer of land to operate. There are a number of principles that underpin that, which are modernised and updated within this bill.

The fundamental principle, which the bill affirms—and this is in the very purpose of the bill and is reflected particularly through the first two parts of the bill—is the Torrens system. The Torrens system—as we discussed at great length in the Committee stage, actually, in what was a very good interchange between members of the Committee and Mr Finlayson in the chair—is a system that evolved in South Australia in the 19th century and has spread around a number of Commonwealth jurisdictions, in which we have absolute confidence in a public, central register of landholdings. That is incredibly important because in our system you want to know that if you own a bit of land, it is understood that you own it. You want to know that if you are buying or selling a piece of land, you know whom you are buying it from or selling it to. Those things are utterly crucial to the operation of our economy and society. So we affirm that within this piece of legislation, but we update important aspects of it.

I was thinking, in preparing for my comments tonight, about the fact that only 10 or 15 years ago, in a job I had that interacted significantly with the financial sector, we still did a lot of our communication through faxes. We still faxed a lot of information. In fact, in many respects it was the main way that we communicated across our organisation. But, of course, that has been largely outmoded now. It was still a paper-based system. That was not all that long ago, and what we know is that across most of the areas of our economic life now, what we actually rely upon is electronic communication. So one of the key things that the Land Transfer Bill does is just recognise that—recognise the reality of the way in which we conduct these kinds of transactions. One of the useful things that the Land Transfer Bill does in respect of this is it not just brings us up to date with where we are at now in 2017 but, actually, we build into this bill—in the latter part—some capacity through the use of regulation for the bill to be adapted to forms of communication that may evolve in the years to come.

Quite appropriately, what we have also done in the legislation—and I approve of this, wearing my Regulations Review Committee hat. As I have said, there is a 5-year check-in on that, so in 5 years we come back and, if via regulation we have determined that alternative methods of electronic communication are appropriate in respect of land transfer, then let us actually either build that into the Act or have a fundamental look at it. Let us not just leave it hanging out there in regulation land. Let us actually make sure that the Act stays live and stays up to date as best we can.

One of the really important areas that we cover in this piece of legislation is the area of indefeasibility. That, of course, is incredibly important. That underpins the Torrens system. It says that if something is here in our land transfer system, that is it. You can take it to the bank; there is no backing down from that. One little area we have looked at in the Land Transfer Bill, which was bit of a tricky area to work through at the Committee stage and also at the Government Administration Committee, was the question of manifest injustice. What actually happens in situations where something arises and we can see that through, possibly, the pernicious actions of one party, something has made its way into the land transfer system that might be manifestly unjust. Someone may have been dishonest or there may have been some kind of error in the system, and so we have a record in the land transfer system where, under the principles of the Torrens system and the indefeasibility, we would otherwise say: “Well, we just accept that. That is the way it is. You cannot change it.” What we have actually built into the Land Transfer Act is this concept of manifest injustice, and it is about recognising that the courts have some capacity—through the High Court only—to recognise the manifest injustice, where that might occur, and to do something to put that to rights.

Mr O’Rourke, in his comments, spoke about the debate that we had about this at both the second reading and the Committee stage. The Labour Party did support the Supplementary Order Paper Mr O’Rourke put forward in this area, which did not make its way through into this bar 3 version of the bill. I do just want to comment on that briefly and affirm that the Labour Party did think that was a little bit unfortunate, because in this area of manifest injustice we set a very, very high threshold—an extremely high threshold—and the things that need to be met are listed in the Act and left to the discretion of the High Court. The point that Mr O’Rourke made, which the Labour Party agrees with, is that if you have met that threshold—if there is a manifest injustice and something is incorrectly entered into the land transfer system—then why would the remedy simply not be to put that right? Instead, what we have built into this Act is a system whereby compensation is considered first. We in the Labour Party just did not think that was quite the right approach. We would have preferred the system put forward in Mr O’Rourke’s Supplementary Order Paper, where we say we would simply put it right. We remedy what went wrong—we remedy the original manifest injustice.

What I would say around the question of manifest injustice, also, is that in the consideration of this bill there were submissions and there was discussion about whether a definition of that should be entered into the Act, or whether we should leave that for the court to determine through its processes—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

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

MICHAEL WOOD: This is a bill that deserves the full attention and time of the House, I feel. In coming back to the Land Transfer Bill, I will just recap on a few of the key points I touched on prior to the break. These are really addressing the core principles of the bill, which the Labour Party, and I think the whole House, supports. These are the things that underpin our incredibly important land transfer system: the Torrens title system, which means that we have an indisputable way of recording landownership in our country, and the principle of indefeasibility, which means that when we say something is in the land transfer system, we say something is transferred, we jolly well know that it is. There is not any dispute about it. We do not have to argue over titles—if it is in the register, then that is it. Also, there is the new principle that has been introduced through this bill, which is that of manifest injustice—the fact that if something really does go wrong in the process of land transfer there is a limited capacity through the High Court to address manifest injustice through a system of compensation or, if necessary, to make corrections in the register.

I do just want to reflect briefly on one of the comments made by my colleague Hon Ruth Dyson, who, of course, chairs the Government Administration Committee, which oversaw this piece of legislation. It is around the area of mortgage fraud and the fact that through the submissions process there was a very considered and collegial process that looked at this area. It had originally been put up, I think, in the Law Commission report that we needed to look very carefully at this area, but as a result of the weight of submissions, particularly from the very good and public-spirited people at the Bankers’ Association, we were able to actually look at the regulatory balance that had been proposed in the first stage of the bill and actually say, well, what is the serious risk of mortgage fraud in our jurisdiction? What is the history of it? And what is the regulatory burden that would be placed on banks and potentially passed on to consumers if we did proceed with the original provisions of the bill?

I think the select committee worked through that process really well and came to a sensible outcome. We are a party that does believe in public-good regulation. Not all regulations are bad. We have them there to protect people. But we carefully weigh up what is the benefit and what is the cost. In this case, we largely agreed with the submissions, which said that, actually, given the very small risk of mortgage fraud in this country, which has been measured as being less than in other similar jurisdictions, that was not a track we wanted to go down.

In concluding, this is a sound, important background piece of legislation. It will not have people jumping on the sofas tonight, but it is really integral to the way that our economy and our society operates, and I have no hesitation in commending it to the House this evening.

MAUREEN PUGH (National): I too stand in support of the Land Transfer Bill tonight in its third and final reading. This bill is sponsored by the Minister for Land Information, Hon Mark Mitchell. I commend the Government Administration Committee for the work that it has done over many years in the preparation of this bill that we are debating, and as we have heard in other speeches tonight, it is better late than never.

The Land Transfer Act is, in itself, over 60 years old. Some of the language in it is, of course, very archaic, difficult to understand, and a bit confusing, but it is also based on a paper-based system. So this new bill will bring the legislation into the 21st century and make it fit more easily with the modern reality of our electronically based systems.

The current Act has to be read in conjunction with two other statutes, too. That in itself is confusing for landowners who wish to make themselves familiar with their rights and their obligations. So, again, it is another really good reason for the updating of this legislation.

This bill has been strongly supported by the legal profession. In fact, the New Zealand Law Society and the Auckland District Law Society have had extensive input into the drafting of this bill. They have been fully consulted throughout its development. It is also supported by financial institutions, and that was through the New Zealand Bankers’ Association and the Financial Services Federation. Land Information New Zealand also consulted very widely with its key stakeholders. Also, the Office of the Privacy Commissioner had a part to play in the development of provisions within the bill. All of those organisations have supported this bill.

It is hugely important that the land transfer system provides people and businesses with secure property rights. This is because of its importance to many New Zealanders. As we understand, for many of those, the purchase of their home is probably their greatest investment—the most expensive investment that they will make in their lifetime. This bill maintains the core principles of the current land registration system, and it introduces improvements that secure property rights. It is a very much needed update to our legislative work, and I have pleasure in commending it to the House.

STUART NASH (Labour—Napier): I stand in support of the Land Transfer Bill. As has been commented on by most of the speakers, this comes out of the 2010 Law Commission review. There are a number of things about this bill that are important, but, first and foremost, when the legal profession recognises that we need to go electronic, you know that we are in the 21st century. It is probably one of the last professions that has embraced technology in a way that many others have before it. I can say that as my father was a lawyer and learnt to type at about the age of 78. Dictaphones are no longer the way, I do not think, any more.

But this is bringing us into the 21st century. It is over 50 years since the legislation has had a comprehensive review. The Law Commission did do a big report on it, but there are a number of points that I would like to make with regard to this bill but also with regard to Land Information New Zealand (LINZ) in general.

Land Information New Zealand, obviously, is the one under which this bill resides, or the registration of title resides, but it also looks after the Overseas Investment Act. There was a point in time when I was the land information spokesperson, and I had a good, hard look at the Overseas Investment Office, what it was doing, and the provisions in the Overseas Investment Act. This is central to the bill, because, obviously, before a foreigner can purchase more than 5 hectares of land, that has to go through a process, which is with the Overseas Investment Office. The overseas investor has to prove that they can add value over and above that which can be added by a New Zealander. It is quite a tight test. There are about six different areas under which an overseas investor can show they are adding value, and it is to do with employment, it is to do with technology, it is to do with adding value, and it is also to do with just a number of different areas. But the thing that concerns me about this is that the Overseas Investment Office is woefully understaffed to the point where it is making decisions that are not in the best interests of New Zealand.

The other thing that is happening with the Overseas Investment Office under LINZ is that, in fact, it is not following up on whether these overseas investors are meeting the promises that they make when they put an application in to buy land. This is obviously under LINZ, and it is a very important part. I think it is important to remember that before a title can be registered—and this is a problem—it has to receive approval from the Overseas Investment Office through the Overseas Investment Act. I know that up to about 2 years ago, and before that for about an 8-year period, there were over 80 overseas investments that had actually gone through the sale and purchase process for an overseas investment that had not received approval from the Overseas Investment Office. So they had been registered with LINZ and the sale had gone through, but it had not received approval. The interesting thing about this is that every single one of these was actually granted retrospectively. I think what that says is that we are not taking a really good look at who is buying our land, why, under what conditions, and, as mentioned, whether they are meeting the promises made.

This is where we have come in. We support this bill because it is a largely technical bill but it is important to move with the 21st century. Our Land Information New Zealand agency is actually held up internationally as one of the best. The system we use is held up as one of the better ones—there is no doubt about that. It is very difficult—we talk about indefeasibility—actually, to commit fraud under this system because of the checks and balances.

The interesting thing about indefeasibility, as Michael Wood mentioned and no doubt a number of other speakers have, is that you can claim compensation only if there has been fraud, but not if there has been a mistake. There are one or two examples of where a lawyer has registered the wrong title, and the claim of the person—usually the purchaser—is only through the Lawyers Fidelity Fund or by suing the lawyer. They actually cannot get the property back once it has been registered. I did not sit on the Government Administration Committee, and I would have enjoyed it actually. I would have loved to hear the submissions from the various lawyers involved in this and from the Law Society because it would have been quite interesting, but I am not too sure whether that has changed in this. I suspect it probably has, because it is about fairness.

The other thing, of course, is that this should, hopefully, reduce compliance costs for mortgagees. Whether or not it does remains to be seen, and there are a number of bills that have appeared before this House—one in particular that I spoke about last week—where a piece of legislation has actually reduced the costs for the ratepayer or the taxpayer or the person involved in the transaction. We had a real concern that that cost would not be passed through but that the margin would be taken by those in the profession who actually are responsible for advocating for the Act—i.e., the person who was buying or selling a house, who should have benefited from any changes in efficiency or any reduction in the cost of the transaction, actually was not. There is a little bit of concern about this. I am not too sure whether it was canvassed at the select committee. I am assuming it probably was. But it is my view that if efficiency is driven through by legislation, then everyone should benefit from this—of that there is no doubt.

There were also amendments made, as mentioned, to reduce compliance costs, and it is mainly for banks, which would have had to take reasonable steps to verify the identity of mortgagors, including offshore investors. Again, I come back to—we have got an anti - money-laundering bill going through the Law and Order Committee at the moment. Whilst it is slightly more onerous, or we are placing a greater responsibility on lawyers and other professions that deal with overseas clients, we are placing a greater responsibility to ensure that, in fact, the transactions that are going through the system are robust and are nothing to do with money-laundering or financing terrorism. It is absolutely necessary. I would like to think we are leading the way in this part of the law, but in fact we are not. We are followers.

Michael Wood and Ruth Dyson talked about our global reputation and how it is very important to protect the integrity of our system because it plays into our global brand but also what we would never want to be seen as is a soft touch for people who are laundering money. What we do know—and I am sure Phil Twyford has talked about this before—is that the buying and selling of properties is an easy way to launder money, so what we are very much looking to do is tighten up on that. Anyone who is involved in nefarious activities, do not come to New Zealand, because we are going to make sure that you are caught out. Under the proceeds of crime legislation we can actually confiscate a lot of this stuff, without actually having—[Interruption] Yes, back to LINZ. One of the principles—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Back to the bill, actually.

STUART NASH: Back to the bill, actually—yes. One of the fundamental principles of the land transfer system—it will remain unchanged. But some improvements that were recommended include, for example, giving the court limited discretion in the event of fraud or other illegality to restore a landowner’s registered title in rare cases where such intervention is warranted to avoid a manifestly unjust result. Of course, manifestly unjust is—

Hon Ruth Dyson: Pretty unjust.

STUART NASH: It is extremely unjust. But, again, it is one of those concepts that often need to be defined in a court of law. I do not think there is a legal definition of manifestly unjust, but I think that if you use the reasonable person definition, then it is pretty easy to come up with a definition ourselves.

What it does is it reinforces the obligation of lenders to property to verify landowner identity for mortgage purposes. Again, this is just tightening up the rules. It is common sense. This is the thing about this legislation—it is actually common sense. It does bring the system—a very old system. The Torrens system goes back centuries, I think, does it not?

Hon Member: 140 years.

STUART NASH: 140 years. It does bring it into the 21st century. What it does do is it clarifies the scope of the powers of correction of the Registrar-General of Land, which is very important for those who are interested in this game. It also provides new mechanisms for noting land covenants where the benefit attaches to a person rather than to land—if that makes sense.

But, anyway, what I would like to say is that I think the Minister is very responsible in actually accepting the vast majority of the Law Commission’s recommendations.

Hon Ruth Dyson: Who was that Minister?

STUART NASH: The Minister was Maurice Williamson—a good Minister, I understand. I think he is actually off to—I am not too sure where Maurice is, at the moment.

Phil Twyford: They should bring him back.

STUART NASH: They should bring him back. Was he any good, Phil, at housing? I am not sure.

But the bottom line is that we do support this bill. Labour supports most common-sense bills. There need to be more of them in this House. But we do support the bill for the right reasons, and that is it is bringing things into the 21st century, it is providing clarity, it is reducing compliance and red tape, and it is exactly the sort of bill that I think New Zealanders expect us all to work very hard on. Thank you very much.

Bill read a third time.

Bills

Residential Tenancies Amendment Bill (No 2)

First Reading

Hon Dr NICK SMITH (Minister for Building and Construction): I move, That the Residential Tenancies Amendment Bill (No 2) be now read a first time. I nominate the Local Government and Environment Committee to consider this bill. The bill addresses three issues. Firstly, it implements a common-sense approach to the issue of who pays for careless damage caused by a tenant; secondly, it addresses the contemporary issue of meth contamination of rental properties; and the third reform addresses an anomaly where the Tenancy Tribunal does not have jurisdiction over the renting out of non-residential properties.

This bill builds on our changes to residential tenancy law made last year. In that bill we made smoke alarms compulsory from 1 July last year, and I note and welcome the drop in fatalities in house fires as a consequence. Last year we also introduced a requirement for all social rental housing to be insulated by 1 July last year and for all other rentals to be insulated by 1 July 2019. This provision continues this Government’s leadership on home insulation. Since 2009 we have insulated over 320,000 homes. Others talk; we do. This compares to just 50,000 homes that were insulated under the Helen Clark Government over the same number of years, and with that sort of comparison—320,000 compared with under 50,000—I do find it a bit rich for the Opposition to be constantly questioning our leadership in that area.

The third change we made last year was the establishment of the tenancy compliance and investigation unit to ensure that our housing regulations are enforced. There are now over 200 property cases before the Tenancy Tribunal from that unit, and that reform is also proving successful. These tenancy law changes in both the first and now the second bill are just part of the Government’s broader, ambitious programme around housing reforms, which has included the special housing areas, the Crown Land Development Programme, KiwiSaver HomeStart, and the Resource Management Act changes, which are seeing record levels of construction and improved housing standards. We need to accept that the housing challenges we face do not have a single bullet, a single magic answer, but actually involve a whole series of reforms.

The first set of amendments addresses the consequences of the 2016 Court of Appeal decision Holler v Osaki. That decision changed the previously understood legal settings for tenant liability for damage in rental properties. As a result, tenants are now largely free from the cost of careless damage they cause in rental properties and landlords are bearing most of those costs. This situation is neither fair nor appropriate. Landlords should not be paying for damage to their rental properties that they have not caused, and, what is more, it provides the wrong incentives if tenants do not have some level of responsibility for their actions. But nor should tenants be exposed to the risk of litigation by insurance companies for hundreds of thousands of dollars for catastrophic damage caused by a careless act, such as in the Osaki case. Many tenants assume that the risk for catastrophic damage caused by a careless act is covered by their landlord’s insurance.

This bill makes it clear who pays for what. Tenants will be liable for each incident of careless damage they cause, up to a limit of the value of their landlord’s insurance excess but with a cap of 4 weeks’ rent. These damage liability settings strike a balance between incentivising tenants to take reasonable care of the premises they rent and protecting tenants from very high cost and risk. The bill also encourages cost-efficient insurance arrangements, which will reduce disputes, litigation, and the potential for the double-up of insurance arrangements. It specifies that an insurer of premises against destruction or damage has no right of subrogation in relation to a tenant’s liability under the bill, and to ensure tenants are not out of pocket for careless damage, insurance companies will not be permitted to take into account a tenant’s payment to the landlord for careless damage when calculating the insurance payable to the landlord under a policy.

It is important to note that the proposed settings apply to careless damage. Tenants will remain fully liable for intentional damage, damage caused by an act or omission that constitutes an imprisonable offence, or if the insurance money is irrecoverable because of a tenant’s act of omission. Insurers will retain a right of subrogation against tenants for these categories of damage. These exceptions from the Property Law Act will be incorporated into the Residential Tenancies Act. Equally so, landlords will be fully responsible if it is natural disaster risk such as a flood or earthquake and will need to take out appropriate insurance accordingly. Tenants and landlords will need to discuss insurance arrangements so that tenants understand the exact level of their liability. The bill adds this understanding by providing that a landlord must disclose relevant insurance information or that he or she does not have the insurance over the rental premises. Failure to comply with the insurance disclosure requirement will be an unlawful act with a maximum penalty of $500 for non-compliance.

The second set of amendments is required to protect tenants and landlords from the harmful effects of methamphetamine contamination and to provide clarity on the level of contamination where it poses a serious risk to health. I must acknowledge the work of Andrew Bayly, the MP for Hunua, and Alastair Scott, the MP for Wairarapa, for the work they have done in this area, including the development of a member’s bill. Meth use and manufacture are serious ongoing issues in the rental market both in social and private rentals. Contaminated homes create real and serious risk to the health of occupants, but, equally, we do not want homes being vacated as a consequence of an overly cautious approach to this matter.

The key provisions of this bill provide clarity about the rights of entry and clarity about the rules to disclose the test results. They also enable us to be able to incorporate into the regulations the standard that we announced last week—developed by Standards New Zealand—about the appropriate level of contamination whereby properties should not be occupied, and ensuring that is based on sound science.

The last part of this bill makes it an unlawful act with a maximum penalty for exemplary damage of $4,000 for a landlord to provide premises that the landlord knows not to be fit. There is a range of rental properties that could be unlawful for residential purposes, where the building is either a garage or a commercial building, or in some other way it does not comply with the relevant building health and safety regulations. The difficulty for the Tenancy Tribunal is the ruling from the High Court that the Tenancy Tribunal does not have jurisdiction in the event that it is not a residential property. So the purpose of this part of the bill is to ensure that where landlords do rent out inappropriate properties, there is the capacity to be able to hold those landlords to account.

I think we can all think of situations that occurred in Wellington because of the Kaikōura earthquakes—situations where commercial buildings that had been deemed earthquake-prone were rented out as residential properties. I think most in this House would find that abhorrent, but it is unacceptable that the Tenancy Tribunal was prohibited from being able to have jurisdiction in that area.

Equally, there have been examples around the country of garages or other properties that are being rented out that do not go anywhere near meeting the requirements of the Residential Tenancies Act but where there are limitations on our new compliance teams being able to enforce them because of that jurisdiction issue. My view is that the amendments in this bill that make it plain that the tribunal has full jurisdiction over unlawful residential premises will strengthen the regulatory environment and ensure that those people who attempt to rent out such properties are held accountable.

The three provisions of this bill—clarity around the issue of damages, improving the management in terms of meth contamination, and further enforcing our capacity to ensure that properties are of a good standard and are able to be tenanted—are just part of this Government’s pretty common-sense and practical approach to the Residential Tenancies Act. As I said earlier, it builds on our work of requiring smoke alarms and of requiring insulation. It will improve the safety, the protection, and the clarity for the rental sector, and I commend the bill to the House.

PHIL TWYFORD (Labour—Te Atatū): Labour is supporting this bill to select committee because we judge that there is enough in this bill that it is worth giving it some serious scrutiny at select committee. I will have something to say about each of the three main provisions in the bill, but it is our argument that it is a bit strange that Nick Smith would bring a bill like this to the House to improve rental conditions—three practical but fairly minor improvements that need to be made—when the housing market and the rental market are in a state of meltdown and, of the half of the New Zealand population who are living in rental housing, a significant proportion of those people are living in despair at the moment because they are desperately trying to keep their heads above water in the face of skyrocketing rents, poor quality housing, and what is, essentially, an unregulated market. But we will come back to that.

The first part of this bill that I want to comment on is the provisions that deal with methamphetamine contamination. The bill will give landlords easier access to properties to allow for the testing for methamphetamine contamination and it will allow both landlord and tenant the right to terminate a tenancy if tests come back at unsafe levels. The bill also, I think helpfully, sets up a regulation-making power to set the standards and the guidelines for meth testing, including what would be the maximum acceptable level of contamination.

Nick Smith told Radio New Zealand earlier today: “I cannot be a miracle man.” Nick, the country does not want you to be a miracle man; the country wants you to do your job as housing Minister and do something about the appalling conditions that renters in this country are facing and the plummeting rate of homeownership that now sees—on your watch, Nick Smith—the lowest rate of homeownership since 1951. It has fallen every week that you have been in the job, Nick Smith, since you took it on as housing Minister. So the country does not want miracles; it just wants the Minister to do his job. To be honest, Nick Smith, you have sat around for 3 years—3 years—while cowboy meth-testing companies have preyed on the anxieties of tenants and landlords, and, because of this Minister’s absolute negligence, Housing New Zealand alone has wasted $30 million—

Peeni Henare: How much?

PHIL TWYFORD: —$30 million—testing State houses that they thought were contaminated with meth and remediating those State houses. Hundreds of families have been needlessly evicted because of faulty meth-testing standards and guidelines that the Government was responsible for. This Minister, Nick Smith, the incompetent Nick Smith, sat around for 3 years while $30 million was wasted and more than 500 State house tenants were evicted on the basis of faulty evidence—of testing procedures and standards that simply cannot distinguish between homes that have a residue of methamphetamine that might be harmful to people’s health and a residue that poses no risk to anyone’s health.

The testing and the standards that Nick Smith has presided over cannot distinguish between a home that has been used as a P lab and a home where someone has smoked P. The former is a serious risk to people’s health; the latter poses no risk. And yet that Minister has sat around, sat on his hands and done nothing while tens of millions of dollars have been wasted and hundreds of people have been needlessly evicted by the Government’s State housing agency.

The provisions in this bill are long overdue, but it needs to be said that without proper regulation of the meth-testing industry that has grown up in the last few years in response to this problem, and in a situation of moral panic about P contamination, this Government has allowed lack of proper information, lack of data, lack of decent standards, and no accountability for meth-testing agencies, which have made a killing at the expense of landlords and tenants. So it is 3 years overdue, but what I say to this House, and I hope we will have the opportunity to have this debate in the select committee, is that without proper regulation of the meth-testing and remediation agencies, these provisions are very unlikely to be effective.

The other area that I want to touch on is that this bill, basically, clarifies the law around intentional damage—careless or intentional damage by a tenant. As the Minister said, the Osaki case, that the Court of Appeal found in April last year—it applied the provisions in the Property Law Act that usually apply to the commercial property industry to residential tenancies and, basically, changed the law that, up until that time, had meant that tenants were obligated to pay for the costs of damage to rental premises caused by intentional or careless damage. Basically, the Court of Appeal ruled that tenants are immune from a claim by a landlord where the rental property is damaged by careless or negligent action. The effect of that was, essentially, to let tenants off the hook. It meant landlords could no longer pass on, for example, the cost of their insurance excess to tenants. I think it is widely agreed that it has tipped the law too far in favour of tenants, and there is no disincentive for careless or intentional damage.

So what the officials and the Ministers tried to come up with is a new formula that will provide a better balance of liabilities between landlord and tenant that will encourage tenants to take care and not expose them to, potentially, the risky and expensive legal action that insurance companies could take. We look forward to debating this in select committee. I know that the Property Investors Federation has some doubts about whether or not the right balance has been struck here, and I look forward to hearing from it and also the various tenants’ advocacy groups, which I know were consulted by Ministry of Business, Innovation and Employment officials in developing this bill, but it will be good to really tease that out at select committee and see whether or not this particular formula strikes the most appropriate balance.

The third aspect that I want to finish on is that this bill aims to strengthen the powers for prosecuting landlords who have rented out unsuitable accommodation, such as garages, warehouses, and industrial buildings. There was one very notable case—I think it was 61 Molesworth Street—where, at the time of the Wellington earthquakes, the ratbag owner of that building had rented out a lot of that commercial space to tenants. They were found to be living not only in kind of unsafe and unsuitable accommodation but—what the bill points out is that if people are not in premises that are consented for residential purposes, then landlords cannot be held to the provisions of the Residential Tenancies Act.

So we applaud the intent of this legislation, but it is ironic for a Government that has overseen an explosion in the number of New Zealanders living in substandard and overcrowded housing, whether it is unconsented garages—and we have seen cases of Work and Income New Zealand referring people who would otherwise be homeless to live in unconsented garages in people’s backyards. It is ironic that a Government that has presided over that is now spending $100,000 a day on putting homeless people up in motels, and is now cracking down on this particular aspect of it.

I want to finish with the point that there is a massive reform agenda to fix the housing crisis and make conditions better for renters. There are so many things that need to be done to improve the quality of rental accommodation, to give renters more security of tenure, and to curb the property speculation that is driving house prices and rents through the roof, but this Government prefers to focus on fairly small and relatively inconsequential matters when it brings a bill like this to the House.

ANDREW BAYLY (National—Hunua): It is a pleasure to be talking on the Residential Tenancies Amendment Bill (No 2). As the Minister, Nick Smith, explained before, there are three key issues that this bill is seeking to address, but I want to focus on the methamphetamine issue, which is highlighted in this bill. As the Minister alluded to, I put forward a member’s bill early last year to deal with the issue of methamphetamine contamination in houses. The lead-up to that was actually a lady in my electorate called Sarah Higgins, who was a member of the local board, brought this to my attention, and, as a result of further work, has actually ended up with this legislation now entering this House tonight—a very important piece of legislation, to deal with P. Unfortunately, Sarah is no longer with us, so this legislation is part of Sarah’s legacy in terms of her life, in terms of dealing with the issue of P.

We are all very aware that P is a scourge on our society. It is an insidious blight. This bill is seeking to deal with some of those issues. I think we are all aware that, in terms of what P does, first of all, it has those terribly adverse health effects, particularly for the young and the elderly, as they are the most susceptible to P. The second thing is the social dislocation that it causes, particularly for people who rent and have to find new premises if they find their houses are contaminated. Thirdly, there is the need to protect the rights of landlords who own property and conduct themselves appropriately.

Under the former Prime Minister, now Sir John Key, and currently under the auspices of the Deputy Prime Minister, the Hon Paula Bennett, this Government is focused on addressing the issue of P. One of the 13 initiatives that John Key as Prime Minister established in December 2015 was the establishment of a working group under Standards New Zealand to address three issues. The first issue was whether 0.5 micrograms is the right threshold to determine whether a house is contaminated. The committee has worked its way through, and it is the independent committee that has come back with the recommendation that the threshold should be set at 1.5 micrograms. I heard the previous speaker, Phil Twyford, and if he did some research he would actually find that there are varying levels adopted by different States and countries around the world. But we have landed at 1.5 micrograms.

The second thing that the committee considered was how to standardise the testing of P in property. Many testing companies adopt different practices. It makes a big difference where you test in a property as that will result in a different outcome. The working committee has worked assiduously over the last year or so on how testing is done and on setting a standard for that testing.

The third most important thing it considered was how you would know that a house has been properly contaminated, and, again, it has worked through that process and standardised it. So all those things will help formulate and be the basis of this bill.

I could speak on this topic for a long time, but I am not going to. All I can say is that I am most grateful to the Minister for referring this issue to the Local Government and Environment Committee, of which I am the chair. I am looking forward to working through this issue because it is vitally important, and I see it as a legacy of the late Sarah Higgins. Thank you very much.

CARMEL SEPULONI (Labour—Kelston): Labour will be supporting this bill. I am a little bit surprised, because the Residential Tenancies Amendment Bill—the original one; the first one—came to the Social Services Committee, and this one is going to another select committee. I was just talking to my colleague Phil Twyford about why that might be. Perhaps the Government is trying to avoid our housing spokesperson by sending it to another select committee, but we will send him in that direction when the bill is being considered, so that it can get some good Phil Twyford housing analysis going on there.

We will be supporting the bill. There are a number of changes; however, there are three that we deem to be most important in this bill. First, it will give landlords easier access to their properties to test for methamphetamine contamination and it will allow the landlord or the tenant to terminate a tenancy if tests come back at unsafe levels. The bill also sets up a regulation-making power to set the standards and guidelines for meth testing, including establishing a maximum acceptable level of contamination and guidelines for testing.

We have been going on about this for quite some time. It is long overdue. National’s housing Minister Nick Smith has for far too long allowed a cowboy testing industry to run riot for the last few years without any proper regulation. Tenants and landlords, who, understandably, are concerned about meth contamination, have not had reliable standards or testing for the last few years. Along with that, Housing New Zealand has wasted about $30 million on meth testing and decontamination, and it has evicted more than 500 tenants unnecessarily on the basis of faulty testing that has been unable to prove whether there is residue that could be a risk to the health of tenants. Tenants have been evicted on the basis of meth residue being present, but without baseline testing there is no reliable proof whether they were responsible, or some earlier tenant. So it is really another Nick Smith fiasco. The bill’s provisions are long overdue, but they are unlikely to be effective without some regulation of the meth testing and decontamination industry.

The second point to make about why we are supporting this bill, and the second area of primary interest to us, is that it clarifies some laws around where the tenant is liable for damage to rental premises broadly encompassed by intentional damage by a tenant and for damage that was caused by a tenant as a result of an act that constitutes an imprisonable offence. It also clarifies that tenants are responsible for damage caused by a guest of a tenant—i.e., someone who has been given permission to be on the premises, as opposed to a gatecrasher or an intruder.

The law and practice around the liability of tenants for careless or intentional damage to a rental property was changed by the court judgment in Holler v Osaki. The bill tries to set out a new balance of rights and responsibilities for both landlords and tenants. This is a complex area, and we are looking forward to hearing from the Property Investors Federation and tenants advocacy groups at the select committee so that we can try to craft a solution that is workable and fair for both parties.

Thirdly, the bill strengthens the law for prosecuting landlords who have rented out unsuitable accommodation, such as garages, warehouses, and industrial buildings. However, given National’s seeming reliance on housing people in garages due to its complete inaction on the housing crisis, it seems odd that it is willing to do this.

We will be supporting this bill to select committee. The three issues that I have outlined are worth getting sorted out, but the strange thing is that with half of all Kiwis living in rental housing, there is so much more that National should be doing to fix a broken rental market. I see it all the time in my electorate of Kelston, where constituents are paying through the nose for substandard accommodation.

I saw one case recently where a family was homeless and living in their car. They were then put into emergency accommodation and then they were forced to take up the one house that they were able to actually rent, because the landlord said “OK, I’ll give the house to you.”, and within the first 3 weeks they had two issues with the sewerage, where sewage was spilling out on to the driveway. They had a landlord who was very slow to respond. They were told that the house had four bedrooms, but they got there and one of the bedrooms was actually the lounge. The house was not insulated. It was cold. There were no smoke alarms. There was a whole lot of rubbish that was left behind from the previous tenant, which the landlord had not fixed up. There was a whole lot of things that were broken when they moved in and they had a landlord who had no intention of fixing any of that up.

Really, as a consequence of the housing crisis, what we have here are landlords who are cowboys, who are exploiting the housing crisis, and who have no qualms with exploiting desperate people in desperate situations. Without the right checks and measures in place, that will only continue and, unfortunately, get worse. We do need a much broader plan to be able to address this. We have come up with a number of things that we would do and that we would implore the Government to do.

We have said that we will legislate to improve standards for rentals to make sure that they are all warm and dry. Andrew Little’s healthy homes bill will be back in the House shortly for its second reading. It would be great if the National Government would pay attention to that.

We will be massively increasing the supply of housing, as we have said, through our KiwiBuild policy, and that will flow on to increase the supply of rental properties. So with that, hopefully, we will not have so many people in desperate situations and landlords then willing to then exploit them, not only through substandard living conditions but also through rents that are completely disproportionate to what they are renting in terms of the amount that they are paying.

We have to address the property speculation issue, and we have said that we will be curbing that. We will be closing down the speculators tax loophole and banning foreign buyers from buying existing homes. I cannot see why the Government has such an issue with that. When you go out on to the street and you speak to the public and you tell them “Actually, we’re going to stop non - New Zealand residents and non - New Zealand citizens from being able to purchase properties in New Zealand.”, they breathe a sigh of relief. They look at you and say “That’s just common sense. Why wouldn’t the Government do that?”, but, for some reason, that side of the House finds it so difficult and cannot even contemplate being able to ban foreign speculation.

We do need to look at the issues around security of tenure and the right to make a house a home. We have far too much transience with regard to our children. In fact, we come across schools that say they have got like a 30 percent turnover of students, and the reality is that it comes down to the fact that their parents do not have stable housing. If they are in rental properties and there is no security of tenure, and if they cannot afford to buy a house and they are constantly getting shifted on, then what kind of disruption does that cause to the education of those children? As schools are telling us, it is causing huge disruption. So it is about healthy homes and it is about making sure that those kids are well but also it is about giving them that sense of stability in the house and also in the neighbourhood, in the community, and in the school, so that they do not have to constantly shift.

Moreover, much of the debate on this bill is likely to end up on new changes to meth contamination standards, and changes are good. However, what would be better is National actually showing some guts on methamphetamine supply in New Zealand, and then we would have to worry less about it being smoked in our homes. I will not forget that one of the first things those members did was remove the pseudoephedrine from our cough medicines in our chemists. What kind of impact did that have on the meth problem in this country?

Hon Ruth Dyson: None.

CARMEL SEPULONI: None. It has gone up every year significantly under those members’ watch. It is cheaper and easier to access than ever before. It is cheaper and easier to access than ever before. And, what is more, since Bill English got into the Prime Minister’s office he has put the Department of the Prime Minister and Cabinet reporting on the meth action plan on ice. That is not leadership. New Zealanders want to see something done about this issue. So far they have seen nothing. The only thing they have seen from that side of the House is the removal of cough medicines that actually help alleviate symptoms, but nothing to actually alleviate the meth problem in this country. We need some action, and, unfortunately, the reality is—well, actually, no, not unfortunately; fortunately—I think the only way New Zealand is going to see real action is if it changes the Government on 23 September.

Matt Doocey: Thank you, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Well, I have not called the member yet.

Matt Doocey: Oh, it was just anticipation.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Is the member just going to call in the traditional way?

Matt Doocey: Mr Assistant Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Matt Doocey.

MATT DOOCEY (National—Waimakariri): Thank you very much, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): That is fine.

MATT DOOCEY: It is a privilege to rise in support of what I would call a cracker of a bill, the Residential Tenancies Amendment Bill (No 2), in its first reading. Just listening to that last speaker, Carmel Sepuloni, talking about a change of Government—I sit here and reflect after listening to that speaker and, of course, Phil Twyford, and I think of three terms in Opposition, and I just think “How out of touch”—how out of touch. She talks about banning foreign speculators, when all the reports have come out that less than 3 percent of housebuyers are non-domiciled in New Zealand. She is too busy reading Denis O’Rourke and Tracey Martin’s newsletters—that is what I would say she has been doing.

Then we get Phil Twyford up. You cannot deny his enthusiasm and his energy, but, man, he really needs to come south of the Bombay Hills, does he not, and see how we are doing in Canterbury, where rental prices have dropped over 10 percent in the last year. The biggest dilemma now is that terraced houses are not renting because renters now have the choice of having their own stand-alone houses. That is what happens when the Government intervenes, but when it tried to intervene in Point England, well, it was not allowed to, were we? No, and the Opposition tried to vote it down, but it shows that when the Government steps in and frees up land, which increases supply, it equals demand.

Back to this bill—even though I have not been prompted, I will go back. I am very diligent and compliant. I will just say this is a cracker of a bill—succinct, very clear, and connected to the issues. There would not be one electorate or list MP in this House who has not dealt with either tenants or landlords and the issues that they face. I think this bill is very clearly drafted to address some of those key issues.

Unfortunately, as has been spoken of in the House tonight, we do have a growing P issue, something that should be taken very seriously. In my former work in the mental health field I worked in drug services, and P, scarily enough, unlike any other drug—you primarily have to be predisposed to mental health issues for other drugs to bring out psychosis, but after doing pharmacology and working with these clients, it is very clear that P is one of the very few drugs that can actually bring out mental health issues in people who were not predisposed to mental health presentation. So it is a very scary drug that we should be taking all actions to address. I think it is quite right, with the growing numbers of reports of manufacturing of P in rental properties, that this bill will go some ways to addressing that—being able to intervene early and being able to support tenants and, ultimately, families who are renting properties so that they may be protected from P-contaminated houses.

As a member of the Local Government and Environment Committee, I am looking forward to this bill being sent there for the deliberations and for the submissions, to ultimately bring back to the House a bill that will support many mums and dads, whether they be tenants or whether they be landlords. Thank you very much.

MARAMA DAVIDSON (Green): The Green Party will be opposing the Residential Tendencies Amendment Bill (No 2). Of all the things—of all the things—that a Government could be doing right now with purpose and urgency and energy to directly address the very urgent problems that are happening in our communities, of all the things—my goodness, what is happening? What is happening? We have got 40,000 children a year being admitted to hospital because of illnesses linked directly to cold, damp homes. We have got 16,000 deaths a year—

Metiria Turei: Hundred.

MARAMA DAVIDSON: —1,600 deaths a year—thank you, Metiria Turei; one is too many, but 1,600 is what we have—of elderly people linked to cold, damp houses. We have things we can do right now to address those problems, but, of all the things, we have Nick Smith’s little minor bill.

We do agree with some parts of this bill. For example, on its own we do agree that the positive step to make it easier to prosecute people who take advantage of the housing crisis by renting out properties that are unfit for residential purposes is a good step. On its own, we would support these parts of the bill, but this is Nick Smith’s style. He sneaks in these things that seem like an on-the-edge positive step. He sneaks those into a bill, and in the meantime forgets about all the other urgent things and urgent solutions that this Government has the power to put in place right now. Instead, he sneaks through something that is just skipping around the edges. So I have a huge issue.

We are talking about residential tenancies. We are talking about renting, here. Māori and Pacific homeownership rates are plummeting. They already were not too flash, but they are plummeting. They are plummeting. Te Matapihi believes that political inaction is the reason for a huge decline in Māori and Pasifika homeownership, and so do we. The Green Party supports what Te Matapihi is saying, because between 1991 and 2013 Māori homeownership has declined down to 32 percent, and Pacific 38 percent. If we are talking about legislation to improve our communities and our country, and looking at renting and looking at renters, what on earth is this? Rau Hoskins of Te Matapihi says 9 years of political inactivity is what has caused these plummeting rates of Māori and Pacific homeownership. We need bold action. We need bold action, and what we have got here is this legislation.

I want to pick up a little bit on the meth testing. I have been knocking on doors and walking around my community in Manurewa and I have been talking to neighbours of people who have been evicted next door or a few houses down who are really upset when they talk to me. They say: “Marama, those people were an amazing family. There was no way that they should have been evicted from their home.” We have to weigh up the harm that we do when we evict people. Evicting people is a big call. Evicting people is a big call, and we have to be prepared to understand what we do.

This meth testing has an underlying problem. The advice from the Drug Foundation is that representatives of the meth-testing industry—hello—are overrepresented on the panel developing the standard. The Drug Foundation worries that the bill will legalise those silly standards and will result in a whole lot of harm. Bottom line: there is no science for setting a contamination level for meth use. We just cannot be sure. So we have to weigh up the harm. Yes, we do want to have safe homes—absolutely—but we also need to weigh up the harm in evicting people from their homes when we are not clear exactly who was responsible for any meth contamination, and when we are not clear exactly how to measure the harm that can be caused by any amount of meth. So, yes, we want to ensure that our homes are safe from meth. But we have to, in this House, understand the impact that evictions are having on real lives—on families, on children, on the elderly. We have to understand that here, and it is our job to weigh up that harm.

Our houses are too cold, but the problem with that is that, because of the dire situation of this housing crisis, too many tenants do not want to complain about that—too many tenants are going to hang on to whatever condition their house is in. Even if they do make the bold decision to try to raise that awareness to a landlord about the condition of their home, more times than not there is not going to be good action. We need to put that leadership from here in the House on to the minimum standards for what a warm, healthy, safe home should look like. There are too many instances where damage is raised by the tenant, and the least possible action is done that the landlord can get away with, if at all.

When we heard some of the submissions from some of the advocates, including the Sisters of Mercy from Manukau, they talked about how, more often than not, their tenants would choose not to make a complaint because they would have to join the line with 30, 40, 50 other applicants for a house. That is how we are ending up pushing people along this spectrum right down to the bottom of homelessness. We have to be really clear about making sure that we have got minimum standards—making sure that we have got strong legislation so that all landlords can do the right thing. There are many who do, but those few that do not do the right thing, they have a real impact on many families—many families. That is the sort of legislation that we need to be getting through.

We need to have secure tenancies so that renters can feel free to make a complaint without the threat of being evicted out of retribution. We need to wipe leasing fees. Can we just have some legislation right now around that, because in this unstable housing environment, tenants and families and people are having to come up with leasing fees. It is a big ask, and those leasing fees are getting more and more and more at the moment. We have to put legislation in place to restrict rent increases, and come up with a formula that is not going to make it so shaky and unstable and destabilising for families to just put down roots and live. These are the things that the Greens would do.

We have so many more homes that need good insulation—so many more homes that need good, proper insulation. If we want to talk about standards and levels of insulation, let us just say that one tamariki who gets sick and admitted to hospital from housing is one too many. Let us just say that one annual winter death of any elderly person is one too many. Let us put those standards—let us insulate according to that. Let us aim for that. Why not? Let us be inspiring and bold and visionary.

The Greens too understand that we have to address this speculation environment—this privileging of speculation that we have at the moment, when homes are for living in. Homes are not supposed to be so heavily the business that we have got going at the moment; they are supposed to be for living in, for putting down roots. Homes are for living in, not for business trading, and we know we have to do the legislation that will address that.

These are the bold things that a Minister of housing should be doing right now. I was told in an inequality hui that I attended in Hawke’s Bay yesterday that the advocates in the community are just tired—they are just tired. They want us to fix this—they want us to fix it—and we can; we have got the power and we have got the tools. We will not be supporting this bill. We want something brave and bold that will actually address the causes. Thank you.

DENIS O’ROURKE (NZ First): My speech is going to be a little different from some others, because I am actually going to stick reasonably close to what is actually in the bill. New Zealand First supports the purposes of the bill and will vote for it to go to the select committee for examination. The only criticism I actually have of the Government over this bill is why it took so long to bring it before the House, because some of the problems addressed by the bill have been around for quite some time. Those purposes are, firstly, to expand liability for careless damage to rental premises caused by a tenant or a tenant’s guest; secondly, to define the rights and responsibilities of the parties where there is methamphetamine contamination in a rental premise; and, thirdly, to divine residential tenancies that are so substandard that they are to be made unlawful for residential use.

I am glad that the bill addresses the problem of methamphetamine contamination, because that is a problem, as I have just said, that has been around for some time. I think it is actually the single worst problem in the residential tenancies market. This bill will give landlords access to their properties to test for meth, and tenants would be able to terminate their tenancy if the test results show unsafe levels of meth.

I am glad, also, that the bill addresses the problem of liability for careless damage caused by tenants and by tenants’ guests, because that is also a problem that has been around for some time. Tenants will be liable for the cost of their landlord’s insurance excess, up to a maximum of 4 weeks’ rent, for each incident of damage caused by the carelessness. I think that is a very fair and appropriate provision, and I am glad to see it there.

Most of all, I am glad that the bill strengthens the law for prosecuting landlords who tenant unsuitable premises. The housing crisis, caused by the ineptitude of the National Government, has caused, as we all know, a distressingly large number of people to be forced to live in cars, garages, industrial buildings, warehouses, under bridges, and so on and so on. It has therefore been an opportunity for unscrupulous landlords to rent that kind of accommodation to people who cannot afford better or who cannot find suitable accommodation. One of the effects of Government mismanagement of housing has been to cause rents to rise hugely, forcing people to continually look for cheaper and cheaper and worse and worse accommodation. Christchurch is an exception to that, simply because of the sheer magnitude of the insurance money that has gone into that city to provide more and better housing, and also the city council has been pretty good about making land available. But, generally, the market has become a paradise for bad landlords and a disgraceful standard of rental accommodation at the bottom end.

Moving on to the bill itself, it defines the term “unlawful residential premises” as those that are used for accommodation for a person but cannot lawfully be occupied for residential purposes, and where the landlord fails to comply with his or her obligations set out in the bill in relation to legal impediments to occupation at the start of a tenancy and ongoing compliance with building health and safety legislation. That is exactly as it should be. Properties that do not reach a reasonable standard should be declared unlawful to rent to any person.

I am pretty pleased, also, to see that if the Tenancy Tribunal finds that premises are or were, at any material time, unlawful residential premises, then there are some pretty good, practical sanctions provided for in the bill. One of those is that the bill limits the liability of the tenant to pay rent arrears or damages or compensation to the landlord. So if a tenant is living in very substandard accommodation, they simply can stop paying the rent, knowing that it will not be enforceable by the Tenancy Tribunal. That is a very good sanction on a landlord—a very practical and direct one—that I think will work very well.

The tribunal can also make an order for the landlord to actually repay rent paid by the tenant. That is a step that I had not thought of, and I think that would be an even more powerful sanction on bad landlords. The tribunal can make a work order to require the landlord to take the steps available to fix any legal impediment to occupation and to comply with the applicable building, health, or safety legislation. Again, it is a very practical measure. So I thoroughly approve of all three of those measures, and it is one of the main reasons why New Zealand First is pretty pleased with the bill.

Of great importance: the landlord must not provide premises that are meth contaminated. If the landlord knows that because of tests carried out in accordance with regulations to be established, and the premises have not been properly decontaminated, and the landlord nevertheless goes ahead and lets it, there will be an amount payable for contravention of up to $4,000. Again, that is a pretty significant sanction, and it is deserved where a landlord knowingly lets a property that is meth contaminated, because of the danger presented to the tenants concerned.

The rights to end a tenancy of a contaminated property are also well defined in the bill. It allows the landlord the right to enter the premises for testing and to take samples, and the notice for that is 48 hours but not more than 14 days, and the time of the day is specified as well. The tenant must be informed of those results within 7 days—so they must share the information. The bill also provides similar sorts of provisions in the case of boarding house tenancies. That is good to see as well.

If the tests show that any part of the premises is methamphetamine contaminated, either party can then terminate the tenancy. If it is the landlord, they need only give 7 days’ notice, and if it is a tenant then just 2 days’ notice is required. That is appropriate for premises that are as dangerous as they would be if they were contaminated with methamphetamine. In addition to that, the rent abates, unless, of course, the tenant is responsible for the contamination in the first place.

As I have said, I think these are pretty good, practical measures, which probably should have come in some time ago, but it is good to see them finally getting here before the House. It is also good to see that there will be regulations brought down in due course to prescribe a maximum level of methamphetamine permissible for premises and also to provide for the testing of premises for the presence of methamphetamine and to prescribe the decontamination process.

Unlike the Greens, I actually think this is a pretty good and pretty well-rounded bit of legislation. It is quite narrow in its scope, but it covers areas of problems that have been coming up for so long. Just about every MP in this House would have had people come to them describing these kinds of problems. I just wish it had been done a lot sooner, but I am very pleased to see that this bill is before the House now, and I look forward to looking at the bill in much greater detail in the select committee, where we will make sure that it actually does do the things that are claimed of it, which I have spoken about this evening. For all those reasons, New Zealand First will not have any hesitation in voting for the bill to go to the select committee, and I do look forward to dealing with it there for the benefit of both tenants and landlords—for the future.

JOANNE HAYES (National): I rise to take a brief call on the Residential Tenancies Amendment Bill (No 2) in its first reading. I want to congratulate the Minister for Building and Construction for bringing this bill. As the previous speaker, Denis O’Rourke, said, we have waited a little while for this bill to get here. It is a narrow-focused bill, and I say that it is about time that it came before this Parliament.

I just want to say that some of the kōrero that came out from the Greens tonight over the harm to families from eviction from houses that are P contaminated—I just want to say that if it were my family, I would like them out of that house and away from that house so that the various testing could carry on. I would like to remove them, to keep them away from the harm that that house might impose.

I like this bill because it is a strong piece of legislation. It does deal with the three main things that actually affect people who are renting and landlords who are renting their properties, and it also empowers the tribunal as well so that it is able to do things that it is not able to do until this bill comes into law.

As I said, a lot of my colleagues and some of the people on the other side of the House have already given very good outlines of this bill. I have no hesitation in supporting it to select committee, and I welcome it to select committee. Thank you.

METIRIA TUREI (Co-Leader—Green): I just want to be really clear about the meth issues that have been raised by my colleague Marama Davidson. We know that as a result of a poor standard and poor testing quality, Housing New Zealand has spent millions of dollars using shoddy tests and making unnecessarily harmful decisions that have led to families having to leave their homes for no good reason. While Jo Hayes and National might think that it is fine for people to be evicted from their homes for no good reason, based on shoddy science, and at great expense to the public, the Green Party does not think that is justifiable at all. We think that is a waste of public money, and, more importantly, actually, it is a totally unjustified disruption of the life of a family who have been evicted, who have very low incomes, and who have nowhere else to go. So Jo Hayes and National might think it is quite fine for people to be evicted from their homes and made homeless based on that shoddy science; the Green Party does not, and that is why it is not supporting this bill.

I would also just note, on the two other provisions in this legislation, that I am really pleased that there will be a greater enforcement around non-residential properties, and the quality of those non-residential properties, that are being used for residential purposes. That is fair enough, if you are talking about garages. What about some decent law from National that holds residential properties to a higher quality standard? Would it not be great thing if we had a law that said that those properties that are residential properties and are unfit because they are cold and damp and cause people illness—

Marama Davidson: They make people sick.

METIRIA TUREI: —that is right—because they do not provide basic services like decent water, like not having holes in the walls or in the floors, and like being properly insulated so that they keep people warm? Would it not be fantastic if we had a law that said that those residential properties were unfit for our families to live in, and that those landlords—

Phil Twyford: Going to have to change the Government for that, Met.

METIRIA TUREI: We are going to fix that. That is quite right, Phil Twyford. But would it not be great if that was the law that we were discussing today? That would mean that New Zealand families could guarantee that the homes they are renting, which are supposed to be homes that are warm, safe, and dry, actually would be warm, safe, and dry—imagine that. But, no, National has no interest in protecting and maintaining the quality of residential properties. It is spending the time, the last remaining weeks that it has in Government, focused on a sliver of the issues that matter. And, yes, it does matter that landlords—exploitative landlords—are renting out garages and commercial buildings and outdoor sheds as residential properties, and charging people a huge amount of money for that—

Marama Davidson: Huge.

METIRIA TUREI: —a huge amount of money for that. Yes, that matters.

We also have other major issues in the rental housing market that National should have been addressing over the last 8 or 9 years, and it has failed. National has been running from the major issues in housing that this country faces, and now, in its last remaining weeks in Government—it is only a few more weeks to go before it is out—it brings us this bill. We are simply not going to put the Green Party name to a piece of legislation that is potentially going to cause more people to be homeless and is going to make it very difficult for tenants, especially under the Holler v Osaki case. I know about the Osaki case and I know the details of it, and I understand the need to do something to clarify the law, but this bill is a sledgehammer that undermines tenants’ rights, and the Green Party will not put its name to that either. We will not support this bill. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): Peeni Henare, tēnā koe—5 minutes.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Assistant Speaker. There have been a lot of interesting points being made across the House in relation to this particular bill. I want to just pick up on one of the points made by my colleague Metiria Turei. It is too easy to limit our scope, when you look at this bill, to simply just garages. It is easy enough to look over the history of this particular Government and find many cases of landlords who have been caught renting out garages or substandard living arrangements to desperate people in a housing crisis. It is easy to find landlords who are doing that with garages, but I take the point of my colleague and say, actually, and, in particular in recent times, boarding houses come under that. The substandard arrangements and living conditions in boarding houses is just not acceptable.

This particular bill actually does not address that. In a quick look under Part 1 of this particular bill, and I looked up under the original act, is section 66(H)(2)(b), and all it asks is that the boarding house room be of a clean state—of a clean state. That is just not good enough when we look at recent reports about substandard boarding houses, where rooms are covered in mould, and where the infrastructure and the facilities in those boarding houses are just not up to scratch. Yet, in the original legislation all it states is that the room has to be clean, and that is just not good enough. So this bill does not go far enough in that respect, but it does have some other good parts of it, mentioned by my colleagues in this House, around the meth testing and around other issues as I have already pointed out—landlords who, during a housing crisis, are exploiting families and desperate people who are looking for accommodation.

We need only look into recent times, as recent as March, where a landlord in Manurewa—and my colleague Marama Davidson has mentioned this—was fined for renting out a substandard garage to a whānau who were desperate. The landlord was ordered to repay almost $16,000. That was as recent as March, but you can go back even further to 2013 where one particular landlord was found guilty of multiple offences—multiple offences—where they converted garages and substandard areas, letting spaces in order to make profit. They rented 17 rooms out, in fact, to families who were desperate in a housing crisis, and that is just not good enough. That is just not good enough.

Sure, this bill might head some way towards curbing that and towards making sure that it does not happen in the future, and we will be supporting the bill to make sure that even more stories from families who are affected out there are actually brought forward to the select committee. We want to hear from housing groups. We want to hear from social housing agencies. We want to hear directly from families who have been affected by many of the changes.

I want to pick up—just in the small time that I have left—on the point made by my good colleague Marama Davidson. She makes a very good point about those families who were evicted for, in some cases, accusations of involvement with P, when that actually was not the case. The long-term stigma that is attached to those families who are trying to find a house, during a housing crisis, cannot be denied. It cannot be denied. Agencies and landlords look at a person’s record when they go to hire out houses, and under the unfair testing regime of this Government, families have fallen victim to that and have been evicted. Sadly, what that means for them is that the opportunity for them to get a house in the future is slim to none, and that is just not good enough, and that is not fair.

This bill does not address this, but what it will do is set a regime for testing that will actually be more effective than what has already been mentioned in this House. It is a waste of $30 million—$30 million. That is a heck of a lot of money to be wasted on a testing regime that did not work. So we do support this bill to the select committee stage. We do encourage everyone who is impacted by the amendments in this particular bill to come forward and make a submission to the select committee. Kia ora.

NUK KORAKO (National): Tēnā koe e Te Mana Whakawā. Thank you for the opportunity to be able to take a short call on the Residential Tenancies Amendment Bill (No 2). I think it is really refreshing to know that all but one party, I believe, is actually supporting this bill to the select committee, and I think the important thing—just hearing the different speeches from both sides of the House—is that we all agree that, first of all, this bill is a very, very practical bill. It is a common-sense bill and it probably reflects, in a lot of ways, that more New Zealanders are actually choosing to live in rental accommodation. One thing here is that with that is an industry where you have scrupulous landlords, and even tenants, actually, who are involved in it. This Government is very much committed to providing better protections for both responsible tenants and also responsible landlords.

Just hearing from the Green Party, though, it is a little difficult to accept the fact that it is not supporting this bill, because I would think that a lot of its supporters are actually the type of people who would require a number of these protections that this bill is going to undertake. It was really interesting, actually, listening to the New Zealand First speaker, Denis O’Rourke, because he very much critiqued the fact that there are new things, particularly the scourge of society that is the P epidemic, and that there is necessary legislation that this bill gives to try to address a lot of those issues that come from the use of P, particularly in accommodation.

But I suppose one thing that I think is important is an excellent example of the real practicality of this legislation. If we go only a very, very short distance from here, to Molesworth Street, there was a situation where an old office block was transformed illegally into residential apartments. This happened, and then the problem came after the earthquakes here. What happened was that the existing law did not actually—the building was not at all covered by the Tenancy Tribunal to have jurisdiction to remedy complaints that we had evicted residents who were in a converted commercial building. When the tenants went to the residential tenancy association, it could not help them. The reason for that was that the accommodation was illegal originally, and there was no way that the tenants could be assisted. But if this legislation had been in place, then that would not have been an issue. It would not have been a problem.

So that actually highlights one of the great things that this Government is doing—the foresight, particularly around other legislation that we have put in place. This shows a Government that has not given up at all. This Government is continually bringing excellent legislation to this House, all the way up to the final term.

Metiria Turei: About luggage? Excellent legislation about luggage!

NUK KORAKO: So—oh, that is OK. You used the word “imagine”, and I was just thinking, when you used that, “Imagine there was no Green Party.”, and that is easy, very easy, if you try. So kia ora to you. Nō reira, e mihi atu ki a koutou katoa. Imagine!

JENNY SALESA (Labour—Manukau East): Thank you so much for this opportunity to have a speech on the Residential Tenancies Amendment Bill (No 2). Labour supports this bill to the select committee, and I look forward to the discussions at the select committee, as well as to hearing some of the submissions, especially submissions from tenants when they come to present to the select committee. The bill deals with a lot of issues, but the three most important for the Labour Party that this bill actually addresses are the following: first, that it will address liability for damage to rental premises caused by a tenant; second, meth contamination in rental premises; and, third, tenancies over rental premises that are unlawful for residential use.

Now, I will discuss the third issue first, but, before I do, I want to agree with my colleague Metiria Turei. One of the things that she said was would it not be wonderful if this was legislation that would do so much more—for instance, legislation that would ensure a warm, dry, safe home for all of our people; one that would ensure a warrant of fitness for homes.

When we have 1,600 people a year pass away, and one of the reasons is because of the condition of the houses that they live in, and when we know from a coroner that 2-year-old Emma-Lita Bourne, from my electorate in Ōtara, died because of the condition of the house she lived in, which was a State house, there is so much more that we as members of Parliament can do to ensure that we save people’s lives.

On the third point, this bill would look at what can be a rented property, covered under the Residential Tenancies Act. This bill aims to clarify the kinds of properties covered by the Residential Tenancies Act 1986; in particular, tenancies of rental premises that are unlawful for residential use. It is unfortunate that I come across so many unlawful residences like this in Manukau East and South Auckland. There are certain streets in my area where, as you walk down the street, almost every second house has a garage that is a converted garage where families, children live—garages where it is leaking. Some of these garages are mouldy.

One particular example was of a mother with six kids. Most of her kids were really, really sick. One of her children had special healthcare needs, and this particular lady had been living in this illegal garage for months and months. She had no other option. In fact, this particular garage was one that belonged to the mother of one of her son’s friends. So one of her sons goes to school, and one of his friends whom he plays hockey with has a mother who is a teacher at the school. When this teacher heard about the fact that they lived in a car, she offered up her garage. It was not until she came asking for assistance from the MP that they were able to be placed in a house. The point I am making is: why is it that we live in a country now where we have so many families who live in illegally converted garages like this?

Now, we know, and I heard the Hon Minister, when he was in the chair earlier on, refer to the fact that the initial residential tenancy legislation that has been passed—one of the things is that the Ministry of Business, Innovation and Employment (MBIE) has a compliance unit that now looks at landlords and prosecutes them. But some of these folks—our office has been involved in some of these tenancy issues, and we take them to the Tenancy Tribunal. They are awarded funds because they are living in illegally converted garages or working sheds and all that kind of stuff, but these landlords then legally become bankrupt and so then no one actually pays these particular families. So having legislation like this that gets passed, and having a unit at MBIE that can prosecute folks—and I have actually read somewhere that the compliance unit over at MBIE has 15 compliance officers; if we are to look at the practical implication of that, for all of New Zealand to have only 15 compliance officers at MBIE to look at monitoring all of the possible illegally converted garages, all of the sheds that people are living in, all of the residential properties that should be warm, dry, and healthy—15 compliance officers just does not cut it.

Hon Member: Nick Smith’s smiling. He thinks it’s funny.

JENNY SALESA: No, it is actually not very humorous. When you actually go to various houses where you see a house that has no running water, a house that has no working bathroom, a house that has windows with no glass in the windows for 95 percent of it, and a house that is infested by cockroaches, rats, and all kinds of insects, this is not the kind of house that people should be living in, that people who are paying rent, people where—some of these landlords are getting the funds directly from Work and Income New Zealand (WINZ) themselves. Some of these families are actually encouraged by WINZ to go and see these various houses. It is not good enough.

Last year an investigation by Lisa Owen of TV3 revealed some of the worst kinds of working sheds that our people in South Auckland are living in—illegal, non-consented working sheds. She showed us that some of these working sheds had mould on the outside—not even looking at the mould on the inside of these working sheds. Some of these garages in South Auckland are being rented out at up to $560 per week—$560 per week for an illegal, unconverted, cold, freezing garage that vehicles should be in, not families with children. So I commend this Government for bringing this legislation through, but I just do not see it as the solution to ensuring that we have fewer families living in such illegal places.

The other area that this legislation deals with is with meth contamination. Now, it is one thing to actually allow legislation to look at, and have regulation where we would look at, testing kits where, hopefully, not that many people are going to be evicted out of the houses. Now, we know, and we have heard many other speakers cover this point, where there are over 500 State houses that people have been evicted out of, that the Government has spent more than $30 million not only to evict people but also to decontaminate these houses. But we have so many who are living out on the streets and too many who are homeless. Over 41,000 people are homeless.

When we look at the housing crisis in Auckland, it is by far the area that is experiencing the worst, but it is not the only place that experiences the housing crisis right now. Here in Wellington and the Hutt Valley, we know that Lower Hutt and Upper Hutt have over 266 families on their waiting list. When we look at Whangarei, there are more than 150 people on its waiting list. There are 166 in Napier and over 199 in Tauranga. These are issues that this Government should most definitely be looking at and making sure that our people have a house to live in.

The third and final point that this bill actually covers is tenants’ liability for damage. This bill would refine some of the law about tenant liability in relation to their accidental damage to the rental property. These provisions for tenant liability would reverse the recent Court of Appeal decision about limits to tenants’ liability so that they would actually pay part of the damage that they themselves have actually caused. Broadly speaking, intentional damage by tenants would be something that they must actually contribute to. Thank you so much for this opportunity.

A party vote was called for on the question, That the Residential Tenancies Amendment Bill (No 2) be now read a first time.

Ayes 105

New Zealand National 58; New Zealand Labour 31; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 14

Green Party 14.

Bill read a first time.

Bill referred to the Local Government and Environment Committee.

Bills

Te Ture Whenua Māori Bill

In Committee

Debate resumed from 21 June.

Part 5 Authority to act in relation to Māori freehold land (continued)

The CHAIRPERSON (Lindsay Tisch): When we were last considering the bill, we were debating Part 5. The Minister the Hon Te Ururoa Flavell has the call and has 34 seconds remaining, if he wishes. I call Peeni Henare—tēnā koe.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Chair. I was hoping that perhaps Minister Flavell might use his seconds just to mihi us and bring us back to our kaupapa. It has been a while since we have had our hands on Te Ture Whenua Māori Bill. In fact, it has been quite a number of months where we have been working through parts, part by part, obviously, and we are now at Part 5. So I do apologise if some of this does seem a little repetitive to yourself, Mr Chair, and the Committee, but there is going to be a little bit of a recapping process. We may be going over a little bit of ground that I know the Minister has actually addressed, some of the Supplementary Order Papers (SOPs) in particular, in his responses as the Minister in the chair.

I want to start my contribution today, obviously, by (1) welcoming everyone back to Part 5 of this particular bill. I will move straight to the amendment tabled by my colleague Meka Whaitiri on Wednesday, 31 May 2017. I acknowledge that the first three parts of that particular amendment, as tabled by my colleague, are to parts we have already debated, so I will not go over those. But I will come to the amendment to clause 154 as a start, where it says: “In clause 154(1)(b), after ‘how governance agreements are’ (page 129, line 12), insert ‘reviewed and’.” I have a look there, and clause 154(1)(b) says: “includes provisions relating to the registration of governance agreements, the transfer of assets and liabilities to governance bodies when they are appointed, quorum and eligibility requirements for kaitiaki of certain governance bodies, and how governance agreements are cancelled.” We are hoping that through this amendment we can include the words “reviewed and” as part of a more robust process for this particular bill.

The other amendment is to clause 184, and we will just flick through the pages here. This was, if I recall correctly, addressed by the Minister, but if we could have a refresher, if you like, from the Minister in the chair on this particular issue—because I do think it is an important one. I recall that I raised it at one point in time; I know that other colleagues in the Committee have too. The amendment was to clause 184 around kaitiaki number and eligibility requirements. In clause 184(4)(a), it says there: “A person is disqualified from being a kaitiaki if any of the following applies: Criminal history (a) the person has been convicted within the last 5 years of an offence relating to fraud or dishonesty”. The last 5 years—that was the issue that we had. We are proposing in the amendment tabled by my colleague Meka Whaitiri that that be extended to 10 years.

This is for reasons which are, to me, anyway, quite obvious. If there is one thing I have noticed in my work as a land administrator, it is that those who are qualified or those who do qualify to be able to hold those positions are actually quite hard to find. They are quite hard to draw out of the community, the whānau, the iwi, and the hapū to be leaders in those particular fields of administration. We know of instances where some people have actually been convicted of things 8 to 10 years ago who, according to this particular bill, will now qualify to be kaitiaki or qualify to be administrators of Māori land. That is of great concern to us. Five years is not long enough, and the amendment, as tabled by my colleague, is looking to extend that to 10 years, which I think is a reasonable step. Ten years is a reasonable step when we consider other Acts that, actually, quite clearly describe the qualifications for those who want to be administrators, trustees, etc. So that is one of the amendments tabled by my colleague Meka Whaitiri.

The other one, as tabled by Meka Whaitiri on Wednesday, 21 June, refers specifically to clause 193, for which this amendment is asking: “In clause 193, delete subclause (4)”. Subclause (4) is quite clear: “The court is not required to direct the chief executive to arrange a meeting of the owners under subsection (2)(a) if the court is satisfied”, and it lists (a), (b), and (c), and subparagraphs (c)(i), (c)(ii), and (c)(iii). What this particular amendment from my colleague Meka Whaitiri is proposing is that that particular subclause be deleted in its entirety.

The other amendment, and I spoke very briefly to this at one point in time—I do understand that the Minister did give some form of response, but I would like to just reiterate my SOP, SOP 322, to the floor, with reference directly to clause 197. I think it is actually strengthening that particular clause. The purpose of this amendment is so that a court-directed kaiwhakahaere, who has been appointed to report to the owners, to report on any matter referred to in clause 196(1) at a meeting called by the chief executive—such a meeting must be held every time a direction is issued under that clause. It must be held.

I flipped through the schedule and looked at some of the responsibilities of the kaiwhakahaere, and I do recall, if I recall correctly, the Minister in the chair actually talking about how he felt that that clause was robust enough. I am going to argue once again that I do not believe that it is, and that to say “must” instead of “may”, while minuscule to some, is actually a very important thing. It actually requires more engagement between the kaiwhakahaere, the court, and those particular landowners. I think that is something that is worth pursuing in this particular debate on Part 5. Just a reminder—that is SOP 322, in my name, looking specifically at strengthening clause 197 with the direction of “must” instead of “may” with regard to meetings being held every time a direction is issued under that particular clause.

So those are the amendments that are sitting on the Table at the moment. I would, if I could, encourage the Minister, just because of the drawn-out nature of this particular bill—I think it would be important and helpful to the Committee if he is able to, if he could, restate those positions on the amendments, if those have already been stated; if not, then that he do state a position on those particular amendments, for or against, however that might fall. That will allow us to move on to other clauses in this particular bill. I will wind up my contribution on this particular part in the hope that the Minister will address those. Thank you.

KELVIN DAVIS (Labour—Te Tai Tokerau): It is my pleasure to actually take my first call in the Committee stage of Te Ture Whenua Māori Bill. For various reasons, I have been fortunate enough to have been granted leave to attend to events up in Tai Tokerau while the Committee stage has been going on. My apologies if I do repeat issues that have been raised before, but, as I said, this is my first contribution in the Committee stage of this bill.

In addressing Part 5, I just have to apologise because I will be flicking through, from Part 5 back to the schedules and back to other parts of the bill as well, because they tie up—just by the nature of the size of the bill, being some 16 parts and eight schedules, it takes a bit of to-ing and fro-ing through the pages of the bill to actually pull together various arguments.

Clause 154(2) talks about—I will read what it says: “A governance body, whether it is a body corporate, the trustees of a trust, or a statutory office holder, is managed by its kaitiaki, being the persons who occupy a position in the body that is comparable with that of a director of a company.” My issue here is the use of Māori terms in what is, for all intents and purposes, the English version of this.

The problem can be that there is confusion for our people around the term “kaitiaki” in this. Kaitiaki in Māori means—“tiaki” means to care for something; “kai” at the front of a verb has the effect of putting e-r on the end of a word. So “tiaki”, meaning to care for something; “kaitiaki”, meaning a carer. For me, in this context, a kaitiaki is not really something that is comparable to that of a director of a company. To direct something is, like, to tohutohu. In my belief, and I will admit I am not a fluent speaker of Te Reo Māori, a more appropriate term would have been a kaitohutohu, but there are probably even more appropriate terms to use for a director of a company. My preference, in these English versions of bills, is actually just to use English terminology, and if there is a Māori translation, to have a Māori translation there. But certainly for somebody in a position that is comparable to that of a director of a company, kaitiaki is not the best term to use.

I will move on to clauses 154(3)(a) and 154(3)(b)(i). It is the word “owners”. I will just read what subclause 3 says: “The types of governance body that may be appointed are set out in section 158. The key difference between the types of governance body is the extent to which owners or the court have a role to play in the appointment of kaitiaki, as follows: (a) if the governance body is a rangatōpū, kaitiaki appointments must be approved by the owners …”. Further down it says in subclause 3(b): “(i) the owners will have direct involvement in the process for appointing a kaitiaki …”.

That sounds great, on the surface. My issue is with who the owners are. Which owners? It makes it sound like all owners will have input into these decisions. The reality is that it is really only the owners who, basically, can be contacted and know that there is going to be a meeting of sorts to make these decisions. This particular clause 154(3) asks us to refer to schedule 3. I refer to schedule 3, clause 5(2), that “The incoming owners must approve the appointments of at least 3 kaitiaki who are eligible under section 184(3) to hold that position.” Clause 5(3) of schedule 3 states: “If the proposed rangatōpū is registered as a body corporate or operating under an existing trust deed, the incoming owners may approve existing directors or trustees as kaitiaki or appoint new kaitiaki,”.

It talks a lot about the ability of owners to influence things such as appointments of kaitiaki. If we flick back in the bill—this is clause 51A—it talks about the participation thresholds. This talks about—in fact, I will read it: “(1) The participation thresholds that must be satisfied for participating owners of a parcel of land to validly agree to a decision under Parts 1 to 9”—so that includes Part 5 that I am talking about—“or a governance agreement—(a) are the thresholds specified in this section;”.

I just want to go through those participation thresholds. If there are 10 or fewer owners of a parcel of land and they are making a decision, say, on the appointment of a kaitiaki, as in Part 5, then all the owners must participate. That sounds pretty straightforward. However, clause 51A(3)(b) states that if “there are more than 10 but not more than 100 owners, there must be participation by at least 10 owners whose individual freehold interests total a 25% or more share in the parcel:”. So that means if there are up to 100 owners, 90 percent of those owners may not actually participate in this decision making, and when it comes to a vote, you need a majority of those 10 owners who are participating. So, in other words, six can make the decision on behalf of the other 100. Six out of 100—so 6 percent of the owners can make a decision on behalf of the rest of the owners.

I understand that there needs to be some sort of threshold. I just think that these thresholds that affect Parts 1 to 9, including Part 5 that I am talking about, are set pretty low. In Te Ture Whenua Māori Bill that we are discussing, the problem is not so much of Māori land being lost out of ownership, from Māoridom into non-Māori hands. It is more that some owners may be disenfranchised by others who are owners—others who are probably more knowledgable of processes and laws such as this.

However, I will go on to talk about—if there are more than 100 but not more than 500 owners, there must be participation by at least 20 owners. So 20 owners out of 500 is less than 5 percent. So 5 percent of the owners may participate in this decision making, and of those 20 you need a majority of the 20, so that is 11—11 people can make a decision that overrides the interests of 489 people. Subclause (3)(d) states that if “there are more than 500 owners, there must be participation by at least 50 owners whose individual freehold interests total a 10% or more share in the parcel.” In other words, you could have, say, 2,000 owners but only 50 of those owners need to participate in the decision making, of which you need a majority. So that is 26 people out of 2,000—my maths is not that fast, but it is a very low percentage of people who can make decisions on behalf of the vast majority.

Like I said, I understand that there needs to be some participation threshold because some owners may be dead. Many owners cannot be contacted. We have to look at the reasons why some of those owners may not be contactable. It could be, for example—as we know, there are many owners, New Zealanders, Māori, living in Australia now. So what happens if the owner lives in Australia, works up in the mines somewhere, is barely contactable, and the times when the meetings are being held are possibly inconvenient to that owner who happens to be living overseas—

Pita Paraone: Too bad. They miss out.

KELVIN DAVIS: As my colleague from New Zealand First says, it is too bad; they miss out. That to me is really unfortunate. That person may be, like I say, working in the mines. They may not be able to access the hui that is being held by Skype or even by phoning in, so there are a number of reasons why owners may not be able to participate and so I just think that the thresholds are set way too low. I think that the—

MARAMA DAVIDSON (Green): I want to take a short call. I have a specific question—and I will reiterate, sort of apologising to the Committee and to the Minister, that it is going to be an ongoing, important point: we have this huge legislation; huge Supplementary Order Papers; so many, many changes; judges and lawyers and the like have admitted to how difficult it has been to keep on top of what is happening here. It is going to be the nature of the debate as well, and, of course, that is one of the main points of the Green Party as to why we cannot support this bill. We want it to be fully understood and fully mandated by our people. Regardless of what is in it—the good points and the not-so-good points—it needs to be fully mandated and fully understood by our people.

I specifically wanted to ask whether the Minister in the chair, Te Ururoa Flavell, could address Part 5, clause 158, “Who may be appointed as governance body”. So let us just be really clear—yes, there we go, flipping around, that Part 5 is about who has the authority to act in relation to Māori freehold land. Then clause 158(1) sets out governance bodies.

Hon Te Ururoa Flavell: Can I get a reference?

MARAMA DAVIDSON: It is clause 158, “Who may be appointed as governance body”, and, again, I hope I am looking at the most updated version. “Who may be appointed as governance body”—clause 158, then it goes to clause 158(1): “Any of the following may be appointed as a governance body for Māori freehold land:”. It outlines who may be appointed as a governance body for Māori freehold land: a Māori incorporation, trustees of an ahu whenua trust or a whenua tōpū trust, a new rangatōpū, an existing rangatōpū, an existing statutory body, a representative entity. But then it goes to clause 158(2): “However, a governance body that is a rangatōpū, a Māori incorporation, or the trustees of an ahu whenua trust or a whenua tōpū—(a) must not”—so this an exclusion, I think—“be a party to more than 1 registered governance agreement;”.

What I am getting at here, for the benefit of all of us and for our people, is this: could the Minister explain this particular exclusion—are we talking here in the legislation about conflicts of interest and who has got their hands in where? I could be wrong, but it would be great to have some clarity—trying to get at the nub or trying to get at the heart of what this particular clause 158 “Who may be appointed” is getting at, whom it lists, and then whom I think it is excluding.

It then says in clause 158(2), “However, a governance body that is a rangatōpū …”—and so forth—“(a) must not be a party to more than 1 registered governance agreement …” and then it goes back, I think. So this is the thing. It is an exclusion but with an inclusive clause: “…but (b) may, if the governance body is already managing Māori freehold land under a registered governance agreement, be appointed to manage additional Māori freehold land …”.

I think the change to this particular bit that is crossed out is “under replacement” instead of “under a new”. So if the Minister could just clarify that. I mean, we can go through this legislation. It would be good to have the narrative of either what problem is trying to be addressed in this particular part, in this particular clause, in this particular line of the legislation. And, actually, that is still not going to suffice in getting clarity, I think, for our people, but we are here to try to take the opportunity to ask the Minister. Could the Minister please try to get to the core of the particular clauses that I have raised and that I am sure my other colleagues will raise tonight in the Committee. Thank you.

PITA PARAONE (NZ First): Tēnā koe, Mr Chairman. I am pleased to be able to take a call in this Committee stage of Te Ture Whenua Māori Bill, and I want to concentrate on clause 156, “Rights of owners of Māori freehold land managed under governance agreement”. If I can recall correctly, the last time this bill came before the House and was in the Committee stage, the Minister took some time to remind me that Māori land has always been subject to registration with the Land Transfer Office. But what he omitted to tell the Committee is that while that may be so, land that was owned by more than a certain number of owners was not registrable in the Land Transfer Office—if I can recall correctly. I only say so in that I remember the 1967 Māori land Act where the then Minister introduced a clause that allowed for Māori land that was surveyed with four owners or fewer to become what was termed “Europeanised”. Part of that process was that they could be registered with the Land Transfer Office.

One needs to ask the question: why was it limited to just four owners? It is quite easy to imagine the difficulty it would be to register all Māori land that was surveyed but had a large number of shareholders. I just want to say that it seems to me that this bill is aimed at overcoming that difficulty, in terms of registration, by recognising governance entities as being legal owners. So, at the moment, I have interests in Māori land, of which I am a legal owner. But if I choose, and my fellow owners choose, to appoint a governance body to administer that land, then I lose my legal ownership—it automatically transfers over to the governance body. I just wonder whether, in fact, many of our people out in the real world realise that they actually lose their legal ownership if they choose to appoint a governance body. That is how I read this particular clause. If I am wrong, then the Minister will certainly correct me.

Again, it is all about, it would seem to me, making it much easier for certain groups to be able to, what I would say, manipulate—manipulate the ability to do what they want to do, even if it is against the wishes of the majority. I hope the Minister may take a call to explain that particular aspect in terms of owners losing their legal right as owners to a governance body, which then becomes the legal owner.

BARBARA KURIGER (Junior Whip—National): I move, That the question be now put.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 279 in the name of the Hon Te Ururoa Flavell to Part 5 be agreed to.

Amendments agreed to.

The question was put that the following amendments in the name of Meka Whaitiri to clauses 154 and 184 be agreed to:

in clause 154(1)(b), after “how governance agreements are”, insert “reviewed and”.

in clause 184(4)(a), replace “5” with “10”.

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

Ayes 57

New Zealand Labour 31; Green Party 14; New Zealand First 12.

Noes 62

New Zealand National 58; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the following amendment in the name of Meka Whaitiri to clause 193 be agreed to:

in clause 193, delete subclause (4)

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

Ayes 57

New Zealand Labour 31; Green Party 14; New Zealand First 12.

Noes 62

New Zealand National 58; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 322 in the name of Peeni Henare to clause 197 be agreed to.

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

Ayes 57

New Zealand Labour 31; Green Party 14; New Zealand First 12.

Noes 62

New Zealand National 58; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

A party vote was called for on the question, That Part 5 as amended be agreed to.

Ayes 62

New Zealand National 58; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 57

New Zealand Labour 31; Green Party 14; New Zealand First 12.

Part 5 as amended agreed to.

Part 6 Operation of governance bodies

The CHAIRPERSON (Lindsay Tisch): This is debate on clauses 202 to 237 and schedule 3.

Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe, Mr Chair, kia ora tātau katoa, ngā mihi ki a tātau e wānanga nei i tō tātau kaupapa.

[Thank you, Mr Chair, acknowledgments to us all, and congratulations to us on deliberating our proposal here.]

Part 6 is very much around the operation of governance bodies and, I suppose, talks about the regulations and the operations of how those entities will act. This part, from my perspective, strengthens those protections that have been spoken about by members throughout this session, making sure that we put in place good protections to ensure that Māori land remains in Māori hands by placing a greater emphasis and clearer responsibilities around governance bodies and kaitiaki. It introduces stricter eligibility criteria, more duties, responsibilities, and accountabilities that are actually similar to those that are applied to company directors, and this issue was raised in terms of, I think, the amendment that Mr Henare moved around the thresholds for 10 years, 5 years, and so on about whether a trustee should sit on a board or not, or an entity.

So I think it is very much trying to maintain a similar level of accountability to what is set out in other pieces of legislation. The whole idea is that the trustee’s duties in respect of Māori land should, obviously, be managed by the trust. The Māori Land Court will also have jurisdiction to investigate governance bodies within some parameters. The court’s power includes the new powers to disqualify individual governors—referred to as kaitiaki—from holding such a position on any governance body, and that power can be exercised in specific circumstances, such as some of the issues that were raised by members around the issues of fraud, bad faith, and failure to exercise reasonable care. As I said, it is consistent with other pieces of legislation, and I am told that the Companies Act 1993 is absolutely about the issue of disqualification of company directors.

In addition to the right of owners or governance bodies to initiate the cancellation of a governance entity, the Māori Land Court will be authorised to do so if it is satisfied that the governance body is insolvent, the governance body has failed to comply with statutory duties and obligations, or its continuation would materially prejudice the owners. This part will also ensure that Māori incorporations will be able to continue to maintain their own share register, if they wish. This issue was raised by members earlier as well. I think maintaining their own share register will be one of the factors that the shareholders of an existing Māori incorporation will need to consider when they are deciding whether they want their governance body to become a rangatōpū.

So, to come to the hub of it, while this is a relatively small part of the bigger bill, I think it is a further example of the principle of mana motuhake absolutely being recognised within the bill, because it is about those governance entities being able to make decisions for themselves, not anyone else. I hope that is a good general overview about this part of the bill.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Chair. Firstly, thank you to Minister Flavell for his explanation around this part, and I do take his point that a lot of the provisions in this part of the bill are around making the exercise of powers more clear. I would not go so far as to say that it gives them mana motuhake, but it certainly still gives them some room within the letter of the law—both this bill and the other related Acts that governing bodies operate under.

I want to turn the Committee’s attention to clause 207, “Requirements if governance body sells or exchanges parcel of Māori freehold land”, and, in particular, to clause 207(2)(b). I will read it here, and I will explain my thoughts on this. It says: “until the body complies with paragraph (a), do 1 or both of the following: (i) hold the net proceeds in a separate bank account for the benefit of the owners of the land; [or] (ii) invest the net proceeds in 1 or more fixed term deposit products of 1 or more registered banks (as defined by section 2(1) of the Reserve Bank of New Zealand Act 1989) for the benefit of the owners of the land;”.

As I stare at that and as I look at that particular clause, that makes sense, so that the money is not sitting there idly—I get that. I have been part of a Māori land governance body where we actually did have term deposits. I understand that. But my question with regard to this particular part is that it does not set a time frame. It does not set a clear time frame. Are we suggesting that, as clause 207 “Requirements if governance body sells or exchanges parcels of Māori freehold land” says here, in that exchange or sale of the Māori freehold land, then, just as a default, it can put it into a term deposit and, by virtue of the fact that it is a term deposit, it can sit on it for 6 months, 1 year—how long might that term be? And does that perhaps open up too much leeway, if you like, for governing bodies to simply say: “Oh well, we’ll sit on that money and wait for something better.”, when, actually, that flies in contradiction to the requirements of these particular governance bodies in either sales or exchanges of parcels of Māori freehold land, or the requirements for an allocation scheme, as indicated in clause 209?

Like I said, as I stare at that particular clause that makes a bit of sense to me. It reminds me of the failure of a Ngāpuhi settlement to lock away a quantum. If you lock away a quantum you can sit on it and hope that the interest generated will just be of benefit to our people regardless. But that also has a danger, because it does not set a time frame. It does not set a time frame, and I am scared that this particular clause is not clear enough and actually allows governing bodies to say “Oh well, maybe that particular deal did not come through.”, or: “Wow, we were actually hoping that it did not come through, and what we will do is we will take this money and park it into a term deposit, and hope that we can get some interest off it.” We know how term deposits work. Once the money is locked in there, it is locked in there. It is locked in there, or you pay the penalties if you change the terms of that deposit.

I wonder, and I ask the Minister in the chair, Minister Flavell, whether there can be any consideration in this particular clause to actually say that it is a last resort to either park it in a bank account for beneficiaries or to place it in a term deposit—to say that it is a last resort, and that if that course is taken we can actually have a clearer time frame on it. What is stopping the governance bodies simply putting it in a really long term deposit with a bank and sitting on it?

Pita Paraone: What about distributing it to the shareholders?

PEENI HENARE: Or simply distributing it to the shareholders? I am going to get to that very shortly, Mr Paraone. So that is the first question: whether or not we can actually place a bit more restriction or more guidelines on that particular part. Like I said, this makes good commercial sense and decisions to me, and I am not going to rubbish that, but what we will say is to ensure that this does not give, I guess, a backdoor opportunity for governing bodies simply to park it in a term deposit in the hope that they can just make money that way, when actually it is set up differently in that particular clause.

Now to the part that Mr Paraone talks about, in clause 212, “Application of revenues”. Clause 212(2) says “If a governance body decides to pay owners a distribution, the body must keep a record of—” and then it lists there “the name of each owner entitled to receive the distribution”, “the amount to be distributed to each owner”, and “the date on which the distribution will be made”. That makes perfect sense to me. However, I do have one question, and the question is actually around the capacity to get that done—the capacity to get that done. We understand there has been an allocation for the Māori Land Service in the hope that we can tidy up quite a lot of the un-succeeded shares, idle shares, and inactive shareholders and beneficiaries so that we can actually include them. We can hopefully update the database that particular land administration bodies do hold, but I wonder whether in fact this bill and the Minister actually understand the scale of that problem—the actual scale of that problem.

We looked at one particular part on behalf of Ngati Hine Forestry Trust, on a project to update our particular files. Per annum—per annum—that was going to run us just over $100,000 to have a project manager to bring that particular database up to date. That is a serious concern that I have—simply around the capacity—because while I understand we want revenues to be given to our people, little do a lot of beneficiaries understand that for a dollar to be paid out it almost costs that, if not more, in compliance costs on tax and administration. That is something that a lot of beneficiaries actually do not understand. Just because you have $1 million in the bank and you can update your owners distribution list and have it all up to date—if you have $1 million, you actually cannot give out $1 million. You will only be giving, effectively, just under $500,000; the rest goes on tax and administration.

So those are the two questions I have. One is around the capacity, and the other one is around clause 207, “Requirements if governance body sells or exchanges parcel of Māori freehold land”.

House resumed.

Progress reported.

Report adopted.

The House adjourned at 9.56 p.m.