Wednesday, 2 August 2017

WEDNESDAY, 2 AUGUST 2017

WEDNESDAY, 2 AUGUST 2017

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Conservation Policy—Initiatives and Department of Conservation

1. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by all his Government’s policies?

Rt Hon BILL ENGLISH (Prime Minister): Yes, I do, particularly the Family Incomes Package. I want to note with appreciation the Greens’ support for the Family Incomes Package, because on 1 April next year 1.3 million families will be, on average, $26 a week better off, and a small number with high housing costs will be over $100 a week better off.

James Shaw: Why is his Government’s conservation plan to protect only one in five of our most threatened species by 2030 when he could protect them all?

Rt Hon BILL ENGLISH: I do not agree with the member’s characterisation of a strategy that I understand is under discussion. What I can say to the member is that we welcome the Greens’ support for the Predator Free 2050 policy, which will engage communities all around the country, as it is now, in efforts to reduce our predators and, therefore, protect our threatened species of birds.

James Shaw: I seek leave to table the Minister of Conservation’s note to the draft Threatened Species Strategy, where she plans to protect only 600 of the 3,000 threatened species in New Zealand.

Mr SPEAKER: Leave is sought to table that particular note. Is there any objection to it being tabled? There is no objection. [Interruption] Order! I need to hear quite clearly. Was there any objection? There was objection raised; it cannot be tabled.

James Shaw: Why is the Battle for our Birds pest control campaign being fought in only 21 percent of New Zealand’s masting forests this year? How can you fight a war in only one-fifth of our forests?

Rt Hon BILL ENGLISH: The Battle for our Birds was a large investment in the last Budget, and it is my understanding that it is an effort that is on a much greater scale than has been done before. It may not be practical to actually cover the whole of New Zealand in a beech-masting year. The Government is committing more and more resource, but, more importantly, committing it more effectively to the protection of our threatened species.

James Shaw: Why has the Department of Conservation (DOC) lost around 200 front-line rangers under his Government’s watch, had hundreds of millions of dollars cut from its baseline budget, or been forced to close five bases and three field centres?

Rt Hon BILL ENGLISH: I simply do not agree with the member’s descriptions of what is happening with the Department of Conservation, in particular the allegation of large-scale funding reductions. That is simply not true. The Department of Conservation, though, like most of the other Government agencies, has gone through a process of putting together sound long-term plans with clear objectives, and measures of whether it is effectively achieving those things. That has meant some reorganisation on the way through, as you would expect if you were trying to do the job better and better all the time.

David Seymour: Is this Government open to ACT’s sanctuary trust policy, which would bring community-driven, fenced, predator-proof bird sanctuaries to every town and suburb in this country?

Rt Hon BILL ENGLISH: Of course we are open to it. There are a number of such community-driven sanctuaries around the country. Of course, the big opportunity with Predator Free 2050 is the way that it is activating so many communities into various forms of protecting our birdlife, whether it is fenced sanctuaries or the one in five households in some Wellington suburbs, for instance, that are laying traps on their own sections and reducing our predators.

James Shaw: When he said yesterday that he was “happy to budget more for the Department of Conservation where we can see that there are going to be real conservation benefits.”, why is it that after 9 years of his Government, the Department of Conservation is not delivering real conservation benefits?

Rt Hon BILL ENGLISH: I completely disagree with that. I mean, not only is it delivering real conservation benefits now but, for the first time ever, it is getting in place a long-term strategy to continue to lift that effort. So instead of being driven by annual cycles of hoping for funding increases and maybe doing a bit more, it is now taking a long-term view about our natural capital and how it can grow it. I applaud the efforts that it has made to do a better job.

James Shaw: Can he explain why it was that the Department of Conservation once vigorously opposed a Buller plateau coal mine proposal in the early 2000s with a 100-page submission detailing the unique ecosystem that would be destroyed, versus this year, in response to a similar proposal, when the department made an only 1-page submission that “neither supported nor opposed” the plan.

Rt Hon BILL ENGLISH: I am not familiar with the work that was done in the early 2000s, but it sounds like it was thorough and comprehensive, and maybe it did not have to cover all the same ground again. DOC is obliged to follow its statutory directives, and I have no reason to believe it does not do so.

James Shaw: Can he explain why, minutes after the Supreme Court recently ruled that the Ruataniwha Dam conservation land swap was illegal, he said he would just change the law to make it happen?

Rt Hon BILL ENGLISH: The member is not describing that correctly. What I said was that there had been an assumption about what the law was and the Supreme Court has changed what we thought the law was. Looking out into the future, we certainly believe that the idea of net conservation benefit—that is, land swaps that result in more conservation—is probably a good idea. One reason we think it is a good idea is that everyone thought that that was what the law meant for the last 20 or 30 years.

Housing Affordability and Availability—Homeownership and First-home Buyers

2. JACINDA ARDERN (Leader of the Opposition) to the Prime Minister: Does he stand by his statement, “our approach to housing is succeeding”, given that just one in five New Zealanders under 40 own their own home?

Rt Hon BILL ENGLISH (Prime Minister): Yes, although I would note that the member’s figures include 16-, 17-, 18-, and 19-year-olds, where homeownership rates are likely to be pretty low. But the Government’s approach is succeeding by increasing the construction of houses and helping first-home buyers. Help for first-home buyers includes giving them access to their KiwiSaver savings, and HomeStart grants, which have helped 27,000 first-home buyers in the first 2 years. These 27,000 first-home buyers have been able to access around $1 billion from their KiwiSaver accounts and there is sufficient funding available for HomeStart to assist 90,000 first-home buyers over the next 3 years.

Jacinda Ardern: If he is succeeding, why has the homeownership rate fallen every quarter under his Government, for 9 years, according to Statistics New Zealand?

Rt Hon BILL ENGLISH: There is a phenomenon around the developed world, actually—[Interruption] Homeownership rates have fallen slowly across the developed world over the last 25 years. Our task is to ensure—[Interruption]

Mr SPEAKER: Order! I apologise for interrupting the Prime Minister. A reasonable question has been asked by the Leader of the Opposition. I want to hear the answer, even if some of the Leader of the Opposition’s colleagues do not.

Rt Hon BILL ENGLISH: As I said in answer to the first question, we have provided HomeStart grants to 27,000 first-home buyers, and we have enough funding available to assist about another 60,000 first-home buyers. The most important thing that we are doing is getting more houses on the ground faster, so that in the long run people will be able to more readily afford to buy their own home.

Jacinda Ardern: Is it harder for a young person to buy a house today than it was a generation ago?

Rt Hon BILL ENGLISH: Well, we can argue both sides of that. In 2007 when that party left power, interest rates were twice what they are today—10 percent first mortgage rates. Back in the early 1980s, interest rates were 20 percent—20 percent first mortgage rates. So it has always been difficult for first-home buyers. At the moment, the challenge is not so much servicing the debt; it is getting a deposit, and that is why we have the HomeStart scheme, and up to 90,000 New Zealanders will be able to take advantage of that.

David Seymour: How has this Government’s approach to the housing market been affected by the policy settings it inherited?

Rt Hon BILL ENGLISH: The main change that has been made is actually in the planning laws, because the policy settings we inherited were councils’ and legislation that were designed to stop our cities growing. That has now changed. All our councils are trying to accommodate growth, and that is why we have record levels of housing construction and we expect that to continue for several years.

Jacinda Ardern: How can it be easier for this generation of first-home buyers, when an Auckland homebuyer now, on average, needs to save a $200,000 deposit to buy a home?

Rt Hon BILL ENGLISH: I did not say it was easier, I said it has always been difficult, and that is why—

Hon Members: Ha, ha!

Rt Hon BILL ENGLISH: It always has been, because when interest rates were 18 percent, and when interest rates were 10 percent, under the Labour Government, it was hard to service that size of debt. In fact, a lot of households simply could not afford to borrow the amount of money they do if they were on Labour’s interest rates. That is why we have HomeStart in place to assist them with getting the deposit, and also the Welcome Home Loan guarantee.

Jacinda Ardern: Given he himself has said that it is a major problem that only 5 percent of new houses are affordable starter houses, why, after 9 years in Government, is there still this huge shortage of homes to get young people on the property ladder?

Rt Hon BILL ENGLISH: The supply of homes coming on to the market now is more than ever, and that is likely to continue. In the next 3 years New Zealand will build Dunedin, which is our fourth- or fifth-largest city. In the next 3 years New Zealand will build Dunedin, and that is in response to a strong economy, strong population growth, and Kiwis staying home. Of course it is a bit of a challenge, but we are up to dealing with these challenges of success, whereas our opponents just want to shut the country down, to make it easier for them.

Marama Fox: Can the Prime Minister explain whether it is easier or harder for Māori to get a home mortgage since Labour dismantled the Department of Māori Affairs and mainstreamed housing into Housing New Zealand’s hands?

Mr SPEAKER: Order! There is no prime ministerial responsibility for another party’s policies in the past.

Jacinda Ardern: If his Government is indeed building more houses than ever, why is there a shortfall of at least 40,000 homes, particularly in Auckland, that is growing by the day?

Rt Hon BILL ENGLISH: In the first place, we do not accept those estimates about shortfalls. Secondly, the Auckland Council—[Interruption]

Mr SPEAKER: Order! I gave a warning earlier, saying that once questions are asked I have got to hear the answer. Unless I can get some cooperation from some members to my left, I will be asking somebody to leave the Chamber. It is not something I am keen to do, but the level of interjection and the excitement amongst some of the members to my left is just unacceptable and it does not help the decorum of this House.

Rt Hon BILL ENGLISH: There is no doubt that it took Auckland Council a while to understand how successful the New Zealand economy has been and the way that it is keeping at home, in the last 5 years, 150,000 Kiwis who were predicted to leave. But when it passed the Auckland Unitary Plan, just 18 months or 2 years ago, it did then signal it wanted Auckland to grow, and that is exactly what is happening. If we can sustain the current rate of house building there for a number of years, you will see it more possible for young New Zealanders to own their own home.

Jacinda Ardern: Can we agree that the Government has a role to play in helping the next generation on to the housing ladder, and that that requires a Government willing to build affordable starter homes for first-home buyers and a Government willing to lock out speculators, as a Labour Government would do?

Rt Hon BILL ENGLISH: It is not just a matter of agreement; actually, that is what is happening. The Government has announced its own building plan on its own land in Auckland—35,000 houses over the next 10 years. It has put a billion dollars of infrastructure funding on the table, which is going to bring forward 60,000 houses across our fast-growing cities. As I have said, we have the funding in place to assist 60,000 more young New Zealanders into their first home.

Economy—Household Labour Force Survey and Employment

3. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: What reports has he received on the New Zealand economy and the job market?

Hon STEVEN JOYCE (Minister of Finance): The latest household labour force survey, released this morning, showed the unemployment rate dropping to 4.8 percent, compared with 4.9 percent in the March quarter. This is the lowest unemployment rate since before the global financial crisis. It reflects the overall health of the New Zealand economy, which added 76,200 new jobs over the past year and 181,000 over the past 2 years. We currently have the second-highest rate of employment amongst everybody over the age of 15 in the OECD.

Alastair Scott: How is the strong job market helping New Zealand workers?

Hon STEVEN JOYCE: Well, over the past year, businesses’ demand for workers, particularly in the professional services, education, and transport sectors has seen average full-time weekly earnings rise 2.3 percent compared with the same quarter last year. That is the biggest increase since December 2015. To put that in perspective, annual inflation for the June year was 1.7 percent, so wage growth continues to exceed growth in the cost of living.

David Seymour: How is that possible at a time of record mass immigration, when Winston Peters told me that immigrants were taking all our jobs?

Hon STEVEN JOYCE: I think the problem for the member might be his source of material. The good news is that New Zealand has had very strong job growth, and, actually, there are still hundreds and thousands of businesses around the country in all regions of the country looking to add more workers, if they can obtain them in the job market.

Alastair Scott: What opportunities are there for young people in the economy?

Hon STEVEN JOYCE: The household labour force survey showed the proportion of young people who are “neets”—young people not in education, employment, or training—fell to 11.1 percent in the June quarter, down from 12.7 percent in the previous 3 months. If you look at young people unemployed and not in education—15- to 24-year-olds—the number there is 29,000 in the June quarter, down from 32,000 in the previous 3 months. As a proportion of the total age group, that unemployment rate is about 4.35 percent, which is lower than the general population’s unemployment rate of 4.8 percent.

Grant Robertson: In light of that answer, what is his explanation for there being 3,000 more 15- to 24-year-olds not in education, employment, or training compared with this quarter last year?

Hon STEVEN JOYCE: Well, I appreciate that the member has done his swot. I can tell him that it is actually lower than a quarter ago—

Grant Robertson: No, no, no—last year, I asked—last year.

Hon STEVEN JOYCE: Well, the margin of error is 3,000 over the year, but I can tell him that it has dropped significantly. The Labour Party used to say the number of “neets” was 90,000 and it is now seventy-something thousand.

Grant Robertson: I raise a point of order, Mr Speaker. I very clearly asked the member to compare this quarter, this year with the same quarter last year. He did not answer that question.

Mr SPEAKER: No, no—he certainly did address it. The member may have been interjecting at the time so he did not hear. He suggested something along the region that the numbers were within the margin of error. That addresses the question.

Alastair Scott: How does the Government intend to further improve labour market outcomes for workers?

Hon STEVEN JOYCE: The key to improving labour market outcomes and growing jobs is a growing economy. It is only when the economy is growing that businesses have the confidence to invest, hire new workers, and pay higher wages, and we are seeing that now in the New Zealand economy because of the Government’s strong economic plan. We are one of the strongest-performing developed countries since the global financial crisis. We are getting there by keeping spending under control, keeping debt low, and getting it lower, and by investing in the infrastructure the economy needs to thrive—a plan we continue to pursue.

Police Resourcing—Police Stations and Community Policing

4. RON MARK (Deputy Leader—NZ First) to the Minister of Police: Does the closure of police stations meet current Government policy?

Hon ANNE TOLLEY (Minister for Children) on behalf of the Minister of Police: The location of police stations is an operational matter for the Commissioner of Police. However, it is Government policy that the Police should be continually looking at improving the way the public can access police services. Earlier this year, the Police announced the locations of 20 new 24/7 response bases, which means that these stations will be operational 24/7, covering 200,000 more New Zealanders. These steps make police more accessible and more visible so that officers can be where people need them, when they need them, and, of course, Budget 2017 delivered funding for 500 more officers straight to the front line over the next 4 years. But technology is changing how we communicate across the board, and New Zealanders do want to engage with police in different ways, whether it is by text or email or face to face in their own homes or businesses.

Ron Mark: Given the 31 police stations her Government either closed or relocated between 2009 and 2014, and now the closure of 21 police stations around the country, including Warkworth and Wellsford, can she give an assurance to New Zealanders that her Government will not close down any more police stations in the next 12 months?

Hon ANNE TOLLEY: I repeat what I said in the primary question, which is that the location of police stations is an operational matter for the commissioner, so he or she would make those decisions. However, I do also think that the member is mixing up police stations with front counters.

Ron Mark: How will these closures make police more visible in communities, given her statement in February that it is important “knowing there is a nearby police presence at all times”, or fit with her promise that 95 percent of New Zealanders would live within 25 kilometres of a 24/7 police presence? Are we all expected to move house now?

Mr SPEAKER: Order! The last part is unnecessary.

Hon ANNE TOLLEY: As I said in my answer to the primary question, we do expect the Police to continually improve people’s access to its services, but that does not necessarily mean a policeman or policewoman sitting in a police station. Today, people want to communicate with them using technology, they want to have them out on the streets, and, to my knowledge, not many criminals actually come into police stations in order to commit crimes.

Ron Mark: Very good point, Minister. So Minister, with that last comment in mind, if closure is due to her Government’s occupational safety and health law changes, with volunteers not having “necessary training and physical protection measures”—from the criminals who are not going to come in, apparently, now—what does this mean for Community Patrols of New Zealand, or for the Māori wardens or for neighbourhood watch, or for any person who voluntarily assists police in their work? Are they going to get chucked next?

Hon ANNE TOLLEY: The Police does value the services of volunteers, and there are many. However, some front counters have been temporarily closed to the public due to safety concerns while the Police complete a full front-counter safety review.

Ron Mark: Then can the Minister give the communities of Ōrewa, Warkworth, Wellsford, Arrowtown, Whangaparāoa, Taitā, Kilbirnie, or any of the others listed in the announcement, and all of their volunteers, assurance that all of their volunteer stations will be reopened?

Hon ANNE TOLLEY: As I said in the answer to the primary question, that is a decision for the commissioner.

Denis O’Rourke: That’s no answer.

Hon ANNE TOLLEY: That is an operational—well, it is the answer; that is the law, actually. But what I can guarantee is that police services will be maintained in those communities.

Stuart Nash: Is the increase in the amount of P on the streets higher because of a lack of local community-based police over the last 9 years?

Hon ANNE TOLLEY: No.

Māori Development—Māori Housing Network and Homeownership and Homelessness Rates

5. KELVIN DAVIS (Deputy Leader—Labour) to the Minister for Māori Development: Does he believe his Māori Housing Network has received enough funding to succeed?

Hon TE URUROA FLAVELL (Minister for Māori Development): Me whai wāhi au ki te mema, kua eke ki te tuarua o tana Rōpū, ka nui te mihi ki a koe! Hei whakautu i tana pātai, o roto i te pūtea kei Te Kāinga Ora, āe, kai te eke ki ngā taumata ēhara i te mea kai āu te mana, kai Te Kāinga Ora te mana whakamutunga ki te whakatutuki i ngā moemoeā katoa o Te Ao Māori inākē, te nui o ngā hiahia o Te Ao Māori. Āe, he pūtea anō rā he āwhina tērā. Kua kaha nei au ki te toro i taku ringa ki te whakapakari ake, ki te whakarahi ake, ki te whakamomona ake i te pūtea, i tēnei wā, e rua tekau miriona taara ia tau, ka whakatahangia ki te tautoko i ngā whānau, otirā, ngā hapori. Te āhua nei kei te pai engari, ē, kāre he hē o te tono mō ētahi anō.

[I must take an opportunity to extend a huge congratulations to you, the member, on becoming the deputy leader of his party. In terms of responding to his question about the funding within Healthy Homes, yes, the levels are being met because I have the power and Healthy Homes have the final say with regard to meeting all of Māoridom’s aspirations. Yes, there is further funding as well to assist that. I am now able to extend my hand to strengthen and fatten up the funding at this point in time by $20 million each year that can be put aside to support families; in other words communities. It seems to be going well, but there is no harm in applying for more as well.]

Kelvin Davis: How can he say that this National Government is delivering for Māori when the Māori Housing Network has delivered only 11 houses to a code of compliance level?

Hon TE URUROA FLAVELL: Kāre au e whakaae ki tāna i kōrero mai ai i te tīmatanga mai. Kai te kī Te Mema e tekau mā tahi pea ngā whare kua oti, ā, kai te āhua tika tērā engari, me mōhio anō hoki ia, i mua o te paunga o te Hune, o tēnei tau tonu nei, ka eke ki te ono tekau mā toru ngā papa kāinga ka oti i a Kāinga Ora i tēnei tau. Nō reira, koinei he painga anō rā o Te Kāinga Ora.

[I do not agree with what he asserted at the beginning. The member is saying there are 11 houses perhaps that have been completed, and that is somewhat true. But he should know as well that before the end of June of this year, actually, 63 original homes on communal Māori land were completed by Healthy Homes this year. So therefore this is a benefit as well to Healthy Homes.]

Kelvin Davis: So when there are 14,000 homeless Māori, how can he possibly say that that is sufficient?

Hon TE URUROA FLAVELL: Ē, kāre au i kōrero pēra, i kī atu, anei te koha o Te Housing Network ki te pikitia whānui tonu o tēnei kāwanatanga! He wāhi ki au ā-Minita mō ngā take whakawhanake Māori, arā anō ētahi Minita, i tōna mutunga, me whakarongo ki te kōrero a Te Pirimia, koia tērā i whakarārangihia i te āhuatanga o ngā mahi e mahia nei e te kāwanatanga hei āwhina i te hunga e noho nei, e rongo nei i te ngau o te pōhara.

[I did not say it like that. I said: here is the Housing Network gift according the wider picture of this Government. Ministerial wise, I have a part to play in terms of Māori development, but at the end of it all, I must listen to what the Prime Minister is advocating. After all, that is what has been handed down with regard to the circumstances of the actions being carried out by this Government to help those living and experiencing the bite of impoverishment.]

Kelvin Davis: Does he truly believe that this National-led Government, which he is a part of, has delivered and will deliver what is needed to end Māori homelessness and turn around the falling Māori homeownership rate, which is now at 28 percent?

Hon TE URUROA FLAVELL: Ēhara i te mea ko tērā āhuatanga ō nāia tonu nei, i te wā i ngā rā ō mua, i te wā ia Reipa e noho nā hei kāwanatanga kātahi, ka rua, mēnā ka kaha tautoko tana Rōpū i ngā kaupapa pēnei i a Ngāti Paoa, pēnei i a Three Kings, ēnei kaupapa katoa tērā pea, he āwhina nui tērā ki te tuku i ngā whare ki roto i ngā ringa o Te Iwi Māori, kaha tautoko i a Ngāti Paoa, kāre he hē o tērā.

[That is not to say that is the situation at this very moment and in times gone by when Labour was the Government. That is one, and secondly, if his party supported policies like this one that relate to Ngāti Paoa, like Three Kings, all these policies may be a big help in releasing houses into the hands of Māori tribes in terms of supporting Ngāti Paoa. No harm is done in doing that.]

Kelvin Davis: Will he join with me and support Labour’s Māori housing plan, alongside Mereana Marsters and her family, who have been struggling to buy their own home under this Government but described Labour’s plan as “an awesome idea”?

Hon TE URUROA FLAVELL: Aw, Mr Speaker, kei au, kei a mātau kē ō mātau ake whakaaro, kei Te Reipa tōna kaupapa, kei āu, kei Te Kāwanatanga tōna ake kaupapa engari, mēnā ka pātai te pātai, kai te aha tēnei Minita, anei tētahi rārangi kōrero i puta i a Te Matapihi, tētahi rōpū e kaha nei ki te āwhina i te hunga e noho nei, e kimi i ētahi whare.

[Oh shucks, Mr Speaker, we have our own views on that. Labour has its own policy; the Government has its own. But if the question is asked—what is this Minister doing—here is the line of a statement issued by Te Matapihi, an entity who is strong in supporting those who live in homes, and those a seeking housing.]

“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.”

Richard Prosser: I raise a point of order, Mr Speaker. In the light of discussions on the matter last week, and given the lack of translation hardware in the public gallery, I wonder whether you could give some consideration to investigating the possibility of subtitles being broadcast on the Chamber monitors for the benefit of the public in the gallery.

Mr SPEAKER: No. At this stage, for the members of public in the gallery who do not understand Te Reo, I suspect they cannot understand the answer. For those watching TV, they certainly have the transcript for them to understand it. As I said last week to this House, Māori is an official language of this House. It has been used now for nearly a hundred years, and if a member continues to use it, that is completely acceptable to me. I have listened to the questions, I have listened to the answers, and it has not impeded me in any way.

David Seymour: Can the Minister confirm that the percentage of homes that were owner-occupied and occupied by Māori fell from the high 40s to the low 40s between the years of 1999 and 2008?

Hon TE URUROA FLAVELL: Mr Speaker, i tēnei ata i kite au i te pūrongo o Statistics New Zealand. E whakaae ana ki tāna e kōrero nā, āe, i tērā wā, i te wā o Te Reipa, i pērā rawa te ngoikore o tērā kāwanatanga.

[Mr Speaker, I saw Statistics New Zealand’s report this morning, and I agree to what it said then, that at that point in time, at the time of Labour, that Government at that time was really impotent.]

Sudden, Unexpected Death in Infancy—National Prevention Programme

6. Dr PARMJEET PARMAR (National) to the Minister of Health: Can he confirm that the Government has set a goal to reduce Sudden Unexpected Death in Infancy by 86 percent over the next 8 years?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. Today the Government has announced that Hāpai te Hauora will be the provider to deliver the national coordination of sudden, unexpected death in infancy (SUDI) prevention services to support families whose new baby is identified as being at higher risk. To support this new approach, we are investing an extra $2 million into SUDI prevention, taking the annual budget for such initiatives to $5.1 million. This new national programme will help to reduce the overall rate of SUDI by 86 percent, and by 94 percent for Māori, by 2025. This would reduce the number of SUDI deaths from 44 to 6. This Government believes in supporting women and families to have healthy babies who grow up to be healthy kids.

Dr Parmjeet Parmar: How will the national prevention programme target the biggest preventable risks for sudden, unexpected death in infancy?

Hon Dr JONATHAN COLEMAN: A major focus of this programme will be to tackle the risks of being exposed to tobacco smoke during pregnancy by better utilising innovative approaches to reduce smoking, including incentive programmes. We will also be targeting the risks associated with parents and babies sharing a bed by providing safe sleep devices such as wahakura or pēpi-pods to families identified as needing them during the baby’s first year of life. A range of other evidence-based risk and protective factors will also be incorporated into the national prevention programme, including encouraging immunisation, breastfeeding, and sleeping babies on their back. This strengthened national prevention programme will help to protect the 60,000 babies born each year in New Zealand to ensure that they have the best chance for a healthy and long future.

Irrigation—Central Plains Water Irrigation Scheme

7. EUGENIE SAGE (Green) to the Minister for Primary Industries: How close will Canterbury come to the limit for dairy intensification when Stage 2 of the Central Plains Water irrigation scheme is completed?

Hon NATHAN GUY (Minister for Primary Industries): I have no ministerial responsibility for the Canterbury region’s environmental management. This is, of course, the responsibility of Environment Canterbury, which has issued consents for this project. The impacts of farming on the environment are best managed at a regional council level, and, of course, on a catchment-by-catchment basis. However, as a Government we are setting strong requirements for monitoring and improving waterways. We are also strong supporters of irrigation and water storage projects like the Central Plains Water scheme, because they bring both economic and environmental benefits.

Eugenie Sage: Can he confirm that through grants from the Irrigation Acceleration Fund and loans from Crown Irrigation Investments Ltd he has subsidised a predicted increase of 29 percent in nutrient pollution in the Selwyn catchment through his Government’s grants and subsidies to Central Plains Water?

Hon NATHAN GUY: No, I cannot confirm those numbers, because ultimately the Government—we have got two funding programmes. One is a grant allocation to get these programmes up and running, because on average they take 15 years. Then Crown Irrigation Investments Ltd may come in in the end, like it has on stage one—it invested $6.5 million and then got that money returned back to it. Ultimately, it is about farmers making the investment.

Eugenie Sage: Does he agree with the OECD in its 2017 economic survey of New Zealand that “Initiatives that drive large increases in production, such as … government grants and concessional financing for irrigation projects, are potentially in conflict with the need to maintain and improve the quality of the environment.”?

Hon NATHAN GUY: When we came into Government there were not national policy statements to do with improving fresh water. We have done a huge amount. We are now consulting with the farming community about fencing regulations, to exclude the next stage of animals out of waterways on medium and rolling country. I cannot agree with the member’s assertion.

Hon Dr Nick Smith: Can the Minister confirm that water storage is critical to both growing horticultural exports and improving water quality, and can regions like Nelson expect to continue to lead New Zealand with the lowest levels of unemployment if the Waimea dam project is scuttled?

Hon NATHAN GUY: That is a very good question from the local MP. Certainly, I have seen a report that shows that 75 jobs at Waimea would be at risk from a local nursery owner if this proposed water storage scheme does not go ahead. The nursery director said that, like many within the horticulture sector, their livelihood depends on a secure and sustainable water supply. The Waimea project is supported by one of the local MPs there, Damien O’Connor, despite his party being against water storage, and the Greens.

Eugenie Sage: I raise a point of order, Mr Speaker.

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

Mr SPEAKER: Order! I will hear the first point of order, which was raised by Eugenie Sage.

Eugenie Sage: Thank you, Mr Speaker. The Minister said he had no responsibility in terms of Central Plains, and now he is claiming responsibility for the Waimea scheme.

Mr SPEAKER: I do not accept that he is claiming responsibility for the Waimea scheme. The question asked by the Hon Dr Nick Smith was actually two questions, but the second question was genuinely one that I think was raised as the local member. He is certainly entitled to answer that. There was a further point of order?

Hon David Parker: The Minister misrepresented the Labour Party position, which he and his local member know, and he has no responsibility for it so he should be called to order and asked to withdraw that comment.

Mr SPEAKER: The second point is probably right; there is no responsibility from the Minister for any particular Labour member of Parliament. As to the first point, whether in the answer given misrepresentation has occurred, then there is a very clear pathway to follow. Have a look at Standing Order 359.

Hon David Parker: I raise a point of order, Mr Speaker. There are two issues here. If someone deliberately misrepresents, then that is a breach of privilege that has to go through that route. The point about Ministers not being able to purport to answer for other parties is they have no responsibility for it, and their misrepresentation, whether it is deliberate or not and whether it is a breach of privilege or not, is not to be allowed. And that is why I suggest that he should be asked to withdraw.

Mr SPEAKER: No, I am not going to force a withdrawal, and the member is wrong in suggesting that when I mentioned Standing Order 359, that automatically leads to a breach of privilege. There is another process, which has been used once very successfully here: if a Labour member feels that the comment has misrepresented the Labour Party position, I have given very clear guidance as to where to go. Further supplementary—

James Shaw: I raise a point of order, Mr Speaker. As you mentioned, Mr Speaker, the Hon Nick Smith did ask two supplementary questions, and normally when a member of the Opposition does that, you actually point that out and refer the Minister to answer only one of those two questions.

Mr SPEAKER: That is a reasonable point. Often, but not always—and, in fact, if you go back and look at questions asked by Ron Mark today, I think one incorporated three supplementary questions, not two. Very often I invite the Minister to answer either one or other, and sometimes I give them the ability to answer both. On this particular occasion, if you go back and look carefully at the Hansard, as indeed I will, Mr Shaw, you will find that the answer certainly addressed only the second supplementary question.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. Given the Minister’s reference to me, is it OK for me to say that that Minister allows in dangerous animal disease—

Mr SPEAKER: Order! The member will resume his seat. I have given guidance to the member, to Mr Parker. He should accept the same guidance. If the member has been misrepresented or thinks he has, have a look at and get to know Standing Order 359.

Eugenie Sage: Will the Minister commit to ending taxpayer subsidies for think-big irrigation schemes, such as Central Plains Water, that offer no protection from the future effects of climate change, drive dairy intensification, and degrade our rivers and aquifers?

Hon NATHAN GUY: No. I find it, sort of, quite bizarre that the member is talking about climate change, because these projects are about rural resilience to do with droughts. Some talk about droughts as a result of climate change—so, on one hand, here is the Government supporting large regional water storage projects to get across the line, to ultimately provide economic and environmental gains to rural New Zealand, and yet on the other side of the House they are moaning about climate change.

Marama Fox: Given the degradation of the nation’s water bodies since regional councils took control of water management and water allocation systems, how can the Minister state that regional councils are best suited to protecting and managing the environment?

Hon NATHAN GUY: Well, because that is what they have proven to do quite well over time. There are 18 catchments with restrictions to do with nitrates now, and, of course, they are the ones that allocate consents. Seventy-two percent of our rivers and waterways in New Zealand are swimmable, and we have got an aspirational target of seeing that improve over time.

Beneficiaries—3K to Work Grants Scheme and Other Initiatives

8. BARBARA KURIGER (National—Taranaki - King Country) to the Minister for Social Development: What recent announcements has she made regarding supporting New Zealanders off benefits and into work?

Hon ANNE TOLLEY (Minister for Social Development): Today I announced that over 1,200 New Zealanders have taken up the 3K to Work grant and moved off benefits and into sustainable employment. The $3,000 grant, totalling $3.6 million in the last year, is to support people who have an offer of employment to relocate and take up work. The initiative follows the success of the 3K to Christchurch programme and has seen people employed in a variety of sectors right across the country. This Government is focused on helping people into work and congratulates all those who have taken up this opportunity to help themselves and improve their situation.

Barbara Kuriger: How successful has the 3K to Work grants scheme been?

Hon ANNE TOLLEY: It has been very successful. As we saw with 3K to Christchurch, the vast majority of people who move to take up employment stay in work long term. In the year to 30 June 2017, of the 1,203 people who received grants, over 90 percent of them remained in employment and off benefits for longer than 91 days. It is fantastic news, as not only are these people—

Hon Member: 90 days—come on!

Hon ANNE TOLLEY: —getting the skills and experience—91 days—that are essential to staying off a benefit long term, the programme is contributing to New Zealand businesses and the overall economy by moving people into key industries such as construction, agriculture, forestry, and fishing.

Barbara Kuriger: In what other ways is the Government helping to support beneficiaries into work?

Hon ANNE TOLLEY: Along with our usual supports, such as Flexi-wage, training allowances, assistance for study costs, and in-work support, Budget 2017 invests $64.4 million in new operating funding to help people move off benefits and into work. This includes an extra $19.5 million to expand the intensive client support to help people achieve sustainable education, training, or employment outcomes. This Government is absolutely committed to breaking the cycle of welfare dependency and helping people live independent and successful lives. We have already had tremendous success, with over 61,000 fewer children now living in benefit-dependent households and the figures out today showing unemployment at 4.8 percent, the lowest it has been since before the global financial crisis.

Health, Ministry—Director-General of Health and Financial Management

9. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Health: What responsibility does he take as Minister of Health for his Director-General of Health, who “probably overreached a bit” as said by him in the House yesterday?

Hon Dr JONATHAN COLEMAN (Minister of Health): The responsibilities of Ministers and chief executives, and the relationship between them, are well established. Under the State Sector Act, Public Service chief executives are employed by the State Services Commissioner, and the commissioner is responsible for managing their performance in this role. The role of Ministers is set out in the Cabinet Manual, which states at paragraph 3.7: “Ministers decide both the direction of and the priorities for their departments. They are generally not involved in their departments’ day-to-day operations.” The Cabinet Manual applies to the relationship between all Ministers and the Public Service, and, of course, to my relationship as Minister of Health with Mr Chuah as the Director-General of Health.

Dr David Clark: Does he think it is acceptable that the Director-General of Health, the person in charge of his ministry, does the opposite of what he wanted by telling district health board (DHB) leaders that they could keep the $38 million in funding that they had been incorrectly allocated by his ministry?

Hon Dr JONATHAN COLEMAN: We dealt with this yesterday, and what I said at the time is that that allocation was a fraction of less than 1 percent of the total budget and Mr Chuah clearly felt that he could manage that within the $16.8 billion that health receives each year. As I said yesterday, it was a bit of an overreach, but you have got to look at the wider picture, which is that Mr Chuah is involved in delivering more and more health services, hundreds of which have improved over the system, delivering 7,000 more doctors, 50,000 more operations, and 150,000 more first specialist assessments.

Dr David Clark: Has he asked his Director-General of Health why he told DHBs that they could keep the $38 million wrongly allocated?

Hon Dr JONATHAN COLEMAN: Well, the focus has actually been on making sure that the error was corrected, and that was my express decision that that should happen.

Grant Robertson: I raise a point of order, Mr Speaker. That was a very specific question, and I do not believe it was addressed.

Mr SPEAKER: On this occasion, I will allow the question to be repeated.

Dr David Clark: Has he asked his Director-General of Health why he told DHBs that they could keep the $38 million wrongly allocated?

Hon Dr JONATHAN COLEMAN: Actually, all the reports on this have been purely anecdotal, and, quite frankly, I have not bothered having that conversation with him because I have been very focused on making sure that the error is corrected, which it has been. You have got to remember it is a fraction of less than 1 percent of the total budget. I would refer the member over there to the Estimates to understand how they—

Mr SPEAKER: No, the question has now definitely been answered.

Dr David Clark: Does he take responsibility for the Ministry of Health’s failed proposed mental health Budget 2017 package, which was described by Treasury as “assemblage of … bids … without an understanding of the mental health population [or] workforce,”?

Hon Dr JONATHAN COLEMAN: Well, the member knows very well that the Government allocated $224 million to mental health in the Budget, and that is going to provide a wide range of services that will benefit New Zealanders. I mean, the spending on mental health has increased from $1.3 billion to $1.4 billion over our time in Government, and there has been a decrease in waiting times, there are an extra 150 psychiatrists, an extra 600 mental health nurses, and a general focus on improving access to services.

Dr David Clark: What responsibility does he take for the findings of the soon-to-be-released Deloitte report on his ministry’s $38 million funding stuff-up to DHBs, in light of the fact that it follows another major botch-up worth $18 million for its head office?

Hon Dr JONATHAN COLEMAN: Well, I think Parliament has moved past that type of language. We are into positivity now. What I can say is that the Deloitte report is being released this afternoon. The member can access one straight after question time, so he should race up to his office. What he will find is there are some very clear recommendations there around the Budget process for 2018, which I know the member will be very eager to read.

Dr David Clark: I raise a point of order, Mr Speaker. The question was: “What responsibility does he take for the findings …?”.

Mr SPEAKER: No, no, that was not the question. It was far more emotive than that, and the answer addressed that.

Dr David Clark: What responsibility will he take for the findings?

Hon Dr JONATHAN COLEMAN: Look, the findings are actually related to the ministry’s budget process, and Mr Chuah has already taken responsibility for that.

Question time interrupted.

Points of Order

Written Questions—Use of Interim Answers

SUE MORONEY (Labour): I raise a point of order, Mr Speaker. I raise a point of order with regard to your ruling about interim replies, on 26 July, when you said: “Every endeavour must be made to provide a full reply within the period specified in Standing Orders.” On 24 July I asked a question of the Minister of Health: “When was the Minister first made aware of concerns held by the Waikato DHB about CEO Nigel Murray’s expenses?”. That question was due yesterday, and the Minister’s office gave me an interim reply. I have contacted the Minister’s office subsequently and asked for that question, along with a range of others, to be addressed. As of right now, I still have not had a reply to a question that is—

Mr SPEAKER: Order! I have heard enough, and I will look into the matter. But I would be grateful if members, if they have difficulties around receiving answers to written questions—I advise them, as, indeed, Sue Moroney advises that she has in this case, to take it up with the Minister’s office first, and then, certainly, take it up with my office or through the Office of the Clerk to me. I will look at it. It is probably not helpful to raise it on the floor of the House as a point of order.

Question time resumed.

Oral Questions

Questions to Ministers

Question No. 9 to Minister

MAHESH BINDRA (NZ First): I raise a point of order, Mr Speaker. I seek your guidance to find out what the criteria are for unparliamentary words such as “stuff-up”. I just noticed that Dr Clark used the words “stuff-up” and you did not stop him, whereas when I used those words during question time, when asking a question of the Hon Sam Lotu-Iiga, you stopped me immediately and reprimanded me.

Mr SPEAKER: As I have said many times, at the end the day, I think the members themselves use language for which they are responsible, and they will be judged by the public of New Zealand for the language they use. Having said that, there are times when, depending on the context in which some words are used and the decorum of the House at the time, I may then intervene. On this occasion, I did not intervene. I think Mr Clark can justify whether, in his own mind, he should have used those words—that is his business.

Biosecurity Management—Biosecurity and Border Processes and Import Health Standards

10. RICHARD PROSSER (NZ First) to the Minister for Primary Industries: Does he believe that New Zealand has robust biosecurity in light of Mycoplasma bovis and other recent incursions?

Hon NATHAN GUY (Minister for Primary Industries): Yes, I do. This Government has placed a huge focus on biosecurity, and overall funding is now at a record high of $248 million per year. Even if we completely closed the borders, biosecurity would not be zero-risk; therefore, responding to incursions is an expected part of our overall biosecurity system. On average, the overall number of incursions per year has been consistent with previous years going back to 2000. This is despite strongly increasing passenger and cargo volumes.

Richard Prosser: Does his belief that New Zealand has robust biosecurity and border processes extend to the import health standards for bovine semen and embryos; if not, why not?

Hon NATHAN GUY: Our import health standards are a legal document, and, indeed, there is an investigation under way to try to determine how M. bovis made its way to New Zealand. I would prefer not to speculate; I would prefer that the investigation be allowed to get on with the good job that I am sure it will do.

Richard Prosser: How does his belief that New Zealand has robust biosecurity, border processes, and import health standards square with Mycoplasma bovis, myrtle rust being found almost exclusively in nurseries, and pea weevil and velvet leaf being present in beet seeds that were certified weed-free?

Hon NATHAN GUY: We have got a multilayered biosecurity system. To do with myrtle rust—this is wind-borne. New Zealand First seems to think that a passenger brought it into New Zealand. The reality is that if it has a look at the National Institute of Water and Atmospheric Research’s wind-plume modelling, there are six wind events this year with a very high probability of myrtle rust being carried across the Tasman and reaching New Zealand.

Richard Prosser: How does he reconcile his belief in New Zealand’s robust biosecurity and border processes with the fact that there have been over 150 biosecurity incursions since the election in 2008—mushroom compost containing animal manure being imported from Europe, and now, of all things, mud from overseas being imported into Rotorua?

Hon NATHAN GUY: I was delighted to see in Budget 2017 that $18.4 million has been allocated to further strengthen the biosecurity system. That will allow us to review the most at-risk import health standards. Actually, if New Zealand First and Labour want to get serious about biosecurity, they will need to front up in the campaign to farmers and woolsheds and cowsheds, up and down the country, and say why they did not vote for the border clearance levy. That is a huge embarrassment for them when they talk about funding.

Richard Prosser: How can biosecurity be robust when not one New Zealand airport has ever achieved MPI’s compliance targets, and while this Government’s much-vaunted National Animal Identification and Tracing project for tracking livestock movements is only now being initiated, 10 days after Mycoplasma bovis was first confirmed?

Hon NATHAN GUY: If the member wants to refer to the investments that this Government has made, just in recent times, to do with the biosecurity system, I just want to remind him: 50 new biosecurity staff, 20 new dog detector teams, new X-ray machines—which means we can do more at the border—and the border clearance levy, which means we have got more funding. With increased tourism numbers, we have now got more funding to do more and provide more services on the border. We are doing a huge amount. We have got 14 Government industry agreements, whereby industry has signed up and is partnering with the Government on preparedness and response. There is a huge amount happening, and I am actually very proud of the fact that this Government has achieved a huge amount in terms of strengthening the overall biosecurity system.

Regional Culture and Heritage Fund—Cultural Facilities Funding

11. STUART SMITH (National—Kaikōura) to the Minister for Arts, Culture and Heritage: What announcements has she made on support for cultural facilities through the Regional Culture and Heritage Fund?

Hon MAGGIE BARRY (Minister for Arts, Culture and Heritage): In the last couple of months I have had the privilege of announcing more than $10 million for projects supporting projects in Whangarei, Hastings, and Foxton, from the Regional Culture and Heritage Fund (RCHF), with more to come. Most recently I announced a $900,000 grant to complete the fit out of the ASB Theatre complex in Blenheim, thanks, in part, to the advocacy of their local member. But specifically, it was for the completion of the Anderson Theatre. The RCHF exists to support significant regional projects, such as the ASB, which has the potential to be a major cultural and economic asset for Blenheim and Marlborough, attracting both local and international artists.

Stuart Smith: What announcement has she made about funding from the RCHF for Rakiura Stewart Island?

Hon MAGGIE BARRY: In the last adjournment, the member for Invercargill and I beat the weather to visit Oban, and announce more than $1 million from the RCHF for a complete rebuild of the Rakiura Museum. The Stewart Island community has done well to access other funding from the local council and philanthropic and community sources, and I was very pleased that the Government was able to cover the rest of the cost of the project. It is time Stewart Island had the appropriate facilities to display its extensive heritage collections for islanders and visitors to enjoy, and it will be a fantastic asset for the southernmost community.

Transport, Auckland—Congestion

12. MICHAEL WOOD (Labour—Mt Roskill) to the Minister of Transport: Does he think after nine years of a National-led Government that traffic congestion in Auckland is getting better or worse when the TomTom index shows that Auckland now has more traffic congestion than Hong Kong, and that congestion has almost doubled since 2014?

Hon SIMON BRIDGES (Minister of Transport): I acknowledge that congestion has been a growing issue for Auckland, because its economy and population has been growing strongly. Auckland, like other rapidly growing cities, is experiencing increasing pressure on its transport network. The member may be interested to know that Auckland is growing at twice the rate of Hong Kong at 1.5 percent a year, compared with 0.8 percent. However, significant improvements in travel times are being experienced by Aucklanders very recently, as much-needed infrastructure is coming on. Two recent examples of projects delivering a real difference for Aucklanders are the Southern Motorway improvements, which have cut up to 23 minutes off commute times, and the impressive Waterview tunnel, which is delivering equally impressive, and in some cases more impressive, travel-time savings. With the pipeline of work this Government has under way, Aucklanders have, and will continue to notice, improvements to their travel times.

Michael Wood: Why after 9 years in Government has Auckland traffic congestion actually got four to five times worse since 2013, according to research released today by the Employers and Manufacturers Association, Infrastructure New Zealand, Auckland Airport, Ports of Auckland, and the National Road Carriers?

Hon SIMON BRIDGES: Really, I have said the main points here, which are that I accept that congestion has been a real growing issue for a growing city, our city of Auckland. But, actually, very recently we are seeing very meaningful improvements in terms of congestion. Actually, a 7 percent reduction in congestion on the Southern and Northern Motorways, something like a 14 to 21 percent reduction in travel times on the arterials such as Mount Eden and Dominion Roads, as a result of Waterview. So as we get projects that have taken a long time to come to fruition, like new lanes on the Southern Motorway and Northern Motorway coming, and Waterview, that is actually reducing congestion.

Michael Wood: How after 9 years in Government can he justify the $1.3 billion of annual productivity loss caused by gridlock in Auckland, and is this not evidence that National is holding back Auckland’s growth and prosperity?

Hon SIMON BRIDGES: Well, I agree with the thesis of the report. I mean, no one wants to see congestion. That is why we have such an ambitious programme, and as those projects come on—

Hon Members: Ha, ha!

Hon SIMON BRIDGES: —well, they laugh, but, actually, hundreds of thousands of Aucklanders know that the Southern Motorway improvement and that the Waterview tunnel have delivered very real time and reliability benefits for them. Let me give a couple of examples—Papakura to the CBD via State Highway 1 used to take something like 39 to 86 minutes; it now takes around 35 minutes. The airport to CBD via Manukau Road used to take 40 to 49 minutes; now with Waterview, it takes 32 minutes.

Mr SPEAKER: Bring the answer to a conclusion.

Hon SIMON BRIDGES: There are some very strong improvements happening in terms of congestion.

David Seymour: Why has the Minister been so weak on introducing congestion pricing that he now finds himself to the left of Phil Goff, who wants to bring it in sooner?

Hon SIMON BRIDGES: I do not accept that. If you look at what we have done, we have had the Auckland Transport Alignment Project, which has made a very clear recommendation around investigating pricing, and that is exactly what we are doing.

Michael Wood: Given his acknowledgment today that the congestion problem in Auckland is growing, why has he not learnt the lessons of the Northern Busway, built by Labour, that if you give people modern, efficient public transport many of them will leave their cars at home, which means moving more people and freight around our city freely?

Hon SIMON BRIDGES: For one thing it takes all manner of forms of transport, including public transport, but, actually, if the member had listened to what I said, I said that congestion has increased, but actually very recently, as we have seen big projects start—new laning on the Southern Motorway, and the Waterview tunnel—in fact we have seen congestion decrease quite meaningfully, both in terms of the State highway network and also in terms of the arterial roads. Aucklanders know—they are emailing, they are writing, they are on talkback, in their hundreds of thousands—that they are getting quicker travel times and much, much more reliable travel times.

Michael Wood: Why can the Minister not see that Aucklanders want a Government that understands their city and is more ambitious for it, rather than one that says it will think about a light rail connection to the airport in 30 years’ time?

Hon SIMON BRIDGES: It is lucky it has got such a Government. This is a Government that invests two-thirds of all transport spending in Auckland over and above what the council is doing. It has a very ambitious programme, and it continues to show more ambition.

Points of Order

Written Questions—Use of Interim Answers

RON MARK (Deputy Leader—NZ First): I raise a point of order, Mr Speaker. Further to the point of order from Sue Moroney earlier on, I have received advice from our office on an issue that you addressed last week regarding the short amount of time left to lodge written questions and have them answered in a timely fashion.

We notified your office over Minister Bennett’s overdue answer, where we do not have a time frame for a monthly cost for robots inside Pike River, and we complained over Minister Flavell limiting his answers to only his tenure—an experience we do not think is unique across the Opposition benches—

Mr SPEAKER: Order! I am going to interrupt the member. As I said to Sue Moroney, bring these matters to my office at the end of question time and I will look into them.

General Debate

General Debate

JACINDA ARDERN (Leader of the Opposition): I move, That the House take note of miscellaneous business. They say a week is a long time in politics. I can tell you that just 24 hours can feel like a very long time in politics too. Imagine then what can be done, what can be changed, what can be achieved in just over 50 days.

I did not come into politics to be an Opposition member of Parliament. In fact, every single person sitting behind me, sitting beside me, did not campaign to be in Opposition. We are here because of our inherent belief that New Zealand can be better than this. Every single one of our Labour team will have a story to tell about when they realised this simple fact—in fact, they will have many stories to tell, and daily reminders of that simple fact.

I have often spoken about my very short time living in a small forestry town plagued by unemployment and plagued by poverty. But when you are a child you do not see politics. You see unfairness. When you are searching for your first home or facing an increase in your rent, you probably do not see politics. You just see a lack of hope. When your bills outstrip your income again and again, and you are looking for ways to bridge the gap, you probably do not see politics. You just see the next countdown to another pay day.

And yet all of these challenges can be different. No one is asking politicians to provide a silver bullet, but they are asking for ideas that give them hope and that give them change. Our vision is for a better, fairer future for New Zealand—a place where everyone, no matter where they live or what their income, has the best education and the opportunity to flourish. That concept is as true now as it was when Peter Fraser stood and said that “all persons, whatever their level of ability, whether they live in town or country, have a right as citizens to a free education of the kind for which they are best fitted and to the fullest extent of their powers.”

Our education policy does this, and I am proud of the work that our education spokesperson, Chris Hipkins, has done on it. It is a policy that stops treating schools like factories and children like products that need to be standardised, tested, and dispatched. It acknowledges that a child’s creativity peaks at 7 and fosters that creativity.

Our vision is for a place where everyone who has the ability has access to decent work, and not just for the work that presents itself now, but for the jobs of tomorrow. That means investing in lifelong learning, starting with giving work and hope to every one of the more than 70,000 young people not in education, training, or employment; that means a country that calls a home a right; that does not sell State houses, but builds them; that recognises market failure and steps in to build the stock we need; that sees homeownership falling and sees that the next generation risk even greater inequality, as those who have become those who inherit, and does something about it.

It is a place where small to medium enterprises thrive. They are our job creators, our innovators, and whether it is our R & D tax credit, our plans to incentivise investment, our focus on building the talent they need, or just our belief that they deserve a level playing field and for multinationals to pay their fair share of tax, just like they do, small and medium sized enterprises are key to New Zealand’s future. Our future is for a better, fairer future for New Zealand.

Finally, we are the people’s party, and the people of New Zealand have an inherent connection to the land in which they live. Governments have been latecomers to something Māori have always known. We can be world leaders on environmental challenges of tomorrow. Let us not just legislate our climate targets; let us use them to innovate to our advantage. We are young. We are smart. We are a beautiful country. It is time, though, to make it even better. It is time for Labour.

Hon STEVEN JOYCE (Minister of Finance): Can I begin by congratulating the previous speaker, Jacinda Ardern, on her ascension to the leadership of her party, and can I congratulate her on her speech, which was positively Little-esque. It was positively Little-esque. She is going to be, she says, relentlessly positive about New Zealand. Well, I think she is probably about 30 percent of the way there going on that speech. She obviously has a lot of work to do over the next 5 and a bit weeks until the polls open. But I note she is out there, she is doing it, and she is already talking about changing policies—except all she has done so far is say that she will not be interested in a fresh approach. I can see why, because the two policies she has namechecked this afternoon are, firstly, R & D tax credits, which have been Labour’s policy for roughly 2 millennia, and the education policy that was written in 2011 or 2014, which is apparently still the best possible education policy in 2017. So the fresh approach has quite clearly gone.

I wonder this afternoon whether I could offer Jacinda Ardern a little bit of political advice in the interests of bipartisanship. I think that is important. I have helped Annette King over the years. I have made Annette everything she is today. I thought I would offer a little bit of advice.

The first bit of advice is to watch Grant—watch Grant. A lot of leaders have made the mistake of not watching Grant. I suggests she watches Grant, because, amongst many other things, he will want to spend the surplus several times between now and 23 September. I would suggest she watches Phil Twyford, because he has got a bit of a tendency to scapegoat parts of our society, which is not exactly relentless positivity—not exactly relentless positivity.

Can I suggest she watches David Parker, who wants to take a scorched earth policy to New Zealand’s regions with his approach to water and climate change. Can I suggest she watches Metiria and the Greens, who are interested only in removing all obligations from people receiving a benefit. I suggest she does that. Can I also suggest she watches Winston, because it is always a good idea to watch Winston when you are in the Opposition, because he thinks he is the Leader of the Opposition. He especially thinks he is the Leader of the Opposition as of yesterday, so I suggest she watches that.

But I would like to encourage her in her relentless positivity, and I would like to encourage her to get out and have a look around New Zealand. She talked about the time when she was growing up, when times were tough in rural New Zealand, and actually she should go out now and have a look because, actually, rural and regional New Zealand are in really good shape. Rural and regional New Zealand are growing strongly. She should go to Hawke’s Bay and see all the horticulturalists growing their businesses because of this Government’s approach to trade. She should go to Ōāmaru in North Otago, which is growing the fastest it has in 25 years. She should go all around the country.

She should go to Dunedin and see the tech sector growing in Dunedin. She should go to Auckland, which this new Opposition spokesman at the back said was struggling. She should go and drive through the Waterview tunnel to her electorate and see the progress that is being made there. Above all, she should go to west Auckland and South Auckland where many New Zealand families will be getting the benefits of the family incomes tax package from this Budget on 1 April of next year.

All of those things are positive things that are happening in this country because we are taking an open and connected view of the world. Kiwis are encouraged to get out and win on the world stage. New Zealanders are embracing that. The country is growing strongly. The Labour Party members are still denying it and that is their problem. They can change leader as often as they like, but if they do not see New Zealand companies growing, if they do not see jobs growing, if they do not see incomes growing, if they do not see families benefiting from this Government’s approach to getting the books to balance and investing in infrastructure and services, then they will continue to languish because they are completely disconnected from the reality of most New Zealanders around the country in regional New Zealand, in our big cities, and that is why New Zealanders are supporting this Government—because it is growing New Zealand and delivering for New Zealanders.

Mr SPEAKER: Order! I was reluctant to interrupt the member through his speech because he was certainly battering against a considerable amount of interjection, but throughout his speech he frequently referred to members by their Christian name only. I have asked him not to do that in the past. He needs to watch that in the future; it will lead to disorder.

RON MARK (Deputy Leader—NZ First): Well, it is really interesting is it not, listening to Mr Joyce’s speech: “Go to west Auckland, go here, go there, go everywhere.” Mr Joyce, if the rural New Zealanders are doing exactly what you think they are doing—prospering and doing well—we think you should go to Woodville, Masterton, Dannevirke, Porangahau, and Pongaroa. I tell you what rural New Zealand will tell you, Mr Joyce; they will tell you to go to hell, because it is not wonderful out there. It is tough, and other places are not wonderful.

It is not wonderful within the immigration service is it? It is not wonderful on the Government benches when it comes to looking at immigration. Yesterday the Rt Hon Winston Peters was highlighting to this House that in October last year Ministry of Business, Innovation and Employment—Steven Joyce’s little birth child—investigator Theodore Ashton found that thousands of approved residence applications prior to October 2016 could be in error because of fraudulent English testing—fraud. In November 2015 Nigel Bickle, deputy chief executive of Immigration New Zealand, said that on a test sample of—get this, listen up Government—95 out of 98 visa applications, applicants were not asked for any evidence that they met the minimum English proficiency test, and it goes on and on.

But wait, there is more. When we come back to this question of unskilled migrant workers, what did we see the Government do last week? It announced a revamp—it announced the tightening-up and changes—but then last week it backtracked on changing immigration rules to rein in immigration numbers as New Zealand’s net migration numbers continued to skyrocket to 73,000 in the last year. So the Government announced that $49,000 of income would be the threshold—and then it cut it down to $41,000. Why? To retain an extra 6,000 to 7,000 unskilled migrant workers. So the Government is tinkering around the edges, trying to deal with the problem of net migration, and it announces a sensible policy, and then—on the back of some pressure from employer lobby groups, which want to prop up unprofitable businesses and want to continue to exploit cheap migrant labour—it does a backflip.

Well, we know, in New Zealand First, that this has been going on for years and years and years under this Government, especially in the area of low-skilled jobs such as those in hospitality, restaurants, cafes, retail, rest homes, labouring, and fruit picking. I have got to tell you, just last week I had anecdotal evidence of a courier operation in Taupō where a low-skilled migrant is working for $3 an hour, but, nice and neatly, using the employment laws to circumvent that by having a contract—on the promise of residency down the line. This Government has been told time and time and time again of these corrupt and fraudulent practices and—dare we say it—abuse of migrant workers. But it still continues to ignore it.

So what is New Zealand First telling you we are going to do after the election, when we are in Government? We will slash unskilled temporary migrant workers—currently running at 185,000. We will reinstate that $41,000 threshold. Extending work rights to student visas, 165,000 of them, and the associated rorting of the international school system being used as a de facto unskilled work visa and pathway to residency—we will smash that. Family reunion for unskilled workers—we will slash that. Restrictions on parent advisory category—we will do that. And the Government’s own reports that show that family sponsors have been abandoning their elderly to burden New Zealand’s very generous health and welfare system—oh, we are going to deal to that as well.

It is absolutely appalling that this Government continues to preside over immigration policy and immigration rules that are killing this country and, worst of all, allowing migrant workers to be abused. That is not going to continue.

Hon AMY ADAMS (Minister of Justice): I did want to begin my contribution to the general debate by acknowledging and congratulating the MP for Mt Albert on taking over leadership of the Labour Party. I must say that I look forward to the day when the gender of a person taking on a role like that stops being a point of interest in the discussion and whether it is a man or a woman ceases to be relevant and, actually, the interest is in the quality of the person taking on the role.

This party—our party; the National Party—over the last weekend put out our party list for the 2017 election. I am incredibly proud of that list. It is the most diverse party list that we have ever put out ahead of an election. It represents people from all around New Zealand, from all walks of life, from so many different ethnicities, and from so many different backgrounds. The reason that we see so many New Zealanders of all different types wanting to be part of this team is that they know and they see that we are a Government and we are a party that came here to represent and deliver for all New Zealanders.

When you come to this place, you know that making a change for New Zealanders is not going to be easy. It is going to require some issues that are incredibly challenging—there are not easy options simply waiting out there to be taken. These are hard issues that we tackle every day. They are challenging, they are tough, and they bring with them incredibly robust debate. Making progress on those issues takes a number of things. It takes, obviously, a group of people who are dedicated, who are committed, who are hard-working, who have a clear vision, who know what they want for New Zealand, and who are relentless in pushing for those outcomes for New Zealanders. You have got to have a strong belief in this country, you have to have a belief in its people, and you have to have an absolute determination to deliver more and more for them.

We want to deliver jobs. We want to deliver better incomes. We want to deliver opportunities for every single New Zealander. We want the best health. We want the best education. We want the best connectivity. We want our streets to be safe and our communities to be healthy. This has to be a country that is a good place to do business, where people want to come and invest. We want, as I say, our communities to be good places to raise children.

All of that requires a number of things. It absolutely requires, and is underpinned by, a strong economy. This Government knows that it is not Governments that create jobs and raise incomes and pay taxes to fund all the things we do; it is hard-working New Zealanders who have the confidence to invest. That is what this Government understands.

There is one other thing that that absolutely requires. It requires strong, stable leadership that remains focused every single day on getting the task done.

Every day that you spend in Government—

Iain Lees-Galloway: New Zealand’s answer to Theresa May.

Hon AMY ADAMS: —looking internally, fighting with yourselves, fighting with other parties, working out how you are going to arrange yourself is a day you are not focused on the outcomes for New Zealanders.

I can tell you that this is a party and a Government that, every day, comes here, not looking inward and worrying about how we sort ourselves out and not in spats with our support partners—and name-calling. This is a Government that focuses instead on getting the things done that New Zealanders need.

It is very simple, really. If you cannot manage yourself, you cannot manage a country. You cannot run your own system and work with other parties in this House cooperatively and constructively. Yes, you can disagree, but you can do it in a way that is respectful and mana-enhancing and that advances the debate. That is what delivers for the people of New Zealand—not infighting, not division, and not spending all of your energy on your own internal struggles.

What has that approach of strong, stable, unified, hard-working support meant for this country? Well, I will tell you what that has meant. It has meant an economy that is growing at 3 percent, which is one of the best growth rates in the OECD, and that has meant more jobs. We have had an increase of more than 200,000 jobs, and the average wage is now up to nearly $60,000 a year. That is an incredible increase. It means families in New Zealand are better able to afford the cost of living. We have seen those real wage increases far outstripping inflation. This is not some inflation-fuelled increase in wages; this is more money for New Zealanders.

Of course, just in this year’s Budget you saw us pass the Family Incomes Package, which, interestingly enough, Labour opposed, even though it put more money into the pockets of some of our most vulnerable New Zealanders. Labour, when push came to shove, did not want to support that because it did not suit its political agenda of opposing the Government, and that showed more than anything that for those members it was a case of the politics. If the politics means that they should oppose it, even though it helps New Zealanders, that is what they would do. Well, not this Government. We are focused on delivering for New Zealanders. We have delivered for New Zealanders over the time that we have been in Government, and we will continue to do it, on the basis of a strong, stable leadership of a strong, stable team.

MARAMA DAVIDSON (Green): I hosted a housing and homelessness meeting in Manurewa on Monday night. We had a great turnout of locals on a cold night in a community that does not trust our current political processes. The locals are asking where all their emergency funding has gone—the $300 million that Minister Paula Bennett was so proud of when she announced it. It has not really made it out to my ’hood.

There has been a sharp increase in the number of people whom our local community is having to step up and feed and clothe. A man died on the steps of our local church less than 3 weeks ago. We are talking about Manurewa here. People are having trouble accessing help for their medical needs so that they can heal sores and preventable illnesses—illnesses that should not be a part of our country today. The locals are calling for a night cafe—

Hon Member: It’s free.

MARAMA DAVIDSON: —at the least, where people can come and have a warm place to be, and have food and drink and somewhere to put their blankets—a place to be welcomed and humanised. Although my colleague points out that there are free medical centres, well, it is not happening in Manurewa. So what is going wrong there? Medical centres are still charging. I want to acknowledge local community worker Debbie Monroe, who for 4 years has been having to step up and feed and clothe and befriend the people sleeping rough on our streets because of this Government’s failure to provide adequate housing.

On Sunday night I visited a camping ground in west Auckland and I saw some things, including a family of three living in a cabin room less than half the size of the average MP’s office in this precinct.

Hon Maggie Barry: Stop shouting.

MARAMA DAVIDSON: I will shout. I will shout about this. I will shout about a family of three living in a cabin less than half the size of what you and I work in every single day. The father went to pains to tell me that he came from a background of running a business, having capital and machinery, and owning land, and through life situations, he has found himself living in this undignified situation. He has refused to ask for help from anybody or from the Government because he is embarrassed and ashamed of having to do that.

That shame is the shame that has happened to this country. It has poisoned our country for too long. This is the shame that has insisted that poor people are to blame for their misfortune and that they are undeserving of our support. While the Minister does not want me to shout, I am feeling their voices and I am trying to make them heard. So I will stand in this House and talk about the things I know and see, and I am sorry if people have a problem with how loudly I do it.

Whatever response this Government has about whatever the good things are that are happening, it cannot spin away what is also happening. This is not our country. We know this Government has done this. It has created these harmful, undignified situations for our people. It is talking about being stable, but this is not stability. It is talking about belief. Can we at least agree to believe that there is a housing crisis? Can we come together in this House and even say the words “housing crisis”?

Can we withstand the discomfort when our own privilege meets us squarely in the eyes while we listen to our people, our citizens, tell us their stories from the shabby, dark truth of a gross caravan? Can we stand in the Work and Income lines, which bend around two corners, and can we be leaders and stand for the fact that these are just ordinary people who are trying to do the best they can with very little? Can we take the leadership of Metiria Turei and offer the vision and the plans to fix this?

I ask you all, if you are not prepared to stand to fix this, then what are you doing here? Thank you.

Hon ANNE TOLLEY (Minister for Children): I want to begin today by offering my congratulations to the new Labour team, to the new leader, and to the new deputy, and I wish them well, because they are going to need it. They are going to need it.

Chris Hipkins: I don’t think you really do.

Hon ANNE TOLLEY: Ah yes, I do—yes, I do. I wish them all the luck in the world, because they are going to need it, because the problem is not leadership; it is about taking to the country with confidence and with a plan that is shown to be working, and that is what Labour has not done. It has not done it.

It has not got a credible plan, whereas on this side of the House, we know—we have seen strong, stable Government through some of the toughest times that this country has ever faced. Through the global financial crisis, through the Canterbury-Christchurch earthquakes, and, more recently, with the Kaikōura earthquakes, this Government has shown leadership, it has shown support, and it has shown that it can get the economy back in order so that it can be of support to people when they are in need.

I want to say to Marama Davidson, the previous speaker, that the hearts of all of us in this House go out to those people who fall on hard times. Of course we want to have a country that has a helping hand and that shows a helping hand to those who fall on hard times, but there are hard-working New Zealanders who provide that, so there always has to be a balance. There always has to be that balance between where you can have two households literally living next door to one another where some people are struggling and others are working hard to pay their taxes and raise their families, so there always has to be that balance, which means there always has to be some form of obligation. So of course we want the sort of country that cares for one another and provides, but by the same token there has to be some obligation.

I am very proud to be part of a Government that has overseen the restoration of this country’s economy to the stage where we now have surpluses and we can make choices about how we spend those surpluses for the benefit of the wider New Zealand community. I was very proud last year to see the first raise in the benefit levels in over 40 years going to some of the poorest in our community, and proud again of Budget 2017, with that $2 billion package addressing both the accommodation supplement and low income levels through Working for Families, which will see over a million people get an average of $26 a week.

But, more importantly, I am really proud to have been able to lead the overhaul of our child protection system. This is a 4- to 5-year process—in fact, it will probably be a 6- to 7-year process by the time we are finished. It is important that we understand when we are reaching out to those most vulnerable in our community that the most vulnerable are children, because they have no voice. We talk about their parents and we provide assistance to their parents, whether it is housing, whether it is benefits, whether it is the accommodation supplement, etc., but those children, for no fault of their own, start their lives under severe circumstances. We have an obligation, which is why we come into Government in the first place, why we come into this House, to support them.

Last year we had the first set of legislative reforms, and just 3 weeks ago the big legislative programme passed through this House. I have to say that I am extremely disappointed, because I have sat in this House for some years now listening to members talk about the responsibility that we have to these young, vulnerable New Zealand children and young people, and those very people, when they had the opportunity to put those children at the centre of a big legislative change and a big system change, actually voted against it. I was even more disappointed when it became clear that they had not done their homework and read the bill that came back into the House from the Social Services Committee, but apart from all that, if we want a system that actually puts those children’s interests at the heart of everything we do, then we need to have their voices, and that legislation gave them their voice. It gave them their voice not only for themselves but for the system, and it was disappointing that the Opposition parties all voted against it.

GRANT ROBERTSON (Labour—Wellington Central): It has certainly been a momentous 24 or 36 hours in politics, and the election of Jacinda Ardern and Kelvin Davis as the leadership team of the Labour Party is one of the great political moments I have witnessed in this House. But there has been another enormous moment in New Zealand politics in just the last few hours. Steven Joyce turned down the chance to go on Morning Report and abuse the Labour Party. This was once prophesied by a small Inca tribe many centuries ago, and no one ever believed it would come to pass. Over the centuries people have thought it may happen that Steven Joyce may turn down the opportunity to make mindless statements about the Labour Party, but it has never occurred. Then this morning he turned down the chance to go on Morning Report and have a crack at the Labour Party.

Sue Moroney: Why was that, Grant Robertson?

GRANT ROBERTSON: My colleague Sue Moroney asks why. It is because they are scared—because they are running scared on that side of the House. Bill English and Jonathan Coleman were sitting there today in the front row with no idea what to do in the face of a Labour Party led by Jacinda Ardern and Kelvin Davis.

I want to say something briefly about Andrew Little. Andrew is one of the most honourable people whom I have ever worked with in politics. He is a person who has spent his entire working life trying to advance the causes of working people. Every decision that he made as the leader of the Labour Party and in his former career has been about what is best for working people, and I acknowledge his courage and his bravery in the decision that he took yesterday. I also want to speak about Jacinda Ardern. Some people know that I shared a parliamentary office with Jacinda Ardern, and I want to put on record today that I apologise to her parents, because when she entered that office she had never drunk alcohol and did not swear very much. Now she is a whiskey connoisseur, and I am not going to talk about the swearing because it will get me in trouble. She is a person whom I have known for a long time whom I have huge admiration for.

One of the reasons for that is that I regard Jacinda as a truly global citizen. Sometimes the members on the other side of the House and in the media like to take the mickey out of the fact that Jacinda led an organisation called the International Union of Socialist Youth, but in doing so what she was doing was expressing her values as a global citizen—her commitment to look outwards to how she could work with people from right around this planet to make the world a better place. She has done that from a very, very early age and continues to do it now. Philip Matthews, I think it was, put on Twitter yesterday that Jacinda was a cross between Lorde and Helen Clark. That is what he said yesterday. I do not know whether people have heard Jacinda sing, but we will stick with the Helen Clark bit at this stage. But, actually, that is the kind of inspiration I think people are now feeling from seeing Jacinda in that leadership role.

But what I know that Jacinda and Kelvin Davis both believe is that, actually, it is not about them. It is about the people whom we are all put in here to represent. It is about making sure that we are a country where we are prosperous because we are clever and talented, not because we are selling houses to each other; that when we are in Government we know that our job is not just to be the managers of the status quo but to be the builders of the future; and that we take an overwhelmingly positive view of New Zealanders, who are resourceful, innovative, creative, just, and compassionate—just and compassionate. That is what I think about when I think about Jacinda Ardern and Kelvin Davis, and it was my absolute pleasure and my pride to nominate Kelvin to be the deputy leader of the Labour Party yesterday. In Kelvin Davis we have a man of huge mana, an educator from the Far North of New Zealand who lives his values, who has stood up against violence not only in this House but in the community that he serves.

I could not be prouder of the line-up that the Labour Party is taking to this election. I could not be prouder to stand for a party that has for more than 100 years stood for a better and fairer New Zealand. I could not be prouder of this country that we can deliver to New Zealanders a quality of life and an environment that they will enjoy for the future. There might be only 50 days to go in this election campaign. The Labour Party is going to run the campaign of its life for the people of New Zealand.

MARAMA FOX (Co-Leader—Māori Party): The Labour Party is going to have to do just that—run the campaign of its life—to turn this bus around, because while there might be two new drivers, the bus is still the same. I am pretty happy that Kelvin Davis is sitting shotgun in that bus, because he might need a few bullets to put in that gun to make sure that this party does not throw Māori underneath that bus yet again. If we look at the history, that is exactly what has happened, over and over and over again. I have heard since I have sat in these benches: “Oh, the long 9 years.” Well, I tell you now, it has been a long 150 years.

As I travelled home from a tangi yesterday I was missing all of the adventure that was going on in the House, but I got to watch the parliamentary channel on my phone—great app, that one—and saw questions to the Hon Nikki Kaye, Minister of Education, talking about the decile system and getting rid of it. I have a bit of knowledge about our decile system. I know that I have taught in a decile 10 school where there was a pocket of decile 1 Māori students who were more at risk because they were in that school than they would have been had they been down the road in a decile 1 school. Why? Because if you had a population of less than 10 percent Māori in your school, no matter what decile it was, you had less of a chance of succeeding in that school, whether it was decile 10 or decile 1. In fact, you would have had a better chance of succeeding in a school that was decile 1 where the population of Māori was greater than 30 percent.

That was a few years ago, and things have shifted on, thanks to the former Minister Hekia Parata. We are changing the decile system, and I say that it is fantastic that the pūtea follows the child. You might have some decile 1 students in your decile 10 school—that is something that everybody understands—and the money will follow them, not the environment that they live in or the neighbourhood that they come from. We had a decile 1 school where all of a sudden, with new statistics, the environment around it and the neighbourhood around it meant that we got changed to decile 2. We had to go back to the Ministry of Education and challenge that, because the students were being bussed in from all over the place to come to our kura.

So let us come to the predictive risk modelling. If we are looking only at what homes they come from, if we are looking only at whether they have shoes, if we are looking only at whether or not they can afford to have lunch that day, we are looking at the wrong things. If you go to a school that does not support your language, culture, and identity you are just as at risk of failing than for any other reason.

In fact, you can go to Rakaumangamanga in Huntly, which had the highest pass rates in this country bar no other school, and it is a lower decile school with some of the worst problems that face a community, but they have one thing—well, they have a few things. They have language, they have culture, they have identity, and they have overcome the stigma of the social deprivation and they have succeeded. Why? Because they put those things first. So if this predictive risk modelling does not include who is standing in front of that student, what school they are going to, whether they are mainstream or Māori-medium, then it is not good enough. We continue to blame the families for the failures of the system, and our children have been under-served by this system. They have not failed in this system on their own; the system of education in this country has under-served them.

And that is what I want to talk about. If we make Te Reo Māori a core subject in this country, then we will just be doing for the rising generation what they are already doing for themselves. They see that as value-add to this nation, they see that as value-add to their own knowledge, and they see that as value-add to part of being a Kiwi. And for those parties that believe that Te Reo Māori should not be spoken in this House, I say “Shame on you.”, because it is the way of the future.

So I want to say to the Labour Party: good move. Good move. You took a risk and it is the best tactical move that you have made to date in 3 years. That is what I think; that is a good move. But, to those who say we need to step up our game if we want to be in a coalition with possibly a left-wing Government, I say to you: “Mate, we are a party of the future. Come and join us on our bus.” We put our hand out to you, because you will not be coming with us. We will be coming together for this nation. All of us need to be on the same bus.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member’s time has expired.

CHRIS HIPKINS (Labour—Rimutaka): A week is a very long time in politics, and the next 50-plus days are going to be an even longer time for the members opposite in the National Government. I have a useful piece of history for them that was pointed out to me this morning.

Bob Hawke became the leader of the Australian Labor Party 1 month ahead of a general election that he won by a landslide. If he can do that in 1 month and we have the luxury of having 7½ weeks to do that, we are going to make the most of every single day that we can do that. Bob Hawke, a lot like my good friend and colleague Jacinda Ardern, was in touch with the mood of the nation—in touch with the people he sought to govern. He did not desperately try to pretend he was relevant by putting spaghetti on pizza, or try to be a person of the people, or enter the Fight for Life to prove that he was tough, or do a bizarre America’s Cup video like the one Bill English did where he kind of looked like he was having some kind of seizure.

Unlike that, Jacinda genuinely is in touch with the mood of the nation, and it already shows in the very warm reception that she has received since she became the leader yesterday, and I am looking forward to campaigning alongside Jacinda in the next 7½ weeks to secure a change of Government, because let us be absolutely clear—Jacinda Ardern and Kelvin Davis represent something that Bill English and National will never represent, and that is change and hope.

Bill English’s message to New Zealand—and it is one message—is that this is as good as it gets. Jacinda Ardern’s message to New Zealand is: we can be so much better. And I think that is absolutely the right message to put in front of the voters, because New Zealand should be a country of opportunity, security, and fairness for everybody, not just those at the top whom the National Government seeks to represent.

Kiwis at heart fundamentally believe that we are all in this together. The National Government has spent the last 9 years trying to convince them that it is everyone for themselves, and at this election they will have that choice. They can have the extra $20 or $30 a week in tax cuts while housing continues to become unaffordable for more and more New Zealanders, while rental accommodation becomes available to fewer and fewer New Zealanders who need it, while our education system continues to be run down because of lack of investment, while people are being denied the healthcare they need because National has starved the health system of the funding it needs, and while climate change continues to be overlooked by this National Government; or they can choose a future where we tackle those things together, as a country. And that is the promise of the incoming Labour Government. That is the promise that Labour will be taking to this year’s general election. I think that is what New Zealanders have been crying out for, and that is what they will hear from us.

You can see the look of hope draining out of the faces of the National members opposite, because they know that they represent the past and not the future. They know that Bill English has only one mode: doom and gloom. And try as he might to read the lines that the focus group researchers are giving him, he simply cannot pull off positivity and a vision for the future. We know that they are already in panic mode, because Gerry Brownlee has already let slip that they are worried about the level of positive reaction that there has been to Jacinda Ardern’s leadership. He gave Paddy Gower a set of pompoms, because he thought Paddy Gower was too positive about Jacinda Ardern. Well, there is one thing that you could never confuse Gerry Brownlee with being, and that is a cheerleader. Gerry Brownlee will never be a cheerleader for anybody.

Then, of course, you have got “Mr Doom and Gloom No. 2”, Steven Joyce, who stood up in the House and tried to bore everybody into submission with his contribution. The best that Amy Adams could then offer was the strong and stable leadership line that worked so well for Theresa May in the United Kingdom. And, of course, we have yet to hear from Maggie Barry, Parliament’s own cross between Hyacinth Bucket and Patsy from Absolutely Fabulous. I am sure that she has got a contribution to make in this debate that will be equally full of hollow clichés, hollow rhetoric with no real hope for the future, and, of course, a good lashing of nastiness, as only Maggie Barry can deliver.

Over here we are feeling positive and optimistic and upbeat about the future, and we are looking forward to the next 50 days on the campaign trail.

JONATHAN YOUNG (National—New Plymouth): Thank you very much, Mr Assistant Speaker, for the opportunity to speak. Can I not only congratulate Jacinda Ardern but also acknowledge Andrew Little, who for the last two campaigns contested very strongly against me. I have noticed very few comments about him from the other side, and I think that is not a good thing.

If I was a gullible New Zealander listening to the relentless negativity coming from the Opposition benches, I would nearly think Statistics New Zealand was on its own brand of happy pills, because a week ago it said that most New Zealanders say they are highly comfortable with their lives. These are the people who are statisticians, gatherers of data; they are the gurus of granular information. These are the people who sit behind computers and analyse such detail to present to us megatrends. This is what they say.

Yes, you can go down deeper into its report and get more precise breakdowns of the information, but it said that around 83 percent of people rated their overall life satisfaction 7 or above on a 0 to 10 scale, and it said the result was similar in 2014. Is that not amazing! You would not believe that if you listened to these people. All you would hear from the Opposition is doom and gloom. All you hear is heartache and heartbreak. And, look, we know there are people whom we need to reach out to, and I believe Minister Anne Tolley attributed comments towards them, and that is the purpose of Government—to lift up those who need lifting up. We desire to help and to deliver for all New Zealanders.

I come from one of the most positive places in New Zealand, and that is the great city of New Plymouth in the wonderful region and province of Taranaki. We make our own luck there, even though we are said by the ASB regional report to be the lowest in terms of regional growth because of the drop in oil price and the drop in dairy price. Yet you go to our place and, as you know, Barbara Kuriger, you know the vibe that is in Taranaki. There are positive people; relentlessly positive people come from Taranaki. We also have the highest GDP per capita still in that place. But if you went around the town and asked them: “Do you have enough money?”, probably a lot of people would say: “Well, I could always do with a bit more.”

Statistics New Zealand said this: back in 2008, 13 percent said they had more than enough money to meet their everyday needs. Today that figure has grown to 18 percent. And this is very interesting: back in 2008, 15.4 percent said they did not have enough money, and in 2016 that figure had shrunk to 10.9 percent. Statistics New Zealand said that, generally, New Zealanders think their financial well-being has improved. This is not a party political broadcast. This has not come from the Government. This has not come from National Party headquarters. This has come from Statistics New Zealand a week and a half ago. It went through its General Social Survey of 9,000 participants, and this is what it says about how New Zealanders fare at the moment. So after coming through a global financial crisis and the $18 billion cost of the Canterbury earthquakes New Zealanders are having a growing sense of optimism about their futures. This does not just happen. It is like turning a great ocean liner around; it takes times to turn an economy.

When we became the Government in 2008 Treasury said we had before us a decade of deficits. Instead, today we are the envy of the world. We are first in prosperity. We are first in ease of doing business. We are first-equal in anti-corruption. We are second in terms of quality of Government. We are even top of the international list of places to retire to. Is that not fantastic, Minister Barry?

Hon Maggie Barry: It is.

JONATHAN YOUNG: During this period of time, when we have seen incomes increase, we have reached out to those on lower incomes. We have increased the accommodation supplement as part of our $2 billion families package. We lifted the incomes of beneficiaries by $25 a week last year. It was the first real increase in more than 40 years. Listen to this: New Zealand’s superannuation rate for married couples has gone up 37 percent since 2008, and the single rate up by 36 percent, or by $104. We are looking after New Zealand. We are delivering for all New Zealanders. Thank you.

MATT DOOCEY (National—Waimakariri): Well—what a week. Everyone is fixated. They are talking about it up and down the country. Will the Crusaders beat the Lions on Sunday morning, in Ellis Park Stadium in Johannesburg in South Africa? I must say, as a proud, born and bred Cantabrian, that I am looking forward to us winning the Super Rugby title again. Since 2008 we have been waiting to win this title again. We are the best rugby region in the world, and I am looking forward to us reclaiming the title early on Sunday morning, in New Zealand time. That will give the momentum for Cantabrians to claim and expect a world-class international rugby stadium to be built in the centre of Christchurch, returning us, rightly, as the home of rugby in New Zealand. I am looking forward to that being built as part of our regeneration—the jewel in the crown.

This Government is delivering for New Zealanders. We are delivering a strong, growing country. We are delivering a strong, growing economy. Ultimately, what we are doing is shaping globalisation for the benefit of New Zealanders. Every year there are thousands of young New Zealanders who head off on their OE. They travel to many countries and they quickly learn that in a globalised world, countries that are competitive and have a developed economy are the countries that improve the well-being and living standards of their people and protect their environment. Countries that are not competitive and do not have a developed economy do not. It is as stark as that. It is a choice, and that is why on this side of the House this National Government is choosing to have a developed economy that is improving the well-being of its people.

Look at any metric: a surplus of $2.7 billion, forecasted to grow to $7.2 billion; 3 percent GDP growth, which is the envy of all other OECD countries; an unemployment rate announced today of 4.8 percent—in my electorate of Waimakariri we are tracking at just under 3 percent; and the highest workforce participation rate this country has ever seen. What we are doing is backing hard-working Kiwis. We are the working people’s party, backing hard-working people. We have created over 200,000 jobs in the last 2 years, and we will go on to create over 200,000 jobs by 2021.

Not only that, but we are looking to reduce our core Crown debt by GDP to 10 to 15 percent. Some countries are 60, 80, or over 100 percent; we are ambitious and aiming for 10 to 15 percent by 2025.

What we are is the party of infrastructure. We are delivering $32 billion worth of infrastructure over the next 4 years. What we are doing through our strong management of a growing country—a growing economy—is resulting in direct investment into my electorate of Waimakariri. This term we opened up the new Rangiora Health Hub. That is the health hub that Annette King campaigned on with Clayton Cosgrove 3 years ago and said was never going to happen. Well—over $10 million of local health investment into infrastructure—it has opened. Not only is it opening but we are relocating the Hagley Outpatients building out to Rangiora, so constituents in my electorate can have their first specialist appointment—delivering first-class health care to the doorstep of rural communities. That is all happening because we are building a new public hospital in Christchurch, as well as the recently opened hospital in Burwood—$1 billion worth of investment into Greater Christchurch for health infrastructure.

But it does not stop there. I have got $400 million going into two new motorway projects: the Western Belfast Bypass and the Christchurch Northern Corridor, bringing reliable travel times and uncongested roads to frustrated Waimakariri commuters.

Ultimately, the jewel in the crown is that this year we have got 10 schools opening new, modern learning environments—first-class, 21st century technology, empowering our young people. They can go on to achieve their full potential and achieve in a globalised world. Thank you.

TODD MULLER (National—Bay of Plenty): In my contribution this afternoon, I would like to talk about how we are delivering for New Zealanders, through the lens of my community in Papamoa. Firstly, I would like to start by reflecting on the population growth that has occurred in my community over the last few years. It is quite significant. It is now in the top four in the country and, indeed, a 74 percent increase in our population is expected through to 2023. As you would expect, the job opportunities in my community have spiked. It is quite extraordinary, the number of jobs that we have created in the community over the last year—in the Tauranga area, over 4,000—and we expect that number to increase over the next 12 months.

Not only are those jobs coming, it is the nature of them, from manual labour, which is critical to supporting a kiwifruit industry that has recovered beyond people’s expectations, all the way through to applied manufacturing, IT, and professional services. We have GDP growth at just on 5 percent. We have employment growth of 5 percent. It is a community that is performing exceedingly well.

What I would like to do this afternoon is to tip beyond those high-level numbers—which, of course, are very positive and reflect the collective effort of our community to deliver on those—and actually talk to the work that has been done by the Government, local government, and the community to ensure that that momentum is maintained.

Firstly, we have anticipated where the people will live. We have a mechanism called Smart Growth, which has identified that Ōmokoroa, Tauriko, and Papamoa are the communities of the future. They are where the growth is going to occur. Through this Government we have enabled 11 special housing areas to be established, the most per capita in the country and the most successful in terms of a local government application of that opportunity that exists across the country.

Two weeks ago we announced the Government’s contribution to securing that future growth pipeline for our community—$230 million worth of infrastructure that is going to facilitate that growth; interest-free, to underpin infrastructure for wastewater; through to enabling another 4,700 houses to be built in the short term in Papamoa. Accessible Properties has taken over from Housing New Zealand. It has over 1,100 houses, it has clear plans to build in the short and medium term, and the resistance that the community initially expressed has all but dissipated, as they can see the values and focus on service that that company is delivering.

On top of that, the Government’s contribution to the housing pressures in our community is 220 emergency housing places for the Bay of Plenty. Already, there is a number under way and being welcomed by the community. But we are building enabling infrastructure to be able to support that growth. We have completed ultra-fast fibre. We were one of the first areas to get it completed. We now have the highest uptake in the country, and that has seen a remarkable pull for businesses and talent and people to our community.

In terms of our infrastructure and roading, we have opened the Tauranga Eastern Link. We have committed half a billion dollars to the Tauranga Northern Link, which starts next year and which my communities are going to be hugely supportive of, particularly those on the western side of my electorate.

We have announced two new schools to be built in the next 18 months in my electorate, one in Papamoa and one in Pyes Pā, and, of course, a huge number of classrooms, as Matt Doocey has talked to, which is going to facilitate the appropriate modern learning environment that we need as a community.

But on top of that, we are ensuring that this economic momentum, which is significant, is supported. As someone who has lived in the community for 40 years, I have seen some booms before, but this is quite different. It is not just retirees moving from Hamilton and Auckland down to Tauranga; it is a complete mix of families and skills and people with ambition and excitement, and it is a great place to be, but we cannot just assume it is going to stay that way. That is why we have a regional growth strategy, which is very clear in terms of the sectors that we believe need support.

We know that there are specific areas in respect of education that we are focused on. We have got Toi Ohomai being established with the merging of Bay of Plenty Polytechnic and Waiariki Institute of Technology. We have got the university CBD development in the city of Tauranga. It is a city that is significantly different from the one I can recall from when I grew up, and we are playing a key part.

It is wrong for me to stand here and say it is just the Government, for it is not, but we are a key part of it because we have got a very clear plan that will continue the delivery of that momentum and will continue to have families and their success and their aspiration at the heart of what we do. It is why I am so proud to be able to take this record to my community over the next few months. Thank you very much.

The debate having concluded, the motion lapsed.

Estimates Debate

In Committee

Debate resumed from 1 August.

Primary Sector (continued)

Hon NATHAN GUY (Minister for Primary Industries): What a fantastic Budget this is for the primary sector, Budget 2017—the best ever. There has been $170 million invested into the primary sector. Yesterday I was down on the Taieri plains. Many of you will know where that is, and for those of you listening who do not, it is very close to Dunedin Airport—very, very wet. Just 10 days ago they had a huge deluge of rain. I was out there talking to farmers, and my heart goes out to those farmers who are still working their way through floodwater that in places is about a metre to a metre and a half deep. I saw this one very interesting photo of a farmer standing in the pit of his cowshed—and for those of you who do not know, a pit is a bit like a swimming pool, normally without the water, so that he or she can put the milking equipment on to the cow’s udder. Well, he was standing almost up to his navel in water, milking his cows. He had the pump operating, and as quick as the water was coming out of his cowshed, it was coming back in. Now, that is the overall resilience and resourcefulness of our primary sector. They are getting on and doing the job. We have announced a small amount of support for our farmers down there, to ensure that they can get back on their feet as quickly as possible.

When I got back from Dunedin last night I turned on the TV screen in my office, and who did I see talking about the appropriations to do with the primary sector but New Zealand First and Labour—very critical about biosecurity. For those listeners who were listening or watching last night, I just want to make sure that they reflect on those naysayer comments that occurred last night. In particular, what they did not acknowledge is that Budget 2017 is investing $18.4 million in the biosecurity system. This bumps it up to an all-time high of $248 million. That means that we can do more. We can review the most at-risk import health standards. We can ensure that we are educating New Zealanders about the importance of the biosecurity system. If there is one thing that myrtle rust has done, it has done a huge amount about educating New Zealanders about what it means. Over 700,000 New Zealanders have reached out to the Ministry for Primary Industries (MPI) or on social media to understand what myrtle rust is all about. That has been great engagement from New Zealanders. Ultimately, we want to have 4.7 million New Zealanders who understand more about biosecurity by 2025.

Also, this investment will focus on technology, because soon we will have in place, instead of having dogs—although we will probably never get rid of them; these are the fantastic beagles that detect all sorts of odours and scents when people come off the cruise liners or come off the planes at our airports—we will have electronic sniffer dogs. So you will walk down a corridor, you will not even know that the machine is working, and then one of our compliance officers will pop out at the end of the corridor and probably infringe you with a $400 infringement fine. So technology is going to play a huge role in terms of the overall capability of the biosecurity system.

Then, if we think about the other response, which is really important and under way, down in the South Canterbury and North Otago areas, and that is M. bovis. That was a very unfortunate find and a very unfortunate disease, and I want to commend the farmer, the van Leeuwen farming operation, for their cooperation. They are working very closely with MPI. We have got world-leading animal health veterinarians working on this response. We have got a team based out of Ōāmaru. There is a huge amount of testing and tracing happening on these farms. We have got the farms in question locked down. Hopefully we will be able to eradicate it. Right now the process is on containment. When I was talking to the farmer a few days ago, he said to me that he is delighted by the fact that MPI is working constructively with him. We have got the best veterinarians on board from Australia, and we have got the technical advisory group, made up of industry and veterinarians, working with MPI on this response.

Then if we think about the farmer meeting that was held on Friday last week, and another one has concluded today—there is a huge amount of information that is flowing out through DairyNZ, through Federated Farmers, and through Beef and Lamb. It was really interesting to see the positive comments. What was reported back to me, as a result of that meeting on Friday last week, is that MPI staff were stunning. They were really, really good. They handled the farmers’ questions brilliantly and in a down-to-earth manner, and the farmers left the meeting feeling a lot more comfortable than when they turned up. I just want to ensure that the communication going out to farmers on this particular disease is reliable and accurate.

Then if we think, also, about the great work that has happened in the biosecurity system, we have now got 14 Government industry agreements. They have signed up. That is where they come and work with MPI on preparedness and response. They sit around the table. We have got an $87 million investment happening out at Wallaceville, a biocontainment facility that will be world leading, so that if we do have diseases of this kind we can keep our trade flowing. Of course, M. bovis does not have an impact on trade, and it does not have an impact on food safety. It does have an impact, however, on production. We have got new and modern X-ray machines, which we are rolling out at our airports, and we have got mobile X-ray machines that we are using on the cruise line pathway as well. We have got 20 new dog detector teams. There is a huge amount happening.

Then, of course, we have got the border clearance levy that came in under urgency during the Budget a couple of years ago. Labour and New Zealand First did not support it. I could not believe why they did not support it at the time, and I still cannot. At every woolshed and cowshed meeting I turn up to, farmers are just dismayed that New Zealand First and Labour did not support a levy that is going to mean more funding focused on the border. We have tourism growth at about 7 percent a year; this funding matches that growth in demand. Ultimately, it means that MPI can invest more at the border. Yet on the other side of the House—even the Greens were pragmatic enough to realise that this fund will ensure we do more with biosecurity. But New Zealand First and Labour did not support it. That is really, really disappointing.

Back to the Estimates. I also want to focus on irrigation. There is $19 million invested in irrigation. These big water storage projects take about 15 years on average to get across the line. That is why we are partnering with farmers and, in some cases, regional councils, to get them across the line. We collect and store only about 2 percent of the rain that falls in New Zealand. That is why, I believe, Central Plains stage one, and stage two, which is under way—I see Greenpeace members were down there, trying to padlock themselves inside the irrigation pipes today. I am really disappointed in that. They are just slowing down productivity. They are actually slowing down environmental gains, because instead of the water coming out of the ground—being extracted from groundwater aquifers—it is coming from river run and snow melt, so you have got environmental benefits. Ultimately, 15 percent of the water that would have come out of the ground is now flowing to Lake Ellesmere/Te Waihora. That is a huge benefit. There are economic gains. There are social gains as well with water storage projects, because in a lot of cases, water is supplied through to some towns and cities in New Zealand.

Also in this appropriation we focus on trade. There is $35 million invested in trade. The other side of the House does not support the Trans-Pacific Partnership (TPP), and it is great that there is a bit of resurgence on TPP11. The $35 million is broken down into a real focus on non-tariff barriers. We are going to create an MPI flying squad to get on top of some of these issues that our exporters face. We are also setting up the economic intelligence unit. That is for young entrepreneurs who want to get started in terms of understanding where the niche opportunities are, so we are going to extract the data sets and make them available. We have also got the Exporter Regulatory Advice Service. That is for some of these young exporters, fledgling companies, to know whom to talk to within MPI and also to deal with some of the bureaucracy in international markets. We know that language might be one of those—but just trying to understand whom to turn to and whom to get the information from. So there are some great initiatives that are funded in Budget 2017. There is a real focus on the primary sector.

I had a good chat with Boris Johnson when he was here just last week. It was great that we could take him to Kaikōura. I had an opportunity to talk to him about Brexit and the UK. Hopefully we will see some benefits from that discussion.

Votes agreed to.

Social Development and Housing Sector

The CHAIRPERSON (Hon Trevor Mallard): We come now to the votes in the social development and housing sector, volume B.5, volume 10. The question is that Vote Building and Housing, Vote Social Development, Vote Social Housing, and Vote Vulnerable Children, Oranga Tamariki stand part of the schedules.

JOANNE HAYES (Chairperson of the Social Services Committee): As you have said, Mr Chair, the social services Estimates for 2017-18 comprise the social development portfolio, and the portfolios for vulnerable children, social housing, and other social investment and State services. At the select committee hearings, we heard from Ministers Anne Tolley, Amy Adams, Nicky Wagner, and Nick Smith about those portfolios.

I just want to talk about some key investments from the Estimates hearings. I want to start off with the key investment in the Ministry for Vulnerable Children, Oranga Tamariki, which is $434.1 million. When we look at this, we start to look at why the ministry was transformed into Oranga Tamariki and why young people did not have a voice in the previous organisation, but now they have. They have advocacy services through VOYCE and they are now centre of the operations at Oranga Tamariki, or the Ministry for Vulnerable Children—that is $434.1 million.

As I said, as I start to break this down, we have got $26.4 million to support around 4,500 caregivers of children in care, as well as to help those caring for higher-needs children. We have got $94.4 million to meet the new ministry’s cost pressures through the transformation that Minister Anne Tolley launched on 1 March this year. We have $71 million to extend the support for young people in care, and $28.1 million to extend Family Start, which is really important because Family Start has had its ups and downs over its time with the previous Government. But this Government has come in and, through the transformation of the Ministry for Vulnerable Children, it has been able to work the programme out so that it is more responsive to the children in Family Start and their care. We have $11.7 million over the next 2 years to trial and evaluate community-based remand placements as well, through this funding for Oranga Tamariki.

As I start to move through the votes that we heard, I want to take a little bit of time to talk about the $2 billion Family Incomes Package. This was the centrepiece of the 2017 Budget, and—

The CHAIRPERSON (Hon Trevor Mallard): Order! The member will resume her seat.

JOANNE HAYES: OK.

The CHAIRPERSON (Hon Trevor Mallard): I just want to make it absolutely clear to the member that she is reporting from the committee on the areas the committee is responsible for. That is not one of them.

JOANNE HAYES: OK—righty-o. As we move over to the $64.4 million of new money for new operating funding to help people to move off benefits and into work, this particular part of the Estimates has been really good for those who have been looking to get off the benefit and get into work. Just recently—just today, actually—we have seen that the unemployment figure has gone down to 4.8 percent, and that has brought us back into line with the 2008 figures.

When we start to look at the housing Estimates that we talked about with the Minister at the Estimates hearing, we can see that $100 million has been set aside for new capital funding, part of which is for 1,200 new houses as part of the Auckland Crown Land Development Programme. That was also discussed at that meeting as well. We have got $2.3 billion to support 310,000 households with accommodation, and that is however they would like to have that—whether that be in accommodation supplements.

I think the area I do want to finally mention—as I watch the clock ticking down—is the $321 million Social Investment Package. This really has been a really important package because it has helped people within the mental health services. We have put money aside for them there. We have put it into helping kids to get a better start in life, we are addressing barriers to employment and independence, and we are reducing offending and improving long-term outcomes through this package. Overall, within the Social Services Committee, we had some very interesting presentations from the Ministers, which I mentioned at the start of my speech. We had some very interesting questions posed to them and, as the chair, I felt that the questions were well received and well responded to. Thank you.

POTO WILLIAMS (Labour—Christchurch East): I rise to take a call in this Estimates debate. My specific area of concern is about investing in communities. This Budget sees a decrease of $4.775 million in the area of investing in communities, down to $39.163 million. The specific area that this affects is the appropriation that is limited to approving community-based social services; managing the relationship with service providers, including funding and monitoring; and the coordination of social support services to strengthen families and whānau. In my experience, this is the appropriation that supports the relationship between the Government and communities, and the Government and social service providers. It is the basis of the infrastructure development that might go into supporting those community organisations to support communities, and it is a very important part of enabling the Government to put into effect its policy for better social services for communities. It is a very important part of how communities engage with the Government.

It is to my distress that I see that there is a decrease in the funding to this particular area, because there is no doubt that it is hugely important to support the development of strong and resilient communities. One of the aspects of that, of course, is ensuring that people are able to access long-term, affordable, decent housing, whether they own it or whether they rent it or whether they are State house tenants. The ability to have long-term tenure in a house and the ability for families to put down roots and build social capital and to network into communities is very important for their social well-being long term—being able to reach out to the resources that are there within the community, such as the schools, the sports clubs, the churches, the coffee groups, and the community organisations and activities.

Community organisations achieve a huge amount within their communities, and it is the soft skills that they provide to people that is important. Often we look to crises and how we intervene in crisis areas, such as family violence. But if you build resilience within your community by building in soft skills, the ability to deal and cope with some of the issues—how you learn to deal with those things—often prepares you well for when times get tough. Places like women’s centres, where you get some social contact, you can build some self-esteem, you can work through your issues with counsellors and with people who have an affinity for you, allow you to actually put in place some steps and mechanisms to cope before you are in a place of distress.

The decrease in funding, and at such a large extent, really troubles me, as places like the women’s centre—and there have been a couple that have closed over the last year—will no longer be able to provide this kind of soft support that actually builds resilience and thereby saves people from the real hard-end harm that they may experience later. Can you imagine supporting kids to build their self-esteem and their social skills so that when difficult times come later, when they are teenagers, they are actually in a much better position to cope with that. That is at the real heart of where community support lies, and the decrease in funding puts us in a position where we are unable to prevent more serious harm from happening to people.

Families in crisis are in crisis because often they have not built up the ability to deal with issues along the way and become resilient. Community groups are at the heart of that. The result of the decrease in this funding will have a serious impact—will have a direct impact—on a community’s ability to be resilient. I would like to at some point later in this debate talk a little further about that. Thank you.

Hon ANNE TOLLEY (Minister for Social Development): I just want to take a call as the Minister who appeared in front of the select committee, in two areas: first of all, the Ministry of Social Development (MSD) and then the Ministry for Vulnerable Children, Oranga Tamariki.

Just in response to the member who has resumed her seat, Poto Williams, can I say that that reduction in community services funding is a result of the one-off funding that was part of the community investment programme that ran over 4 years, actually, and was the last of that money that was provided to build capability, to help community services build the infrastructure that was needed in order to move to results-based funding. So it was one-off funding and it was always promised for 1 year, and of course it disappeared at the end of that year.

I just want to touch on one particular thing for MSD in the Budget, and that is the $19.5 million over the next 3 years to expand that intensive support for up to 1,500 young New Zealanders. This is a particular target group that we have been quite worried about. They are now aged 25 to 29, but they entered the benefit system under the age of 20, and they entered the benefit system at the time of the global financial crisis. This is not peculiar to just New Zealand. This is from talking with others around the world dealing with a similar age group who, had the financial crisis not happened, would probably have left their training and gone into work and sustained that employment. For some reason, they seem to be trawling through the benefit system, actually finding work, but not sustaining it, and are returning to the benefit system.

So this $19.5 million is particularly targeted at that group of young New Zealanders whom we want to assist. Well, first of all, we would like to find out what the barrier is to them being retained in employment, and, secondly, then put in place any steps that we can to help them maintain that employment—so it is a particular group, and I think it is going to be money well spent on that section of New Zealanders.

Of course, a large part of the time with the select committee, in the Estimates, was around the second year of considerable funding into the new Ministry for Vulnerable Children, Oranga Tamariki. There were a number of streams of work: first of all, an increase in base funding, to maintain the existing services. It is very important, when you are reforming a service and expanding their reach, that you maintain those essential services at the core, which are for about 5,500 young people who are in the care of the State. But in addition to that, we increased the age in the legislation last year, so $71 million went straight into the Budget in order to maintain those young people within the State services for another year.

There is $11.7 million over the next 2 years to trial and evaluate community-based remand centres for young offenders. There has been quite some publicity in recent months about young people being in police cells, and none of us want that. That is not a great place for a young person to be. Sometimes it is the safest place for them to be at a particular time. But despite the fact that we have youth residences of a very high standard, providing good services around those young offenders, we know that the best way to deal with some of those young people while they are on remand—so before they actually go into the Youth Court—is by keeping them in their communities. So it is by keeping them there where they have all the support from their whānau, from the wider iwi, and in many cases from their schools and that wider community support.

That is not an easy thing to put into place, and so we managed to convince the Minister of Finance that this was something that needed to be trialled and evaluated to see whether, in fact, we would get better outcomes for those young people by retaining them in their communities and wrapping that intensive care around them, from the time that they come to our attention. So, even before they go into court, making sure that we are getting some support into them, identifying education issues—money very well spent.

AUPITO WILLIAM SIO (Labour—Māngere): Thank you very much for the opportunity. I am not a member of the Social Services Committee, but I do have an interest because housing is a particular issue that runs deep in our communities. So I want to just direct my remarks on three points that emanate from the Vote Building and Housing report.

The first point is the KiwiSaver HomeStart scheme, the second point is the reference to methamphetamine contamination, and the third point is in regard to boarding houses. With the KiwiSaver HomeStart scheme, I note in the report that the appropriation was underspent by $11 million. The Minister for Building and Construction, when asked to explain the underspend, said that it was difficult to forecast the uptake of schemes like the KiwiSaver HomeStart scheme. I find that quite challenging, as to why it is difficult to forecast, when you can work on what you currently have now and what has happened in the past. When I have asked relevant Ministers how many Pacific people have taken up this particular scheme, I am not getting those answers. As I said, housing is of particular importance to the Pacific community because even the Minister for Pacific Peoples has noted that homeownership for Pacific people has declined, and has continued to decline in the last 9 years.

Another answer that concerns me in the report is that the anticipated average grant amount, in 2017-18, is $5,122. At today’s prices, how can $5,122 possibly contribute to somebody, a middle-income couple, perhaps, who have saved $10,000 or $30,000—how can that $5,122 possibly contribute to meeting the requirements of the bank, of 20 percent at least, in order to secure a mortgage for a house costing roughly $500,000 in today’s prices? I am hoping that the Minister can help the Committee understand how it is possible for people with $5,000 on average, from the KiwiSaver scheme, to buy a house.

We looked at the area of methamphetamine contamination. In my electorate there have been a number of people who have been booted out by Housing New Zealand, for the reason that Housing New Zealand has said that the particular house they lived in has been contaminated. In the report we note that the health risk from living in a home where meth has been manufactured is greater than living in a home where it has been used. But I want to ask—is the Government on top of regulating who it is who is testing whether these houses are indeed contaminated, and the extent of that contamination?

The second question I want to ask is whether the ministry, after kicking out people from these houses, due to contamination, shows them a pathway where they can get a house to live in? My experience has been that even elderly people have been kicked out of Housing New Zealand houses, and there has been no pathway for them in terms of going into a house. It is one of the reasons why Te Puea Marae in Māngere last year took in people off the streets, and today, a year later, it is taking in people off the streets, because of the lack of a pathway when people are evicted by Housing New Zealand—and one of the reasons they have given is meth contamination.

The third area is boarding houses. I note in that report that the Minister references five changes that the Government has made to improve standards for boarding houses. But the committee also acknowledges that those changes—it is difficult to know who is enforcing them and who pays for the cost of enforcement. But despite those changes that the Government refers to—and I want to lay it on the table in this Chamber, so that the Government knows I am raising it—boarding houses are a ticking time bomb as long as the national housing crisis exists. Boarding houses are a ticking time bomb. One of these days somebody in this House has got to take responsibility for deaths, for rape, for abuse, for violence towards young children or couples. Those houses were never meant—never meant—to house families with children. But that is the case we have today, as a result of this national housing crisis.

Hon ALFRED NGARO (Associate Minister for Social Housing): I rise to answer some of the questions but also to talk a bit more about the housing programme that has been taken under Budget 2017. The member was talking about the KiwiSaver HomeStart package. He is correct. In the Estimates it talks about, in a sense, the ability to engage more. The product itself has a forecast of around 90,000 people whom it can help into homes and mortgages.

Just for the member’s information—he was asking in regard to the number of Pasifika. In the first reading that we had, in regard to the first year of the KiwiSaver HomeStart package that was delivered, there were just over 11,000 who accessed that package. Those who identified as Pacific, and only those—there were possibly more—were around about 544. Just for the member’s information, that is information I can give to him. In the first year it is 544. We are going to try to get another reading, and, again, as the member knows, it is voluntary in regard to the people identifying themselves as Pacific. Potentially, there were more. So I think that would be helpful for the member.

The thing about this package—the member will remember that there was a time in the 1970s when people could actually capitate their welfare for their children, and through that benefit that was part of a contribution to the deposit on a house.

Aupito William Sio: And that’s not happening any more.

Hon ALFRED NGARO: Well, that actually went out under a Labour Government, so I will not say that, just so the member knows. It actually went out under a Labour Government, not under a National Government. It abolished it, and for good reason. It was unsustainable. If the member looks back at the history of it, it was unsustainable, so, as the member said, it was taken off.

The point that the member makes, though, about this is that we want to encourage more people to gain access to that. I think part of it is around the information that we give to people. Many people may not know that part of the eligibility criteria that the Government has given is if a person is 18 years and over, and if a person does not own a home or land. So there are a number of criteria, and I think we can do better at getting that information out so that more people can access it. We are proud of the fact that so far there are around about 27,000 people who have taken up that opportunity and who now have a mortgage as well.

The member was also raising the issue around the Government taking up the cause in regard to methamphetamine. There were some constituents, potentially some people whom the member may have known, who had concerns around the methamphetamine readings that were inside their Housing New Zealand homes. Just for the member’s information, the Government has been working with Standards New Zealand. It put together a key stakeholder reference group. That reference group has now put together a report.

In that reference group there are those from the insurance industry; there are those who actually monitor and measure; there are those who are in the regulating authorities, so the territorial authorities; and there are those in the development sector as well. So it is a cross-section of those in the whole of the building and development sector as well, and the tenancy management space. Out of that there has been an agreement, so the measure that there is—before, there was a graduated measure of three phases, three steps. It is now set at 1.5 micrograms per 100 centimetres squared. So that is the recording aspect of what they have. The agreement right across the board is that this is a standard that the whole of the sector can now work with. So just for the member’s information, that has been completed now and it has been taken on board as the standard that can be used in regard to methamphetamine.

The member talked about potential constituents whom they have been working with. As the member will know, he will advocate for those. I am sure that the Government is more than happy to be able to address those issues if there are constituents who feel that those issues have not been met. I think that is really important.

But I just want to talk about—there are many great things that have come out of Budget 2017 and the Estimates hearing. In particular, there were some speeches that talked about the issues around the challenges that are currently faced. Under this Government, we know that we support the whole of the housing continuum, from our most chronically homeless to those who are in need of a little bit of extra help. In that regard it is important, again, that one of the announcements that I think is critically important is the $16.5 million to expand the Housing First initiative. Members of the Opposition will know that this was part of the inquiry that they had taken part in, and it was one of the first recommendations that was made in regard to addressing the issues of homelessness.

Prior to that inquiry, though, there was a 2-year pilot. That pilot was in the Waikato area. We know that The Wise Group, with people like Julie Nelson, who were taking the lead in that space, truly had some remarkable ability to be able to engage with those who are chronically homeless. The retention to residency rate was at 95 percent. So because the results were, for us, astounding—they were truly making a difference—we have now taken that on board, hence the announcement in the 2017 Budget was to be able to expand that further on as well. That has now been expanded into the Auckland region. So that is an announcement of $16.5 million. I can say to members that the target is 400 and out of that so far we have just under 100 that have now been taken on board, and, again, the retention to residency is around 100 percent. But here is what I think is actually critically important: the ability to be able to engage not in social housing or emergency housing but actually in private rentals by the Housing First initiative, which is at 92 percent. There is 92 percent private residency, as we are now seeing those who are chronically homeless in that place as well. We think that is quite a critically important announcement as well.

I want to talk about the $175.2 million that was put in funding for emergency housing and transitional housing. We know that last year the announcement was made that the $304 million—the first of any Government to say that we are going to take up this challenge, we are going to be serious about this. So, therefore, we know that is continued on in Budget 2017. So it is $175.2 million for funding in emergency and transitional housing. For the member who is sitting for Māngere, I just let him know that on Friday, in the partnership with the Penina Health Trust, the Pasifika health trust that has come on as the first community housing provider, we will be launching an announcement of some of the tenancy management that it will be taking on board as well.

So this Government is doing great things in regard to working in partnership with community housing providers, and I know the member will be interested. This is a Pacific—and the first Pacific—community housing provider that is taking on this partnership. Penina Health Trust is making a difference—

Aupito William Sio: How many people are going to live in that?

Hon ALFRED NGARO: It is 21 rooms under that facility, which will truly make a difference. The member will know that there are other community housing providers such as STRIVE Community Trust, which is doing some great work—so, Sharon Wilson-Davis and her work—and Bill Peace, whom the member will know. They are doing great work in their community. What this Government realised is that it is actually the partnership with those community providers that is truly making a difference, and we think that is critically important as well.

We know the fact is that we need to, through this emergency housing and our goal—we set targets and goals so that by the end of this year it is 2,150. We are currently at close to 1,600 places available now for emergency and transitional housing, and that is the commitment that this Government has been making as well. We know that by 2020 this Government will have increased the supply of social housing from 66,000 to 72,000 places in Auckland alone. We will deliver 13,500 new social homes. Can I remind the Opposition that in the inquiry the second recommendation it made was to increase the State housing stock, the social housing stock. Again, this Government has seen that anyway, knew that was there, so in a sense, in the arguments from the Opposition, we know that we are making a difference, we have increased the housing stock, and that is making a difference as well. So that is an extra 13,500—13,500—that it is going to be increased by 2020.

We also know, when we look at the Crown land capital funding, that is an extra $100 million in new capital to be used to fund 1,200 new houses as part of the new Crown land development programme in Auckland alone over the next 10 years. I think it is important because these figures—not so much for the members across the Chamber but for those who are listening, they will be wanting to hear what things we are committing ourselves to in the Estimates and the Budget to make a difference to address the challenges of housing that exist in our community as well. The Crown Land Programme is fiscally neutral over its lifetime. Upfront funds are used to cover the cost of the housing and the land as well. Once the homes on this land are built and sold—or, in the same instances earlier—the Crown recoups the prices of the land as well. The Government has committed to 20 percent of the homes being available for social housing and a further 20 percent as affordable—defined as more than the KiwiSaver HomeStart package.

I want to give another example. Again, the member who spoke previously will know that in Manurewa there is the Waimahia Inlet project where we are again working with the New Zealand Housing Foundation, and out of that we know that there were families that were housed. There were families who came along and thought at first that they were not going to be affordable. Well, with the New Zealand Housing Foundation and a commitment from the developer and also from the Government, which put its contribution in, we were able to see over 200 families be able to access affordable homes in that area as well. People said it could not be done. This is the commitment that this Government has made over that period of time.

We think that these are significant. They are important. They are taking up the challenge that we know is critically important to all New Zealanders—that we provide a home that is warm and that is dry for our families.

JAN LOGIE (Green): I rise to take a call on the Estimates of Vote Social Development. This is the portfolio that has primary—though not exclusive—responsibility for ensuring that we are all safe and well fed, and that New Zealanders are able to live in dignity. This vote covers Oranga Tamariki, Work and Income, access to emergency housing, disability services, social service agency funding, and youth development—to name just some of the key areas within this vote. It essentially relates to the safety and well-being of our children, our families, and our communities, and I really think that the last speech, by Alfred Ngaro, demonstrated for me the fact that the Government seems to home in on certain bits to prove its case while missing the big picture.

I was visiting a community organisation last week up in Kāpiti—Birthright, which works with young mums supporting their babies and wanting opportunities. They said in the last year, and this is in Kāpiti, that 20 percent of the families they had been working with were homeless. That is mind-boggling in a community that has never been on the list of communities that are struggling round this country. That they are seeing that level of deprivation—it just shows me that Government members are missing the point in their agenda. They have waited until there is a crisis and then they show their half-arsed response to that crisis as proof of how much they care.

This vote also relates to the Government’s No. 1 priority in Government. For those people outside of Parliament who may be watching this speech, let us reflect briefly on what the Government has chosen as its No. 1 priority. It is not improving the ability of New Zealanders to participate in their community, it is not eliminating poverty, it is not even reducing poverty, and it certainly is not eliminating or reducing child poverty, because it has refused to define that. It is not ensuring that children in this country have their basic needs met. It has refused to even add such a purpose to the legislation around child protection or the Social Security Act.

Neither is it improving the employment outcomes for people with disabilities or anyone else who has been consistently locked out of the employment market. It is not even ensuring that people who are unable to be in paid work for any number of reasons, like sickness, disability, or domestic violence, have enough to be healthy. Sadly, it is not even reducing child abuse or the number of children being abused in care, because suddenly in recent times the Government has stopped recording that, so we cannot even track it. It is not preventing gender-based violence or even creating pathways out of violence, reducing the impact of domestic violence on victims.

I could go on and on about some of the really important goals that the Green Party supports that could make a difference to this country. But let me put on record now what this Government’s No. 1 goal is. The thing that it thinks is the No. 1 priority for this country—well, it is reducing the number of working-age clients receiving income support by 25 percent. It thinks that is the most important thing for us as a country.

Maybe after years of hearing that receiving a benefit is as bad as smoking a packet of cigarettes a day—and yes, that Government did spout that rubbish—or that people getting benefits are lazy and hopeless drug-taking bad parents, there may actually be people out there who think that this goal has some logic or appeal. But, hopefully, the moral bankruptcy of this goal becomes evident in the fact that the National Government does not know or care what happens to people after they stop getting a benefit. All it is concerned about is that they stop getting it in the first place.

For this Government, someone ending up in prison is equal to someone getting a degree. The way National measures things, someone committing suicide is a better outcome than a mother being at home for her child who is constantly being sent home from school because the school is not resourced to support that child’s autism. Think about that for a second. In the way this Government measures things, that is the reality of what it considers is good. The way the National Government measures things, someone living in a shed with a baby, not getting income support because she cannot deal with the stigma and shaming, is a better outcome than someone with a disability who is unable to work full time being able to live in dignity. That is what this Government’s priorities force them towards.

While you might think this is harsh, how else do we explain some of the stories that we have been hearing? We have heard examples of someone having to haul a person into Work and Income, while they were on an oxygen machine, every 2 weeks just to prove that they were sick; of people having to wait an hour or more with their children with wet pants because the toilet within the Work and Income offices is not available to clients, and because they know if they leave to go to find a toilet or a changing room somewhere else, they could miss their appointment and get their benefit cut; of people not having enough money to cover increased housing costs, and Work and Income refusing them that additional money—so they become homeless.

How else do we explain the fact that there is now a recognised problem that women on income support are unable to afford sanitary products, and are missing days of work if they were working as well as being on a benefit, because they cannot afford the absolute basics? How else do we explain the fact that, despite a growing surplus and strong job growth in this country, so many of the children in this country are going without the basics of food, warmth, and shelter, let alone those things in life that we all used to assume were just givens, like birthdays or a replacement for shoes? How else do we explain the fact that those workers at Birthright in Kāpiti talked about their clients going in, and shaking and perspiring, and being completely bamboozled by the process? How else do we explain the fact that those workers describe going in to Work and Income as the place that you should go if you ever want to see what bullying looks like? How else do we understand and explain the fact that somebody who gets off the benefit and into 20 hours of work a week is financially worse off after she has paid for childcare for her children over the year?

The system is not working. The priorities of this Government are wrong. That is why the Green Party is prioritising, in this election, a promise to eliminate child poverty, to make sure that our children in this country have enough, and a promise that the people who are unable to be in paid work have their dignity restored to them, that we support them into paid work when that is appropriate for them, and enable them to keep the financial benefits of that work so that they gain value in being in paid work.

We have costed these policies. And you know what? They do not break the bank.

Hon Member: Ha, ha!

JAN LOGIE: They are not unaffordable. When we hear laughter from that side of the House, suggesting that that may not be true, I really just do come back to this—it is not, ultimately, about money. When something matters to you, you find the money. For the Green Party, the well-being of our children—ensuring that we keep our children out of hospitals, from low income - related diseases, and that we stop them dying from low income - related diseases—is something that we will find the money for. It is something that we absolutely have a commitment to—getting people off the streets and into homes, so that we can all walk along with our heads held high, with a sense of dignity and understanding of what it is to be a New Zealander.

MICHAEL WOOD (Labour—Mt Roskill): I rise to speak to the Vote Building and Housing appropriation, and to oppose the appropriation put forward by the Government in this area. The Labour Party does not oppose the appropriation because there is something wrong with the amount of money; we oppose the appropriation because despite the amount of money that is there, despite all of the talk, despite the multiple volumes of reports from the Ministry of Business, Innovation and Employment, this is a Government that is singularly failing to do anything useful when it comes to providing decent building and housing for the people of New Zealand. I want to work through some of the specific appropriations that speak to that massive failure.

When we are talking about failure, what really, I guess, grinds our gears on this side of the Chamber is hearing members from the Government benches celebrating what is happening in this space in respect of this appropriation. We hear daily in this House the Government celebrating the fact that it is building 10,000 houses a year in Auckland, and we are supposed to go “Wow!” at the same time as we know that Auckland actually needs 13,000 houses per year. So the best that this Government can do—its point of celebration—is to build 3,000 fewer houses per year than we actually need. That is a failure of its policy. We heard it today from the Minister in the chair, Alfred Ngaro, and we hear it from other Government speakers every single day. They celebrate spending $300 million in their plans on emergency housing to deal with the awful homelessness crisis that has arisen on their watch.

So instead of providing the decent, affordable, safe, warm, and dry houses and services in the first place to prevent homelessness, we have a sticking plaster at the end that we are supposed to be grateful for. We heard it from the Minister in the chair today when he celebrated some worthy but incredibly tiny partnerships with community groups—10 and 20 houses here and there. They are good projects—nothing wrong with them—but we need hundreds, we need thousands of decent, affordable, social and public houses to be built in Auckland and all around New Zealand. Yet we have 3,000 fewer of those houses at this point in time than we did at the beginning of this Government’s term in office.

There is $386 million appropriated in Vote Building and Housing. Let us work through some of the key appropriations within that. The KiwiSaver HomeStart scheme, which my colleague Aupito William Sio spoke about—it is pretty incredible that while this is trumpeted by the Government, it was underspent by $11 million last year. Let us actually delve into what it does. What it provides for your average couple who might go into that scheme is up to $10,000 to buy an existing home. The average grant, as Aupito William Sio said, is actually $5,100. So $10,000, when your average house in Auckland is $1 million and, based on the loan-to-value ratio restrictions, most of those couples will need about a $200,000 deposit. Again, we are supposed to be celebrating that, according to the Government. It is a drop in the bucket. It is a token measure, when what we actually need is a comprehensive approach to solving this housing crisis, starting with Labour’s KiwiBuild plan to build 100,000 affordable homes for first-home buyers in our country.

Let us move on to the supply of land for social housing, which is mentioned in Vote Building and Housing. This was an extraordinary section of the report. Various underspends are documented in the report. This part of the appropriation appropriates $167 million. We are told that there are eight sites for building for the vacant or underutilised Crown Land Programme, but no one could actually tell the Social Services Committee where those sites were. We know from Nick Smith’s shambling efforts over the past few years that they could very well be on motorways or cemeteries—another example of the Government’s total failure to have a thought through response to the housing crisis. Instead, what we get are gimmicks to make it look like it is actually doing something. It is a total failure.

The Auckland vacant or underutilised Crown Land Programme—let me quote directly from the report. “None of the $100 million appropriation for the 2016/17 Auckland Vacant or Underutilised Crown Land Programme was spent.”—not one dollar of it spent. Instead, what we have got, about 3 or 4 months ahead of the general election this year, is another splurge of money that has popped out of the Budget to make people think that this Government is actually interested in doing something in terms of building the social, affordable, and public houses that our people will need. This record and this vote show that this Government has singularly failed over 9 years. What we are going to get after this September is a new progressive Government that will use this money to actually build the houses that people need and to stop the homeless dying on the streets of our city. I oppose this vote.

DENIS O’ROURKE (NZ First): Nothing in the Government’s projected expenditure on housing gives us any confidence at all that after 9 long years this Government has even begun to solve the nation’s housing crisis. It has done little more than window dressing in many areas, and one of those is the $1 billion provision to assist local government with infrastructure. It sounds like a lot of money, and it actually is a lot of money, but in relation to the size of the problem it is nothing more than a drop in the bucket.

As is referred to in the Social Services Committee’s report, many councils have actually reached their debt limits and are unable to take advantage of this, and I wanted to read the particular portion from it. It says: “Some of us are concerned that councils who need to access the fund have already reached their debt limits. The Minister assured us that he is aware of this matter. We heard that the bids are oversubscribed for the fund. The Government is considering alternative approaches for supporting housing infrastructure.” So it is a half-baked policy that some councils will be able to access and some will not, and there will not be enough money there, anyway. So that is supposed to be one of the things that the Government is doing to solve the housing crisis. It cannot even do that properly.

After 9 years in power, the housing crisis has simply worsened every year because the Government has failed to address the real causes. They are (1) immigration and (2) inadequate Government investment. Those are the two fundamental problems.

The Government has even blown its budget on emergency housing. It is adding another $175 million. Homelessness has doubled in the last year, from a reported 428 to 898, but that is actually only the tip of the iceberg, and I am absolutely sure that there are a lot more than that—people who are forced to live in cars, tents, and substandard accommodation in Auckland this winter, especially.

Turning to HomeStart, there is another failed policy. HomeStart is welcome enough as far as it goes, but a $102 million allocation for 2017-18 is hardly going to go very far. In the face of a problem where hundreds of thousands of young people are trying to find a home—their first home—this will cover an expected 20,000 grants, and the actual grants average only $5,122 each. This is even less than a drop in the bucket in trying to address those issues. The Government is simply not on top of it, and is not investing nearly enough in even basic programmes like HomeStart.

As I have said, immigration is not the only cause, but it is certainly one of the causes. You cannot continue to bring in a net additional 70,000 people a year, year after year, and not expect that that will make the housing crisis worse. Of course it does, and that is exacerbated by the Government’s failure to stop overseas speculators. It has not even been able to do that over 9 years. A curb on immigration and a prohibition on overseas purchases of homes is needed, and that is what New Zealand First would do.

The Government’s house building programme has not nearly kept pace with demand. Thousands of houses a year more are needed in Auckland than the Government is capable of seeing get built. At the last housing peak in the 2004-05 year, 31,000 houses were consented, but in the year ended 2012, that had dropped by half to 14,500, and it is not increasing much above that right now. So the Government has only fiddled where, in fact, bold measures have been required. Not nearly enough houses are being built or consented in New Zealand, especially in Auckland. And what has the Government done? It has sought simply to blame local government.

The truth is that the Government is not investing enough. It is not investing enough in the purchasing of housing land or in developing housing. New Zealand First would ensure that that happened. The Government is not investing nearly enough in supporting infrastructure—I have covered that $1 billion; it sounds like a lot, but it is not. It is not doing nearly enough to assist people to purchase their home and it is not doing nearly enough as far as social housing is concerned. A 37 percent increase in applications shows the size of the demand, and that is a demand that is not being even nearly met by the Government or its provisions in this Budget going forward.

AUPITO WILLIAM SIO (Labour—Māngere): Let me, firstly, thank Alfred Ngaro, the Minister in the chair, for responding to some of the questions I asked earlier, the reason being that I think the Committee recognises that we do have a national housing crisis. But also because he is the Minister for Pacific Peoples, I want to take the opportunity to really ask him about what it is that we can do for the Pacific community. In terms of the housing crisis there are two critical things for our people, for our communities: one is the low homeownership and the second is the excessive rents, which are forcing people into cars and into a homeless situation.

That is why I asked about the KiwiSaver HomeStart grant scheme, and I hoped the Minister would table the numbers that he referred to. I hope also that the Minister would give a little bit more detail about the kinds of incomes those couples provided, because $5,000 out of the KiwiSaver to go towards a deposit—and the average home in Auckland, which my colleague Michael Wood referred to, is $1 million. I will try to give you an example: a two-bedroom do-up for $500,000 still requires a $100,000 deposit, and $5,000 is 0.14 percent of that. But the figure of 500 people who have been eligible for the KiwiSaver amounts to 0.0014 of our total population.

I want to say to the Minister that I am concerned and I am worried that the homeownership rate for Pacific Islanders has been declining more rapidly in the last 9 years. In fact, last year, when I spoke to the Pacific Business Trust, I asked “What’s your statistic?”. The statistic for Pacific homeownership is 16 percent—this was from the presentation that it gave me. Whilst the Minister has every right to celebrate the millions and millions of dollars that has been allocated in the Budget to address this issue, what is unclear to me is a pathway from those millions of dollars to the KiwiSaver grant to a couple whose combined income could be $70,000, $80,000, or $90,000. How do they then buy a house? That is the first point.

The second thing is that I asked about the boarding houses, and the Minister responded. I asked also about the evictions that Housing New Zealand is doing, using meth contamination as a reason to evict people. So where do they go? Where do they go if Housing New Zealand is no longer providing the service that it was set up for—to provide help to those who cannot buy their own house until such time as they can buy a house.

In fact, Housing New Zealand was set up specifically—we had policies under the Labour Government that said that no more than 25 percent or 30 percent of one’s income should go towards the rent. But we know from the reports that have been provided to this House from statisticians and reports from organisations outside that many working families—many working families—are now spending anywhere from 50 percent to 70 percent of their incomes on rent alone. Families cannot sustain that long term. When I asked about it, the Minister celebrated the fact that we are getting one—one—Pacific home provider, which will provide 21 rooms, or 21 beds; I cannot remember.

Minister, I want to say to you: yes, you have every right as the Government, with the powers that you have now, to celebrate that. But here is the challenge—I know that you know how difficult the situation is out there, and our communities cannot be condemned to live in social housing. Our communities cannot be condemned to live in boarding houses. Our communities cannot be condemned to be brushed off to live in garages and cars, and to say that that is normal and that is acceptable—it is not, Minister. It is not.

That is why I think that you now—you have the ranks of power. You have got both of your hands in the pūtea. Show the pathway. How real is it, from the millions of dollars that you celebrate in this Budget, from KiwiSaver into homeownership, and from rental accommodation and support into homeownership, because despite all those millions of dollars, why do we still have a national housing crisis? Why are there people still increasingly in a homelessness situation? That falls squarely at the doors of this Government, and certainly in the front door of your office, Minister.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chair. E ngā mema o Te Whare nei, tēnā tātou katoa. I am pleased to take a call on Vote Social Housing for Minister Ngaro’s information. I want to focus on this part of the debate on the Estimates for 2017-18: Vote Social Housing. Specifically, I want to talk about three issues: homelessness; the social housing register, particularly the waiting list for social housing; and, if time permits, emergency housing and the purchasing of social housing in so far as income-related rent subsidies are concerned.

When I looked at this particular vote and what the Social Services Committee reported back to the House, I was looking for some innovation—some kind of fresh ideas around this Government’s so-called commitment to addressing the growing homelessness in this country. I was looking for that, and when I looked at this report—I will take the Minister in the chair, Alfred Ngaro, through the committee’s report to raise some questions, and maybe he could answer them—what I found was anything but innovative, caring policies to address the burgeoning, growing population around this country in terms of homelessness. I want to say that in my electorate, in one of my four electorate offices in the Hawke’s Bay, my office has dealt with 70—70—homeless families in this year alone. Not seven, not 17, but seven zero—seven zero—in one electorate office in the first 6 or 7 months I think is an indication of your complete failure in your policies around dealing with the issue of homelessness.

Let us look at what the Minister said when he was examined by the select committee. I want to acknowledge that this is a new vote, and even though we are talking about $2.2 billion, Minister, you clearly have taken money out of the Ministry of Social Development and Vote Minister of Social Housing. So to me that implies that there has been some thinking in the background by those two respective ministries to inform the Minister: “We have to bring this out.” I have got to give you the benefit of the doubt. And so when I look at what has been done here and I look at the areas that this particular vote is addressing, you actually come up rather short.

Let us look at homelessness. You say that we have got 898 identified in 2017. We all know in this House that 898 people identified as homeless is so far off the mark it is not even funny. My question to the Minister is what process he goes through to identify homelessness. The Minister himself—actually, in the report—said these figures may not be accurate. The Minister, in this report, actually says this figure of 898 may not be accurate. Oh, well—there you go. There you go. There is this commitment from this Government, which actually did not know whether this figure of 898 was accurate, in the committee’s report.

Social housing—I want to talk quickly around social housing and talk about the register. It is my experience with the 70 whānau that have come to my Hastings office that a lot of them do not even get on the social housing register. If you are in a cramped one-bedroom or if you in a car, as far as Work and Income is concerned you have got a house—you have got a house. That is how it is determining whether you actually get on the register. If you are in a cramped situation or, worse still, you are in and out of social housing with somebody in an overcrowded situation, as far as Work and Income is concerned you are housed—you are housed. So the social housing figure that you have got here really needs to be tested. You also talk about priority A candidates, actually suggesting that you will house people—this is your target—in 50 days. That is what you are saying—50 days. But hold on, it gets better, because further down it says by 2021 we will reduce the waiting by 20 percent—20 percent. So instead of waiting 50 days you are going to wait 40 days, and we should be happy about that. That is the message that this Government is sending, but you have got to wait till 2021 before we reduce it from 50 days to 40 days.

I will just flag that I am going to look for another call. I am going to talk about emergency housing. In the report back to the House under emergency housing, the Minister, in terms of using his own figures around targets in terms of the emergency housing commitment by this Government—we have heard the stories in this House, and I want to particularly acknowledge Te Puea Marae. In the heart of winter, in the kindness of those people’s hearts, they opened their doors last year. It was only a temporary stop, but they got full straight away. And they had no plan to do it this year, but here we go again—Te Puea Marae is opening its doors again to address homelessness in Auckland. Again, I come back to the Estimates. Where is the pūtea for places like Te Puea Marae to support what this Government has absolutely failed in providing—emergency housing?

I then want to go down, Minister, to the purchasing social housing component of the report. I want to talk about buying motels—buying motels. If there was ever a cop-out for progressive policies around housing, is buying motels not it? Buying motels is not sustainable. It is not sustainable, but this is what this Government wants us to believe: it is making a difference by putting our people in motels. So I need to ask the Minister where his long-term plan is. What is clearly not evident in the Estimates that we are debating in this Committee is a caring government, a kind Government that has the best interests of our most vulnerable people out there in the country at heart. Clearly, under this Social Housing vote, it is not evident.

Worst of all, when we come to income-related rent subsidies, I notice there is $8 million unallocated. The Minister in the chair may want to tell us why, in an area, social housing, that I know is hugely under-resourced, he has got under income-related rent subsidies an $80 million unallocated fund. Maybe you could tell us there is some special project that you have got in mind, but I think this Committee particularly needs some assurances from you that this is not going to be carved off as savings down the track. I would like the Minister to actually talk about that.

I opened this contribution saying that I was looking for some innovation, some long-term planning from this Government around social housing, and it is clear in Vote Social Housing that it falls well short. I say that because in my electorate of Ikaroa-Rāwhiti, and particularly in the Hawke’s Bay area, there is a group of well-intended community people—counsellors, people working with the homeless, the people of the local churches—who have got together in an organisation called Community Housing Action Team. They are fed up with this Government. They are fed up with this Government for non-delivery of quality social housing for all New Zealanders. This active group of people from the Hawke’s Bay, from the Napier area, and from the Maraenui has got together and said enough is enough. Come Sunday, at 2 p.m. there is going to be a public rally at the sound-shell in Napier, and it is happening because this Government has failed to hold up its end around good quality social housing. There are people in our community who currently work at that level—at the coalface—and they said enough was enough. So at 2 o’clock on Sunday at the sound-shell in Napier a public hui is being called because the people of Hawke’s Bay have said: “We’re over this. We’re over working with this Government. We’ve got to take back our country. We’ve got to take back Hawke’s Bay and say that we want decent housing in this country, and we’re going to tell you how to do it.” Kia ora tātou.

MOJO MATHERS (Green): I rise to take a call on the social development Estimates. I would like to follow on from and pick up on a point from my colleague Jan Logie about the inhumanity of the target of reducing people on benefits by 25 percent. Why do I say that? Because a huge number of people on benefit have disabilities or are deaf or have major challenges in accessing employment.

It is all very well to say “Oh, we’ve got this target.”, but if you do not have the reality of our lived lives, of these challenges that are faced by people who are disabled in accessing work, you will not get to where you want to be and will not recognise the absolute cruelty of forcing them to apply, time and time again, for jobs that they know they are not going to get and they know they are not going to be offered.

Just a few weeks ago a young man who is profoundly deaf and who really wants to work and is very skilled applied for 50 jobs. He did not get a single offer of an interview. So he went to his CV and he took off his CV that he was deaf. He immediately, the next day, was contacted for three interviews. That is the level of attitude and discrimination out there by employers: if they just know that someone might be deaf, they will not even give you a foot in the door. That is the reality of the challenges.

So what did the Minister say? She said: “Oh, some employers are reluctant to take on workers with a disability or health condition.” No kidding? They are. But to help, there is now a telephone hotline for employers who need advice about their workers. Well, that assumes they have already got into the employment force. The reality is that hotline is not going to address the problem. The problem is much more structural and much more systemic and is going to require much more intensive affirmative action to get people into jobs who want them.

So instead of forcing people to apply time and time again for jobs that are not there for them, how about supporting them to be well, to be healthy, to gain the skills and the confidence that they need, and not force them into multiple rounds of rejection, which destroys self-esteem, which destroys confidence and belief in oneself, and absolutely just say: “We will help you apply for this job that suits your skills.”? One reason why certain people are coming back on to benefits after being forced into jobs that do not match their abilities and skills is that, actually, they are getting sick. Their mental health is at risk. They cannot do the job, because they have been forced to apply for jobs that do not match their skills or abilities. There is no point being forced into fruit picking if you have got asthma and poor health and you are going to be out in cold conditions. That job does not match your health condition and skill. We need to stop propping up this myth that jobs are available and it just requires forcing people to apply for enough jobs to get there.

That is not the case, and the frustration and the humiliation of being told time and time again that you are not doing enough fails to recognise the real barriers that are there. And there are also major barriers in just accessing the services at Work and Income New Zealand (WINZ) for people who are deaf. They cannot just ring and make an appointment easily; it just does not work like that. If they are told their benefit is cut, they do not know how to access the support they need to find out why their benefit is being cut, because every step of the way is harder.

They often cannot compete even for rental housing on the open market. For a deaf person, if they are trying to pick up the phone and ring up the property manager and say “Can I apply for the rental housing?”, they cannot even get a foot in the door. That is why deaf and disabled people are so over represented in these poverty statistics. We do not get a fair chance. The Government really needs to recognise that and start with looking at the accessibility of its own services and the culture at WINZ to be more inclusive, to be more understanding and supportive.

STUART SMITH (National—Kaikōura): It is a pleasure to take a call on Vote Social Development and Vote Building and Housing. I would like to start with social development first, because it is a great pleasure and an honour to be involved with Oranga Tamariki, which has $434 million from this vote going towards that process. I was also involved with the bill going through the Social Services Committee and it was a phenomenal piece of legislation, I believe; a major step-change in the way we look after the most vulnerable tamariki. I think it is phenomenal to back that up with such a large vote, of $434 million.

What came through very clearly through all of the submissions on that bill was that a major change needed to happen, and it was not any good just fiddling around the edges. In order to make that change, of course, requires a large investment, which Minister Tolley made a successful bid for and that came through in the vote. So I would like to congratulate her on that.

I guess the centrepiece of the whole Budget, really, was the $2 billion Family Incomes Package, particularly Working for Families and the accommodation supplement, but also the tax bracket changes, or tax thresholds. Bracket creep is something that has been building up for some time; to make that major change is a really good reset for that tax system. And that benefits everybody, because we all pay tax. So I think that is a phenomenal step forward for our economy, as well.

I would also like to touch on social investment, $320 million—$321 million, to be exact—going towards the social investment approach. Yet again, it is another completely separate or new way of looking at things, because we are relentlessly positive over here. When we are looking at social investment, rather than saying “Let’s just put more money in the vote.”, we are saying “Let’s target things in the vote that are going to make a difference.”—a material difference to people’s lives—and get around the people whom we can identify through the data that is now available, to identify those who need it most and put those wraparound services around those young people, in particular, and get ahead of the problem. Too often, all we have done is throw money at it and think that the best way to be a good Government is just to hand money out to people—

Matt Doocey: Willy-nilly.

STUART SMITH: —yes, willy-nilly—but we are not taking that approach at all. The Ministers in this sector are relentlessly positive. They have stepped up and made a big change in the way we think about social development, and I think that is to be applauded.

I would also like to touch on what was mentioned before by the previous speaker, Mojo Mathers, about jobs and how hard it is to get jobs. Well, I would actually challenge that. We have, in fact, the highest labour force participation rate that we have ever had and we are among the highest in the OECD. I think that is something to be applauded. Today the unemployment figures came out—down to 4.8 percent. That is a phenomenal achievement. We still have people who are unable to get jobs, for lots of reasons. It is not because there is not the work there—there certainly is—it is because they have all sorts of issues going on in their lives, and that is where we are going, through this social investment approach, among others, to help those people get jobs.

I would like to talk about the 3K to Work programme. It was just announced today that 1,200 people have been supported off benefits in the last year and into work. The best way to help those people is to help them help themselves, or enable them to help themselves. I know from being a former patron of the work scheme that goes through the military that it has been phenomenal to see how those people—their heads go up, it completely changes their lives, they feel a lot better about themselves and their families, and everybody benefits from that.

I would just like to finish by saying that a fresh approach is what has actually come this way. We are relentlessly positive over here, and it is a great pleasure to have taken this call.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe e Te Heamana o Te Komiti. When looking at the Estimates for Social Housing, one thing does occur to me: we definitely have a housing crisis. And not only do we have a housing crisis but from what I can see in the committee’s report, we are not really having the answers to address the crisis that is facing us. Within my electorate, the No. 1 issue that constituents come to my office for is housing.

First of all, I want to talk about homelessness. Homelessness exists in places like Wanganui as well. I know that one of the local camping grounds is where some of our homeless people are sent, to go and live at the camping ground. I want us to think really carefully about the impact on children growing up in those circumstances, because that relates directly to Vote Social Development as well.

We can talk about $400 million, as members opposite have, but think about this: we are also giving the top 10 percent of earners in New Zealand the same amount of money that we are going to give to vulnerable children and the issues that they have. I think that in this House we should think again and think about why we are not giving that $400 million that we are giving to the top 10 percent of earners in New Zealand—that we make a real difference in the lives of children. They are children who are growing up without homes of their own, and growing up in garages and cars in cold weather like we have around the country this week.

I feel really sad about the people who come to my office, and I cannot really help them. All I can do is try to give them a sense of hope that in 55 days we might have a change of Government, so that we have a Government that actually cares about those people and cares about putting policies in place that truly do help them.

What we have here in Vote Social Housing is not enough. If one goes through the Budget and sees how much money has been allocated for emergency housing, it does not take a mathematician—and I am certainly not a mathematician, but I can certainly add up and work out how many houses can be provided for that amount of money, and I can tell the House it does not add up. It is not enough. I say to the House—I can hear those bells going—imagine if you are living in cold, damp houses. When the alarms go off, you know, that is a warning for all of us, actually. Maybe that is why those bells are going off. I hope—

The CHAIRPERSON (Lindsay Tisch): We are just checking what that is—whether it is a fire alarm or not. Carry on, though, please. [Interruption]

ADRIAN RURAWHE: Ha, ha! Thank you, Mr Chair. Thank you very much for the warning.

I also want to talk not only about those who are living in crowded conditions and needing emergency housing—and, clearly, this Budget will not provide adequate answers to address that issue—but also about the Estimates for Vote Social Development, and in particular the part about helping unemployed youth into work. Boy, have we not got a huge job there. Depending on whom you believe, it is 90,000 or 70,000. Whatever figure it is, it is too high and we need to be doing more.

One thing that occurs to me, in looking at the report, is that it is too little—not enough. They are quite boutique kinds of programmes that do not really address the long-term issues facing rangatahi. They deserve better.

JONO NAYLOR (National): The extent of what there is in this particular section of the Estimates appropriations this year for this sector alone could occupy, I believe, the entire debate. There is so much going on in this space. With this Government, based even on the last couple of years, you would think is it even possible to do more than put benefits up for the first time in 43 years. Is it even possible to do more than what we have done? But wait—but wait—there is more, and we have done it.

There is some great stuff going on in here. Other members have touched on it, and I will touch on it again. What we have seen in the last little while, with the complete overhaul of Child, Youth and Family and the forming of new Ministry for Vulnerable Children, Oranga Tamariki, was a big step made by the honourable Minister Anne Tolley. I think that what we are going to see are much better outcomes for those young people who are most at risk in New Zealand. We would all agree that the outcomes that were being achieved were not acceptable, and so drastic steps have been taken to completely overhaul this, and, of course, there is budget to back this up.

I think one of the really important parts of this was actually the raising of the age of care, from 17 years of age to 18. I know that as the Social Services Committee, we have heard from various people over the years, and I think in particular of some young people from the Dingwall Trust who came to us and spoke of their experiences as 17-year-olds of being exited from care and having to suddenly fend for themselves and do a whole lot of things for themselves. They were, basically, pleading with us to raise the age. The Minister has taken that on board, and so out of the $434 million in the package for new funding for Oranga Tamariki, there is $71 million around ensuring that we support young people who are in care, not just until the age of 17 but, now, until the age of 18. Also—it is a little bit like one of those ads on TV that says “But wait, there’s more.”—there is the possibility for young people to receive further care beyond the age of 18, to 21 and even to 25 in some cases.

This is a Government that is prepared to look at where the system has not been doing the best for these young people, to respond to that—not just tinker with the edges but take the bold steps forward—and to do something completely different to ensure that we are looking after those young people. It is a continuation of the social investment strategy that this Government has been working to.

I hear from across the other side of the Chamber from time to time, and I hear around the place, that this Government is just driven by numbers and just driven by data. Data can tell us certain stories, and, actually, if you just ignore the data and say that it is just numbers, well then, that is just being blind. Actually, we do attach a meaning to those numbers, and what we have been able to determine through taking this social investment approach to it is that if we can get some early intervention in place and if we get to some of these children at an earlier stage, yes, there is money to be saved in the long term, but, actually, there are also greater benefits for them in the long term. So in this Budget there is $321 million as a part of the Social Investment Package. That is just the money that is associated with some of those particular initiatives, but, of course, it reflects the entire strategy that goes right across our communities.

Finally, I just want to touch on the $2 billion Family Incomes Package, and I keep hearing from across the other side of the Chamber: “Oh, this is just tax cuts for the highest earners.” That is not what this is about. What this is about is changing thresholds. It is about ensuring that more New Zealanders, and particularly lower-income New Zealanders, get more of their own money back to be able to provide for their families. Whether it is the redistribution through the, ah—

Hon Member: Working for Families.

JONO NAYLOR: —Working for Families—thank you—which is part of it, or whether it is actually just lowering some of those thresholds, some of those people who are on the fringe of earning not quite enough will now get that extra money. It was heartening to see, when this Budget was announced, those people on the news saying what a difference it will make to their families. I look forward, over the next 12 months, to seeing the benefits that those people will reap from this Budget.

POTO WILLIAMS (Labour—Christchurch East): I have got a couple of areas I want to talk about. The first area I want to talk about is family violence. The Minister for Social Development, when questioned about the response to family violence services and funding, talked about a programme that is being piloted in Christchurch and in the Waikato called Integrated Safety Response. It is a great programme. It involves about four statutory agencies—Police, Corrections, Oranga Tamariki, and some community agencies—and it looks at helping families to navigate their way through the family violence support services and set up a real plan for them to start to lead safe lives. The difficulty is that the funding for this pilot programme has come out of existing funding for family violence services, and why that is difficult is that this particular programme is not cheap. When you look at the intensity of response that is required within this programme, it is pretty good. It is gold standard—it is not cheap; it is expensive, and it has taken resources away from other services in the sector.

So there is no new money, but there are new programmes. The report of the Social Services Committee on the Estimates for Vote Social Development states: “In the next Parliament, the Minister would like to continue the development of broader changes to family violence services. She would like to have a framework for that in place by the 2018 Budget.” But she also says that there is no extra funding for services such as Women’s Refuge to carry on with their business-as-usual work. Between 33 and 39 percent of woman experience physical or sexual violence, and in 1996 a researcher called Suzanne Snively actually estimated the cost of family violence as somewhere between $1.2 billion and possibly $3 billion—20 years ago. Women’s Refuge actually gets about 60,000 inquiries in a year, and that is on top of the 110,000 police call outs to family violence incidents—41 percent of police work is in family violence. It is a huge cost—huge cost.

For the last 9 years of this Government there has been no real increase into the community response for family violence, and the Minister says no real cost to the community response for family violence. I am talking about the NGO response, and the Minister says she is not going to do anything until the 2018 Budget—10 years of no real increase.

Hon Nicky Wagner: That’s not true.

POTO WILLIAMS: Do you want to put that on record, Minister? There will have been no increase to the NGO service in terms of real funding for 10 years by the time the Minister gets around to doing it in 2018.

And what does that mean for our people? What does that mean for people who experience family violence, and what does it mean for those women and men who are in services to change the behaviour of offenders, to support children who live in homes where they witness and experience violence, and for women who are victims of violence? I am not talking about the top 1.5 percent that might be going into Oranga Tamariki or into other services like that. I am not talking about those people to whom a lot of this funding has been reallocated. I am talking about those people for whom we can actually make a difference if we engage with them early and we provide sustainable and effective community responses, but these services are being starved by this Government, and they have been for the last 9 years. It looks like, by what the Minister is saying here, they will continue to be starved.

That is not what we call delivering for New Zealand. That is not what we call delivering for New Zealand, and I am here to say that I want the people of New Zealand to realise that this Government is actually bleeding money out of systems and services that would actually support them to get to much safer lives. We will not be supporting this Budget appropriation.

ANDREW BAYLY (National—Hunua): Before I start, I do just want to congratulate Jacinda Ardern and Kelvin Davis on their promotions. It is a pleasure to be speaking in this Estimates debate, and I want to start this discussion just talking around the announcement that occurred today, which is the announcement that New Zealand’s unemployment rate is 4.8 percent. The reason I make that start is that, of course, getting New Zealanders into good jobs, paying jobs, with all the pride that comes with it and with all the security that comes with it, is actually essential in terms of trying to get people to buy their own home and establish their families over time. That is why it is so crucial that we have a successful economy where everyone can participate.

In terms of the housing policies, which I would like to talk about, obviously it falls into three areas: first is emergency housing, second is social housing, and the third is that broad category of market housing, if I can use that term. If there is any assertion that this Government is not concerned about the most vulnerable in this society, then I have got to say to you that that assertion is totally incorrect. This Government, this year, will spend $2.3 billion helping over 310,000 families in need with their social housing and housing needs. We are committed to helping people, and the Budget that was just announced was very substantial in terms of some of the new initiatives. For instance, already we have committed $175 million to emergency housing, to be spent over the next 4 years, another $155 million towards emergency and transitional housing—in total, just over $300 million.

Also, other initiatives—and I would just like to highlight the one around Te Puea Marae, which some members have referred to earlier tonight. We welcome the initiatives and the support Te Puea Marae have made and continue to make, but I would just say to you that the Government has now stepped in to assist them, work alongside the marae, and provide wraparound services for those people who want to access housing support and all the social supports that go with it. In fact, there are five relocatable houses on that marae as we speak.

I just also want to draw attention to the tax matters that have come through in the Budget. We have had the Family Incomes Package, and some of my colleagues have highlighted it; the changes in income threshold, which mean that all New Zealanders who pay tax will benefit, particularly the poorer members of our society; the increase in the Working for Families package, which is quite substantial depending on the number of children—it could be anywhere between $9.60 and about $24 or $25 per child—and, of course, the substantial increase in the accommodation supplement, which may in fact be as much as a hundred dollars per week, depending on the circumstances of the family in need. It is very, very substantial.

One of the speakers earlier referred to the issue of P. Members may be aware that I put forward a member’s bill on this very issue. The big issue around P is that we did not have clarity, in terms of testing companies, on what the appropriate methodology was. There was uncertainty around the actual level of contamination. Thirdly, we did not know or have a mechanism to ensure that if a house had been decontaminated there was a methodology for approving or assessing that. I was slightly alarmed that some members do not seem to be up with the play and do not know what is going on, so I just thought I might take the opportunity to remind some of our members that progress has been made. The main thing is that the standards committee has reported back, and we have adopted a higher rate, rather than 0.5—

The CHAIRPERSON (Lindsay Tisch): Order! This is not part of this sector debate. You must bring it back to the sector that we are debating. That is very wide of the debate.

ANDREW BAYLY: Thank you. I will just finish off my time around the issue of how we get new people into housing, how we get our first-time people into housing. As the Prime Minister noted today in question time, 27,000 people have already benefited from the HomeStart loan package, and we intend to get 90,000 people accessing new homes over time.

JENNY SALESA (Labour—Manukau East): Kia orana koutou katoatoa. Happy Cook Islands Language Week. Thank you so much for this call on the appropriations bill as it deals with the social development and housing sector. The areas that I would like to talk about—and I can see that the time is going to run away on me—are homelessness, waiting lists for social housing, boarding houses, and emergency housing.

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

JENNY SALESA: Kia orana koutou katoatoa, and thank you, Mr Chair, for this opportunity to speak on the Appropriation (2017/18 Estimates) Bill as it relates to social development and the housing sector. But before I do, may I just take a moment to congratulate Jacinda Ardern, the new leader of the Labour Party, as well as Kelvin Davis, our new deputy leader. I look forward to working under both of them for a better and a fairer New Zealand.

This National Government claims that it is working to build a better future for New Zealand, and the Associate Minister for Social Housing, the Hon Alfred Ngaro, earlier on stated that it is his intention to focus on addressing the challenges of housing and delivering for all New Zealanders. Well, I can tell you that right now this National Government is not delivering for all children and for all families in Manukau East in South Auckland. This Government’s policies and its Budget is not working for all of our children and families in South Auckland, and, as it relates to this bill, I would like to talk about homelessness, waiting lists for social housing, boarding houses, and emergency housing.

I will start with homelessness. We know that homelessness is a big issue for New Zealand. The University of Otago tells us that we have over 41,000 people who are homeless. But can I talk about my office. When I became a member of Parliament 3 years ago we were dealing with approximately 20 families who were homeless in any one week. But today, only 3 years on, that number has tripled. We are dealing now with 60 homeless families. Just today three homeless families came through my office, and I will give you just one example of one particular family.

Both parents are working full time. The father works for 60 hours a week. The mother works too. They have three children. They do not qualify for assistance from the Government, and what this family has done is they have put their three kids with relatives; they are couch surfing while the parents are living in a car. This is not a situation that anyone in this Chamber should be proud of—the fact that we have too many of our families who are homeless and cannot afford the rent.

One of the reports that the Ministry of Business, Innovation and Employment did just a few months ago was the housing affordability measure. According to the Government’s own report, the least affordable area in this country is Manukau ward, which is the area that I cover in Manukau as well as Aupito William Sio in Māngere. This is one of the most socio-economically deprived places right now in Aotearoa New Zealand. How can we be proud of that?

When this Government in its Budget says that it is putting aside millions and millions for emergency housing, putting our families into motels, I can tell you that in Manukau ward we have over 110,000 people who are already living in overcrowded conditions, and when we put families into emergency accommodation, that usually means motels. That usually means that you have four to six, and sometimes more, from one family living in an overcrowded room for up to 3 months at a time. That is not something that anyone in this Chamber should be proud of, and the fact that rent is so unaffordable, and the fact that we are not building affordable houses for our families to move into, but instead we are selling off our social houses and our State houses—that is also not something to be proud of.

When we look at this report and it tells us that there are 3,400 people who are priority A on the waiting list for social housing, that is also not a number to be proud of. We know that there are over 5,000 who are on the waiting list for social houses. But can I say, this is a Budget that I do not support. We should be caring much more for our families. Thank you.

Votes agreed to.

A party vote was called for on the question, That clauses 1 to 10 and schedules 1 to 5 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.

Clauses 1 to 10 and schedules 1 to 5 agreed to.

Bill to be reported without amendment presently.

Bills

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

In Committee

Part 1 Amendments to principal Act

Hon RUTH DYSON (Labour—Port Hills): It is a very pleasant surprise for me to take a call on this bill. In order to contribute most constructively, I have to say that at this stage of the debate, which is the Committee stage, I have heard only the first reading and the second reading because I was not part of the select committee. It seemed to me that there were a number of questions—well, given that there seemed to be quite a lot of cross-party support for the intention of it, there were a number of questions that will be answered.

I am not sure whether the current Minister in the chair, Judith Collins, is the Minister who is actually responsible for it. But, given the reputation of the Minister who is the chair, I feel obliged to say that I think she will take responsibility for answering as many questions as she can, regardless of whether she is actually responsible for this legislation.

One of the first questions that I am really interested in asking is: why has it taken this long? This bill seems to have been before the House for a lengthy period of time, and I do not know why it has always dropped down the priority list. The select committee made a number of amendments to the legislation, and I am really pleased to see the way that it had quite a robust debate. From the report that is before the Committee now, it seemed to have quite a robust debate but also quite a degree of consensus that we wanted to get this right. This is legislation that is not party political, in any sense of the words, but I think that there was a genuine willingness. So I want to acknowledge the members of the committee—I cannot even remember what committee it went to now. But I think—

Jonathan Young: Law and Order.

Hon RUTH DYSON: It was the Law and Order Committee—thank you. That is one of the committees that I think is being merged into another committee in the restructuring. It is going to go into the Justice and Electoral Committee, I think, in the post-election restructuring of our select committees. I want to commend the committee for what appears to be the very good work that it did.

Some of the issues that are dealt with are the provisions covering the operation of lawyers, conveyancers, accountants, and real estate agents—quite a broad range of areas, but areas where there is a lot of public engagement with those individuals. I have to say there is a fair amount of trust required with the individual citizens who are dealing with those people. Most of us when we deal with a lawyer or a real estate agent or an accountant put trust in their profession and say that we are going to be protected by their standards, qualifications, and ethics. This bill, I think, goes a fair way towards progressing the level of trust that we can have in it.

I think the Minister who is actually responsible for the bill, the Hon Amy Adams, is now in the chair and, again, I just want to commend her for being a Minister who has—as with the previous Minister who was sitting in chair, the Hon Judith Collins—a reputation for actually listening to members’ contributions, not always as carefully as they might deserve, and actually answering the genuine questions that are raised.

So as I said at the start of my contribution, this is a bill that has had rigorous consideration by the select committee. It has come back to the House in a better state than it was presented in. It has taken far too long to get it to this stage, but it has got a wide degree of support. I do not imagine that the Committee stage of this legislation is going to take a lot of time, but I would like the Minister to address the first question that has been raised in this debate, and that is: why has it taken so long? It has been pushed down the Order Paper, time after time after time. If the issues are as serious as the commentary from the committee and the comments from the Minister would indicate, then you just wonder why other legislation such as racing amendments or statutes amendments—which do not change any policy—or statutes repeal legislation, which we have recently had, actually have to take such a lot of time.

So I support the legislation. I pay tribute to the Minister for introducing it but, more importantly, to the select committee for progressing it. I look forward to the debate and also to the Minister responding to the questions that are raised.

MICHAEL WOOD (Labour—Mt Roskill): I am very happy to take a call at this Committee of the whole House stage of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. The bill is finally starting to make some speedy progress through the House. Of course, we had the second reading yesterday, which a number of us participated in. We are now moving on to the Committee stage. But, of course, the point that my colleague the Hon Ruth Dyson made is a very, very valid one, which is that the main concern of the Opposition is that we have been so tardy in actually progressing this bill. The reason that is of import is because this goes to the reputation of our country.

There was a major media investigation into this area last year by Matt Nippert of the New Zealand Herald, which revealed that there is approximately $1.6 billion of illicit funds flowing through some of the entities that we are finally catching up with and including in this legislation. So the Labour Party’s view on this legislation is not so much that there is anything wrong with it, but that we should really have been progressing with this much, much faster. When John Shewan produced his report, which came out—members of the House will no doubt remember the Panama Papers landing in New Zealand in early 2016, where we learnt through the efforts of investigative journalists that billions of dollars of dark money is floating around our world, stemming from the drug trade, from criminal enterprises, and sometimes from arms dealing. They look for places to hide this money.

One of the things that Mr Shewan found is that one of the chief areas that the money goes into is the real estate sector in New Zealand. If members get the opportunity to read the very excellent piece by Matt Nippert in the Herald last year, he points out that the real estate sector is such a target for it is because, of course, we initially acted on trusts, but when you do that you, effectively, shift the incentive to put the dark money into the areas that you have not acted upon. Real estate is one of those areas, and, of course, there is a double whammy with real estate in New Zealand in that you can hide the dark money but you are also potentially in line for a big fat capital gain coming out of that.

We absolutely support the intent of this legislation. It is about bringing those sectors that were left out of the stage one reforms into the ambit. What it means is that there will be an obligation on people in those sectors to ensure that there is a level of reporting of suspicious transactions, and also that there will be a level of protection for those people who might make disclosures about suspicious transactions that are happening in this sector. So we are looking at real estate, we are looking at the New Zealand Racing Board, and we are looking at certain other high-value sectors—places where this money can be put.

If we want to look at some of the specifics, there was some reasonably good work that was done by the Law and Order Committee, just in response to some of the submissions and also through the process of working through the legislation and making sure that it is as effective as possible. One item I just want to touch on briefly are the changes made in Part 1 of the bill, on page 6 here, to clause 5(1), where there was just a bit of clarification in terms of the definition of “accounting practice”, where it was pointed out in a number of the submissions that we needed to make sure that we were including accountants who were in a partnership with one another as well. There are a number of these changes that the Labour Party supports. They were just very pragmatic, very sensible, about tightening up the legislation.

The point I want to make on that is that when Matt Nippert did his report early last year, he pointed out that when the police gave advice about this issue, they found that in 26 percent of the cases that they cracked open where there were assets coming out of organised crime, there were complex arrangements put together by lawyers or accountants. So we are talking about huge values of money, every year, coming out of illicit enterprises, and the criminals, the people who are bringing this money in through illicit means—these are not guys who just stuff a bit of money under the mattress; these are people who go and get smart lawyers and smart accountants to tuck their money away.

That small change in clause 5(1) is a good example of the select committee doing its work and just making sure that we are tightening the legislation as much as possible to make sure that we are not leaving it open for it to be exploited by those lawyers and accountants who will no doubt, in some cases, still be looking for ways to get through the legislative net that we are trying to knit here. I will leave it at that. I am sure there will be many other calls taken by the Labour Party on this bill. We support it, but it has come later than it should have.

BARBARA KURIGER (Junior Whip—National): I seek leave to take all parts and clauses of this Committee stage as one question.

The CHAIRPERSON (Hon Chester Borrows): Leave is put for that purpose. Is there any objection? There appears to be none. I just need to restate the question. The question is that Parts 1 and 2, schedules 1 to 3, and clauses 1 to 3 stand part.

Parts 1 and 2, schedules 1 to 3, and clauses 1 to 3

FLETCHER TABUTEAU (NZ First): I want to go straight to “Suspicious activity reports”, new Subpart 2, inserted by clause 18, in Part 1, and speak to the issue in the Committee and ask a few questions of the Minister of Justice, because this was one of the areas of great concern for a number of people and submitters—the question around suspicious activity and the reporting of it—because what we did not want to do was have an obligation for entities to report information and put too much of an onerous requirement on those entities and have such a high burden of cost in terms of compliance. But then, on the other hand, we know how big an issue this is, and we could not let aspects of, you know, this kind of darker society, as it were, be left to their own devices and continue to use transactions which we know, and we have seen overseas—there do not seem to be too many examples in New Zealand, but we know that they must be able to do it here.

By way of specific explanations, we are talking about the means and activity that is carried out by a reporting entity where the reporting entity has reasonable grounds to suspect that the transaction or proposed transaction, the service or proposed service, or the inquiry, may be relevant, and it talks about prosecution of a person for money-laundering, the Misuse of Drugs Act, the Terrorism Suppression Act, and the enforcement of the Proceeds of Crime Act and the prosecution of an offence within the meaning of the Crimes Act.

So the obligation, therefore, is around suspicious activity reporting. At this stage—I will stand up later to ask questions of the Minister—what I think we have achieved here is kind of a middle ground, where you do have an obligation on entities to report what they see as suspicious activities without the onerous requirements of continuous reporting or submissions to appropriate Government departments on a process that can be incredibly onerous. The flip side of that coin is that it is still a reasonably low transaction mark. I would be interested in the Minister’s comments on the burden that that puts on genuine money transfers, especially in the Pacific, relating to, for example, family members here, working in New Zealand, sending money back home.

I am hoping that the Committee comes to a consensus on the values used in this legislation. You will forgive me but I cannot find the dollar value right now. What we are looking for in this conversation tonight is a consensus that the dollar value is right, and then that those transactions under that dollar value will adequately be caught in the suspicious reporting activity.

I just have a point, Minister, on new section 40(5) in new Subpart 2 of Part 2—“A high-value dealer may report a suspicious activity to the Commissioner.” It kind of seems really vague. Why are they reporting directly to the Commissioner of Police? Why have we suddenly gone away from the definition of the suspicious activity?

So just a point of clarification there. Everything else is laid out as you would expect and is well worded. Then we come to that Part 5. It is kind of out there and a bit ambiguous. But I will come to further questions in my next contribution. Thank you.

BARRY COATES (Green): Tēnā koe, Mr Chair. Thank you for calling me in this short call on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. I would echo the question that my Labour colleagues have asked, which is why it has taken so long for the bill to get to this stage. In 2009 we had phase one of this legislation. It has been known for quite some time that the financial institutions captured under phase one were not the only parts of the economy that were engaging in money-laundering.

I refer to the report of the Financial Action Task Force, which really brought New Zealand’s reputation into disrepute. We were struck off the EU’s white list of countries, which imposed additional costs on our business and sullied our international reputation. We have had the foreign trusts scandal, investigated by Mr Shewan. In his report he called for far greater transparency. We think there is still a missed opportunity in that that transparency has not been included in this legislation around the beneficial ownership of foreign trusts, which would have been a great improvement.

However, that being said, and even given the delays in this legislation, the Green Party is strongly behind it. We are strong supporters of cleaning up this dirty money that has flowed into our economy, and of cleaning up particularly the incidence of money-laundering in real estate, which we believe is complicit in the run-up of house price speculation in Auckland and other cities.

We have supported this bill through the committee process. We have asked many questions. We have, I think, made some improvements, together with officials and committee members. We are broadly satisfied with the direction that the bill has gone in. We, however, have a number of specific questions.

One of those questions relates particularly to the issue of privacy. We heard from the Privacy Commissioner that there were particular concerns in the draft legislation about a broad concept of privacy. We had, in response, a tightening of the provisions related to privacy. We still have some concerns that privacy provisions do not go far enough in terms of protecting private individuals under this legislation, and we will come back to pointing out exactly where that is concerned. We indicate that we also have some concerns about the clarification of procedures for client privileged information, and we will be raising some questions on that. As I have said, we have some concerns about the non-inclusion of a registry of beneficial ownership.

With that said, we will be supporting the bill. We hope that these questions will be answered, and particularly that we will end up with legislation that provides a basis for action. I think the lesson that has been learnt from the UK in its implementation of anti - money-laundering legislation is that the legislation provides the basis for countering money-laundering, but far more than that is required. It is a culture change that is required and it is the proper resourcing of policing services and intelligence services, which would actually complement the legislation itself. We hope that the Minister will give us assurances that those pieces will be put into place, as well as the legislation. Thank you.

Hon AMY ADAMS (Minister of Justice): I will take a call at this stage just to address one of the recurrent themes that has come up to date, which has been the timing of the legislation and bringing it to the House.

Firstly, before I do that, can I just acknowledge the work that has gone into the bill to this point, both from the officials—who have worked incredibly hard over what I am going to explain to you is a very short period of time—and also the Law and Order Committee. I know we set you a very short turn-around time to get the bill back to the House. I think you did do a very good job. I know, from talking to the chairperson of that committee, that it was a very collegial and constructive committee, and I appreciate you for that work.

This is important legislation. I think the fact that the House, as far as I can tell, has roundly indicated that it supports the legislation suggests that there are no agendas at play here. There is a genuine desire to ensure that we get the bill in the right place. I am grateful for that. I think the committee has made some very useful changes, particularly around the information-sharing provisions that the member who has just resumed his seat, Barry Coates, mentioned, which I will come back to.

But one other point I wanted to make, just as we talk about the timing, is that while the original legislation is of course dated 2009, in fact, the bulk of that Act came into effect in June 2013. So it is a little bit disingenuous to say it has actually been in place since 2009. It has not at all. It has been in operation since June of 2013. I think, actually, that tells us a lot about the complexity of this legislation and the time it takes to work through exactly how we give effect to these sorts of very detailed rules in some complex sectors.

I think the thing that really drove the thinking in the development of this legislation was that this is absolutely a very critical and invidious part of criminal behaviour—the laundering of money. We know they use a number of mechanisms to hide criminal behaviour and to cleanse the money of criminal behaviour and hide it from detection. It is important that we can follow that money trail if we are to disrupt that behaviour. Also, of course, there is the financing of terrorism. I do not think I need, in this House, to emphasise the criticality of disrupting that money flow.

So there is not anyone, I think, who is arguing against the absolute importance of doing this work and addressing it. But equally, we have to acknowledge that the bulk of the transactions that this legislation will apply to—far more than the bulk, actually: the vast majority of the transactions that this legislation will apply to will be law-abiding New Zealanders going about their law-abiding business in a normal way, and not committing any crime. We have to strike that balance between picking up their legal behaviour, absolutely, but without making it so burdensome that—look, this is a made-up percentage, I am free to admit, but let us say 99 percent, which I think is probably not unreasonable—the 99 percent of transactions that are not money-laundering are not unreasonably impeded or slowed down or a big cost burden lands on them.

That is the tension. That is the nature of the complexity that absolutely takes a lot of very detailed consideration. When you have been in the role of having to devise a policy framework for something of this nature, you realise how complex it is to get that right. I have been very open in this House that the first reports of the compliance costs—over 10 years of the framework—were in the order of $1.6 billion on New Zealand citizens. That is a bill that I proceed with great caution in respect of, and trying to get that balance right between enough rigour and oversight and process to catch their legal behaviour, but equally not imposing that sort of cost on the businesses and households of New Zealand, I think is absolutely critical.

It may seem like an easy enough thing to say in passing: “Well, we should just bring these sectors into the regime.” I can tell the Committee it is not. It is very, very complex. As you will have seen—and I know the committee heard a number of submissions from the sectors pleading to be given longer because they could not possibly organise themselves in this period of time—the committee held the line. I think that is appropriate, but we should not be under any illusion that this is some sort of simple thing that could have been done more quickly.

The legislation, obviously, came to the House in March; it has been off to the select committee, which, as I said, I think did a very good job. It came back to the House and was available for debate last week. So the suggestion that it has been “repeatedly pushed down the Order Paper” is quite wrong. It was available last week, it is being passed this week, and with the consent of this House it will be law by the end of this week. So we have moved at pace to bring the legislation together, to bring it into the House, and to pass it.

I do want to make reference to the Shewan report, which suggested that somehow we could just remove an exemption in the phase 1 legislation and lawyers and conveyancers would come in. While I understood the intention, the advice I had very, very clearly was that it could not be done that simply, and I would have thought the committee that worked on the legislation would be very well aware that it is a much more complex exercise than simply saying they are no longer exempt, and the complexity with which we work through issues like information sharing and legal professional privilege and the issue of conveyancers and non-legal people employed in law firms tells us that there is much more to it than simply doing a quick repeal and removing a line out of the exemptions. So I think it is a little disingenuous to pretend that that could have happened that simply.

STUART NASH (Labour—Napier): I would agree with the Minister in the chair, the Hon Amy Adams, on the complexity of the legislation; of that there is no doubt. I would disagree respectfully with the Minister on the fact that 99 percent of the transactions are by law-abiding citizens. What we are trying to set up here, and rightly so—just to backtrack a bit, of course we support this legislation, there is no doubt about that, but we do have some questions, so I just do want to put that on the table. The officials did an incredible job with very short turn-round times and I was pleasantly surprised at how thorough they were in their requests from the committee. But we do have some questions and there were some areas of debate.

This is not about 99 percent of the transactions, because if it was, then the complexity would just make it far too hard for any law firm to do its business, or any accountancy practice or any real estate business to do undertake business in a way that was meaningful. What we are trying to do here is capture activity or capture business that, in fact, stands out, which is—to use a word—suspicious. For example, if someone comes in—and I talked about this last night—with $10,000 worth of cash and tries to buy something, that would, I would assume, according to the Act be a suspicious activity, but if someone comes in with a credit card and swipes $10,000 because they are buying a nice bit of furniture, well, that is not a suspicious activity. But it is quite difficult to determine what suspicious activity is. When it is dealing with cash, obviously that is pretty obvious, but the other areas are not as obvious.

So there are two areas that I would not mind talking about to start off with. One is suspicious activity reports, and the other bit is around privileged communication, which we debated long and hard in the select committee, I must be honest. I will say here and now that I think we might have been able to streamline the process, certainly with regard to conveyancing lawyers and maybe real estate agents if we had something in the general sale and purchase agreement—if there was even a box to tick that real estate agents or lawyers could sign off; a box saying: “Has this gone through AML legislation or is there a need to go through AML legislation, or was there any suspicious activity?” With a simple tick for no, then that is ticked off and we know.

I suspect that might be an easier way forward, but anyway, let us get back to the suspicious activity reports. I am talking about section 39A, “Interpretation”, in clause 18. I know we have got to have this sort of thing in here, but it is arbitrary. Section 39A(b) states: “where the reporting entity has reasonable grounds to suspect that the transaction or proposed transaction, the service or proposed service, …” etc., etc.. We are talking about suspicious activity and the arbitrary bit here is what constitutes reasonable grounds. For one person reasonable grounds could be very easy; for another person it might be slightly different. My concern when we have something like “reasonable grounds” in there is that that definition will end up being decided by the courts. I hope we do not get to that but “reasonable grounds” is one of those ones where it does mean different things to different people, even though I know “reasonable” is a legal term.

I go down to section 40 “Reporting entities to report suspicious activities”, also in clause 18. Again here, subsection (3) states: “If this subsection applies, the reporting entity must, as soon as practicable but no later than 3 working days after forming its suspicion, …”. Again, I come down to what is the definition of “forming a suspicion”. It can be very obvious if cash is handed over, for example, but there are other areas where I may think that something is suspicious and therefore I have formed an idea around suspicion, whereas someone else might not.

Hon Ruth Dyson: There are huge inconsistencies.

STUART NASH: This is a thing we debated in the select committee, Ms Dyson: how the courts or how the police or the person themselves will determine whether in fact it is suspicious. There is the slight concern—and I am not casting any stones—that some will say: “Well, I personally did not think this was suspicious, therefore it’s not.” That may hide a multitude of sins, if you know what I am talking about.

This is something that I want to talk about as well. Section 40(4) states: “Nothing in subsection (3) requires any”—and what we initially put was “lawyer” and that has been crossed out and we put “person”—“person to disclose any information that the person believes on reasonable grounds is a privileged communication.” So what we have done there—and again we debated this long and hard in the select committee—is we have carved out privileged communication from being subject to this legislation.

We had concerns, and I certainly had concerns that a lawyer—and initially we did have “lawyer”, then we realised that there may be a person who is not a registered lawyer or something who may come under this Act—or someone might hide under the definition of “privileged communication” and say: “Hey, I didn’t have to disclose this because I believed it was privileged.” So what is the definition of “privileged communication”? This is in the legislation and I am not going to read the whole lot out because that would be meaningless, but let me just give an indication. I am quoting here from section 42, “Privileged communication defined”. It states: (1) A communication is a privileged communication if—(a) it is a confidential communication (oral or written) (including any information or opinion)—(i) that passes between—(A) a lawyer and another lawyer in their professional capacity; or (B) a lawyer in his or her professional capacity and his or her client; …”—and there is more—“(ii) that is made or brought into existence for the purpose of obtaining or giving legal advice or assistance;”.

The concern I had about this, which I thought was allayed by the officials, is that, as mentioned, a lawyer could say: “No, no, this was privileged communication. I did not have to disclose this.” But what we actually determined was that if a client came to a lawyer and said: “I’m thinking about doing this sort of transaction or undertaking this sort of deal.”, then the lawyer could actually say: “Well, I would advise you against that, because you may be breaching AML legislation.” So what we determined was that just advice or assistance did not come under this piece of legislation. However, if the client or the person then went ahead with that transaction or the deal, then the lawyer was under an obligation to in fact disclose that under a suspicious activities report. I think I have got that right. I see the officials looking at me slightly, but I think I have got that right, and that is why we have put it there.

We spoke to the Law Society about this. The Law Society submitted on this, and I did question it and said: “Could you hide under this—under a hypothetical situation?”. It said it needed that ability to advise a client that, in fact, this may fall under the legislation. That sort of makes sense, but I would say that what we did is we carved out something that said this is not privileged communication if it is given in bad faith or for a dishonest purpose. This is because what we did not want is for lawyers to say: “Well, I’m disclosing this in a suspicious activity report.” when they were doing it in bad faith or to make some sort of financial gain or they were being disingenuous in the way they were disclosing it.

I hope that does not sound complicated, but what we wanted to ensure is that no one could hide any sort of deal or any sort of transaction behind privileged information when, in fact, also what they might have been trying to do was disadvantage a client or another lawyer or scuttle a deal. I know that is a little bit confusing, but lawyer-client or professional-client privilege is a big thing in the legal fraternity—I understand that. So what we were trying very hard to do was to ensure that we did not break the lawyer-client privilege rule, which has been around for, I do not know, as long as lawyers have been around—centuries, I think. I think prostitution is the only profession that has been around as long as lawyers.

The CHAIRPERSON (Hon Chester Borrows): Just be careful; there are a few lawyers in the room.

STUART NASH: Ha, ha! I have a Master’s degree in law myself, and my father was a lawyer, so I do not mean to disparage all the good lawyers out there who are doing a good job.

I suppose what I am saying is we had to walk a very fine line here to ensure that lawyers were able to act with integrity, without doing something in bad faith or without having to put forward a suspicious activity report when there was only a sniff of something—where they were allowed to advise a client either to do or not to do a deal or a piece of business when it could have fallen under legislation, if you know what I mean.

What could have ended up happening is that whenever a client spoke to a lawyer for 30 seconds, it might have actually forced a lawyer to put in a suspicious activity report, and we just thought that that was probably too onerous and probably did not reflect the intent of the Act. I think the Minister, Amy Adams, knows what I am talking about here. I think I have expressed that in a way that might sound slightly confusing, but I hope I have expressed it in a way that makes sense.

I will actually leave it at that now, and talk a little bit more a little bit later.

Hon DAVID PARKER (Labour): I have two issues that I would like to canvass. The first relates to new section 43 in clause 18 of the bill, which deals with allowing auditors to report suspicious activities to the Commissioner of Police. I am not too concerned with new section 43(1)(a), (b), (c) and (d)—I will read out the first part to make this clear. “Despite any enactment or any rule of law, this section applies to a person who, in the course of carrying out the duties of that person’s occupation as an auditor, has reasonable grounds to [believe], in relation to any activity, that the activity is relevant to—” and then there is a list of things that it could be relevant to. And if you fall within that list, the auditor can report the activity to the commissioner.

Paragraph (a) says that that would apply in the situation of it being relevant to the investigation or prosecution of a person for money-laundering—clear enough. Paragraph (b) is the enforcement of the Misuse of Drugs Act—could be quite wide. I mean, enforcement of the Misuse of Drugs Act could be someone being prosecuted for smoking a marijuana cigarette, so that is pretty broad. I do not know why that needs to be that broad. Enforcement of the Terrorism Suppression Act is probably fair enough. Enforcement of the Proceeds of Crime Act or the Criminal Proceeds (Recovery) Act 2009—seems fair enough.

The one I have got a question about, in particular, is paragraph (e), which says where it is relevant to “the investigation or prosecution of an offence (within the meaning of section 243(1) of the Crimes Act 1961).” I go to section 243(1) of the Crimes Act and it says that “offence means an offence (or any offence described as a crime) that is punishable under New Zealand law, including any act, wherever committed, that would be an offence in New Zealand if committed in New Zealand.” That is an incredibly broad definition—incredibly broad definition.

I would like the Minister in the chair, Amy Adams, to explain why it is necessary, in new section 43(1)(e) to have such a broad definition of “offence”. That seems to me to be saying, effectively, that even the most minor of offences is something that allows an auditor to say: “Oh, well, I am going to be a policeman here, and I am going to pass that information on.” So that is my first question.

The second one is just referring to the Minister’s statement to the Committee, just a few minutes ago, recognising that these laws need to be practical. It deals with a situation that was recently brought to my attention by a lawyer I know well, which goes to the identification of people. My understanding—and the Minister will know more about this than me, and can correct me if I am wrong—is that one of the ways in which this legislation is operationalised is that people who are caught within its ambit have to verify the identity of people. Even if they do not think this is a suspicious transaction they have to go through the hoops to verify the identity of people these days.

I experienced this recently for myself in respect of going into a sharebroker that I have dealt with for decades, with people who know me by face, and yet they still had to tick off and—you know, these people were in a position to certify they knew me, but they still had to get a copy of a passport or of a current driver’s licence from me. So I was talking to this lawyer about the same situation for him, and he said that with some elderly people it is just about impossible, because if you have not got a driver’s licence because you are too old to drive and you have not got a current passport because you have stopped travelling—

Hon Ruth Dyson: What about your SuperGold card?

Hon DAVID PARKER: I do not think the SuperGold card qualifies you. I would like to have some assurance from the Minister, Amy Adams, that there are practical means for identification of people where the professional person who was dealing with them, who knows them well, can certify who they are—they might have had their will for the last 30 years, and they have got someone who comes into their place—and that we are actually not creating an undue burden for that person to have to prove who they are. I think that if that is the bureaucratic tangle we have got ourselves into, then this regulation goes too far. So I would be pleased if the Minister could provide answers to those questions.

RINO TIRIKATENE (Labour—Te Tai Tonga): I am pleased to take a call on this bill, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. Obviously the intent of the legislation is very clear, and we are supporting it on this side. Just listening to the contributions from my colleagues—I too have concerns around the practical application of firms being able to adhere to the requirements set out in the bill. It seems to me that when you look at all of the potential offences and the reasonable grounds that, say, a law firm may have to check off—I am just querying how practical a compliance programme with a law firm, or any other of the entities that have to do reports, is in practice and whether they will be able to adhere to their obligations under the bill.

We are talking about misuse of drugs, terrorism suppression, and money-laundering legislation. Each one of those pieces of legislation is a highly technical piece of legislation, and not only that, we are yet to see what the prescribed form will be in the regulations, as to the nature of what they have to report. I am not too sure whether the regulations have been drawn up yet or whether they already exist—well, they probably would not exist under the existing legislation already.

It comes down to putting more compliance on to businesses, which just really want to provide their services to clients. Obviously we want to stamp out the money-laundering activities that do go on, but it just seems to me that for any trader, or even just a sole practitioner—I mean, in addition to providing the legal service to the client or facilitating the transaction, there is the actual consideration that that lawyer or sole practitioner would have to take, to come to form that opinion as to whether their particular client is bona fide or whether they indeed have to report to the commissioner. It just seems to me that it can be a bit—I guess it is finding the right balance between what is practical and what is necessary, and then, are we actually achieving the ultimate objective whereby we want to root out the bad guys and report them to the police.

So I guess it is trying to find that right balance within the obligations that are imposed in the legislation, and it seems to me, based on a very quick, cursory look, that it is quite technical. There is a range of different legislation. I would hope that the Law Society is going around its members as we speak and giving seminars on how they are to treat the obligations that will be imposed on them once this legislation is enacted, because it is quite onerous.

I just want to conclude by saying that when we look at the exemption around privileged communication—it seems like, apart from the exemption, if it is really dishonest, all communications between the client and the lawyer concerned are privileged. It is a very wide definition, and it could very well fall within that ambit. I guess the point I am trying to make is that if people are going to break the law, they work around what the requirements are. If there is a risk of a certain person, fitting a certain description, committing an offence—I mean, a criminal will look to work around whatever the risk is. So it will be interesting to see, once this has bedded in, how it is working in practice and whether we actually are catching the bad guys. But I certainly hope that we can achieve this through the passage of this legislation. Kia ora.

Hon AMY ADAMS (Minister of Justice): I apologise to Mr Nash. That is twice I have pipped him at the post. Sorry about that.

Again, I thought I would take just a brief call to address some of what has come up in the spirit of a constructive and open debate, and also to speak briefly to the Supplementary Order Paper (SOP) that I have tabled to get on the record what that covers. It is interesting that the last few calls in the debate since I took my last call have talked to some of the very complexities that I talked about in my first call. So while the first few calls sort of said “Why didn’t this happen sooner?”, we have then had some very thoughtful calls from Mr Nash, Mr Parker, and Mr Tirikatene actually talking about some of those very complex issues that are really difficult and that have to be worked through in some detail.

I was really grateful that the Law and Order Committee did spend a bit of time on the issue of privileged communication and legal professional privilege, because it is one that the officials and I debated at some length over a long period of time. Obviously, I have a legal background myself. I am very aware of the importance of the extent and the criticality of legal professional privilege, but at the same time this is a system that relies on suspicious activity being flagged and reported through, and getting that balance right between saying “If you see something that’s clearly untoward, we need you to say something for the good of the country.” versus “We can’t destroy the system of privilege that is critical to the operation of the legal system.” is a hard one. I do not pretend that it is an easy resolution.

This is one of those—I do not like to say “rare”, but potentially rare situations where Ministers really do hope the select committee will add a lot of value in teasing and testing that out with submitters in a way that I think adds real value to the bill. I think, as I said in my opening remarks, the position that the select committee has left it in is as good a position as we can hope to get it in, and I say that in a slightly caged way because, of course, in time we might find that there are situations where we have to be tougher—speaking to Mr Tirikatene’s point. It is not always going to be easy to identify exactly what it is and draw a fixed line in the sand. But our job as legislators is to try to anticipate and design a framework that is as good a balance between critically important and very complex objectives as we can get it.

I want to just respond to Mr Parker’s point around new section 43(1)(e) in clause 18 and the width of the Crimes Act within that. Of course, we have to bear in context what that clause requires to be done, which is—well, actually, it does not require it, but it says that the auditor may report indications of criminal behaviour. Of course, any of us at any point in time, about any legislation, have the ability to report it to the police if we think there has been criminal behaviour. Often there are debates making it very clear that we think that that should be the case, and that is certainly the case here.

In the context of this, the reason it is important in the anti - money-laundering context is the necessity of identifying the predicate offence, and the predicate offence is more often than not a critical part of proving and identifying that whole money-laundering framework. It does not in and of itself go beyond what an auditor could do in many situations in any event, but what it does make very clear is that if there is identifying predicate offence behaviour that they are concerned about, then there is a very clear pathway to report it through to the Commissioner of Police. Again, I know that that is something that the select committee will have looked at very carefully in that context of privileged communications and of identifying where we set that framework so that we do enable genuine good-faith indications of behaviour that is of concern while protecting the privileged communications that many business activities rely on.

The final point that I wanted to make in this contribution is, just as I said, in reference to SOP 352, which I have tabled and I have circulated to all parties, and I hope they have had an opportunity to look at it. Parties will be aware that most of the changes in that SOP are very technical drafting cross-referencing checks that the Parliamentary Counsel Office picked up after the revision-tracked version came back. I do not think there should be any concern; I have not heard of any.

The one change that I have made that is of some substance to the select committee position—which I flagged in my second reading speech yesterday—is simply the change to make it clear that for a law firm or an accountancy firm that operates in a partnership, there is not an expectation or a requirement that every single partner should have to report as an individual entity. For tax purposes, accounting and law partnerships operate as a collective, and are recognised as such and deal in that way. I think there is some real benefit in that, because it means each partner remains liable for the behaviours of others, and that oversight of other partners—because they know they are liable for what you do—believe me, is a very real safeguard on proper behaviour. From a compliance perspective—again, to Mr Tirikatene’s point—we want to make sure that these things do work as smoothly as possible, and in my view it does not make sense to say that every single partner needs to report in their own regard or needs to be an individual reporting entity.

So I am recommending in the SOP that we reinstate that provision of the bill as drafted, which makes it clear that when a professional partnership is formed and is operating as a single entity, although not a legal person in the strict legal definition—as the lawyers in the room will know—it does make sense for this purpose to recognise it as a single reporting entity. With those few comments, I hope the Committee will move to support the bill.

STUART NASH (Labour—Napier): I would just like to very briefly make one more point with regard to my last rather laborious point on privilege—

Hon Amy Adams: Oh, not at all!

STUART NASH: Ha, ha! That is actually new section 159A in clause 51A, and it does actually state here that “If any person refuses to disclose any information or document on the grounds that it is … privileged …”, then what can happen is “the Commissioner, an [anti - money-laundering] supervisor, or that person [can] apply to a District Court Judge for an order determining whether or not …” it is privileged. So there is a higher authority that the authorities can go to if, in fact, the lawyer or another person claims privilege.

There is one other point. Mr Parker actually brought up an interesting point. If we go to new schedule 2 at the very back of the bill, and this is just under the heading “Details to be contained in domestic physical cash transaction report”, there is actually quite a lot of information there that must be contained in any report—and this is on the very last page of the bill. For example, it is their date of birth, their ID document number, the type of account, the physical address, the phone number, and any other identifying information, or, in fact, if it is someone acting on behalf of a customer, then there are other unique identifiers that do need to be outlined as well. This makes sense, because what we are attempting to do here, of course, is to stop the crooks from laundering money, and if this type of information is the sort of information we need to stop that, then so be it.

One thing I would like to talk about in a little bit more detail is, again, something that we debated in our select committee a reasonable amount and for quite a while, and not just between the officials and the committee members but also with submitters. This was who had the ability, or what entity had the ability, to determine whether information sharing was to be allowed. I am looking at new section 139A here, but if you look through the bill from about clause 38 all the way through to nearly the end of the bill, but certainly through to clause 51, there is a whole lot of stuff that has been taken out from the original bill as it was presented to the Law and Order Committee. The reason for that is that initially in the bill, what was determined was that officials had the ability to determine whether information could be shared. So when the bill was at the select committee, we said that the commissioner, the New Zealand Customs Service, or an anti - money-laundering supervisor may disclose information supplied or obtained via the exercise of the powers and performance of its functions.

The bill originally said that Government officials—paid officials—could determine which information was shared. We came to the conclusion at the end that when there were people who were far more expert in this area than myself and, I suspect, a number of the other MPs around the select committee, to determine that this should, in fact, be an authority that only the Minister has. So what we did is we actually inserted a new clause 38A, which inserts a new section 139A. What that did is that took out the original bill’s new sections 139, 140A, 143, 157, 158, and 159—I think I have outlined all the ones that we actually removed—by saying that officials should not have the delegated power to make these sorts of decisions.

What we actually concluded is that the Governor-General—I am talking about new section 139A here, regulations relating to information sharing—“may, by Order in Council made on the recommendations of the Minister, make regulations for the purposes of … (a) specifying the type of information that may or may not be disclosed: (b) prescribing the conditions under which the information may be disclosed” and how that information can be used. But we also said, and this is what we inserted into the bill, that “Before recommending the making of regulations under this section, the Minister must consult”—so this was not “may” consult. We absolutely put an obligation on the Minister to consult the agencies and regulators that may be affected by proposed regulations. So we thought we were quite tough there. They must also consult the Privacy Commissioner, which we thought was actually a very good idea, because it needs to be tested there, and “any other person or body that the Minister considers may be affected”—so it is not “must” here.

If information is to be shared amongst agencies, then this should probably be discussed around the Cabinet table. The Privacy Commissioner must be consulted to make sure that this is done under the law, all the agencies that are affected must be consulted, and even ones that might not be but are on the periphery must be consulted if they may be affected. The reason around this is that what we are saying in this legislation is, in fact, quite far-reaching. What we are doing here is allowing information, which I am not going to say is privileged but which is detailed and stored in different areas, to be shared, which obviously is important if we are trying to chase down money-launderers or people who are financing terrorism. We do not want that, so we do need to have the complete picture, but we felt that the Minister had to be responsible if, in fact, we were going into new areas around privacy or the sharing of information between agencies.

So we have taken out, as mentioned, a whole lot of stuff that was originally in the bill, and I think we did the right thing. I really do think we did the right thing. There was no one who submitted to the committee who suggested that this was the wrong thing to do. So I just thought I would talk about that, because it is quite important. I might leave it at that, at this point.

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

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): Having listened to the contribution of Minister Adams, actually I learnt more about the bill than I did reading it. But I want to comment on a couple of things. Firstly, in regard to new section 40, “Reporting entities to report suspicious activities”, inserted by clause 18, and the period of “no later than 3 working days”—it seems to me to be an arbitrary period, but I would be interested in the Minister’s response regarding that time frame, because if the intent of the bill is to gather evidence for prosecution, given the way in which transactions occur so quickly these days, I wonder whether or not it will achieve its intended purpose.

As I was reading this part of the bill, new sections 40 and 41, inserted by clause 18, and considering the contributions that were made by colleagues, one of the things that occurred to me was the issue of an oral report. In new section 41(2) it reads: “If the urgency of the situation requires, a suspicious activity report may be made orally to any Police employee authorised for the purpose by the Commissioner, but in any such case the reporting entity must, as soon as practicable but no later than 3 working days after forming its suspicions, forward to the Commissioner a suspicious activity report that complies with the requirements in subsection (1).” Again, going back to the purpose of that subsection, if an oral report is intended to propel action, then what amount of evidence or what types of things in an oral report could give urgency for action to be taken? It is not that clear to me, and I would appreciate a clarification from the Minister, as it seems to me that while a suspicious activity report is intended to be occurring in a formal way, there is an exception. If the exception is intended to address the issue of time frame or action to be taken within a quicker period, then what are the things that must be captured in an oral report?

The third point that I want to come to, having listened to the contributions of my colleague Rino Tirikatene, is “occasional activity”: whether that definition may be so broad that it may capture the 99 percent that you were referring to, and whether or not that may mean that there could be an unintended consequence of people being captured under that definition. If that is not the case, then I am sure we would all benefit from a clarification, but if that may be a prospect, then what remedy might there be for people who are inadvertently captured under that definition?

Those are just three simple questions to the Minister. Again, I am not going to prolong the contribution, but I think, as people try to figure out the intent and purpose of the bill to ensure that it achieves its objectives, those will be helpful clarifications.

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

A party vote was called for on the question, That the question be now put.

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.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 352 in the name of the Hon Amy Adams to Part 1 and schedules 1 and 2 be agreed to.

Amendments agreed to.

Parts 1 and 2, schedules 1 to 3, and clauses 1 to 3 as amended agreed to.

Bill to be reported with amendment presently.

Bills

Commerce (Cartels and Other Matters) Amendment Bill

In Committee

BARBARA KURIGER (Junior Whip—National): I seek leave to consider all parts and clauses of the Commerce (Cartels and Other Matters) Amendment Bill as one question.

The CHAIRPERSON (Hon Chester Borrows): Leave for that purpose is sought. Is there any objection? There appears to be none.

Parts 1 and 2, schedule, and clauses 1 to 3

Hon CLAYTON COSGROVE (Labour): This piece of legislation is an interesting piece of legislation. Could I signal from the outset that Labour will be supporting the vast majority of the legislation. We have put up two amendments, which I will talk about in due course. This may well go down in the Commonwealth Parliament as one of the longest gestation periods for a piece of legislation. I think 4 and a bit years and four Ministers of Commerce later we are at the Committee stage with 2 and a bit weeks to go in the Parliament, and one would hope that we can get this through and pass it for the good of industry.

I want to say from the outset that I am pleased that the Government has accepted our offer to vote on this tonight so that we will have a vote before 10 o’clock to get through the Committee stage, because I share with the new Minister the Hon Jacqui Dean, who I think has been—I do not often say this about National Ministers but I have to say, being the fourth Minister of Commerce in as many years, she has taken this piece of legislation and, I have to give her credit, she has actually driven it through.

This is a very important piece of legislation. I have to say I do not understand why the Government—and I do not mean this in a facetious or any other way—renders so little priority to commerce legislation. It is key legislation for industry. There are clauses contained within this that the Minister has, quite rightly in my view, amended and consulted with industry around shipping and other arrangements that we will get to, which, had the work not been done on that, would have had, in my view and having spoken to a number of industry folk, quite a catastrophic effect on the nature of container traffic and the nature of shipping and an impact on our ports within New Zealand. But I am pleased to say that the Government has consulted industry. I think industry has spent a lot of time, I am advised, in providing good counsel and good remedy, and those issues have been resolved, and I say from the outset that we support them. They are incredibly important for industry.

But if we look at the gestation period for this bill, we go right back to the amendment—when it was introduced on 13 October 2011 and then it was referred to the select committee on 24 July 2012—

Hon David Parker: These people were still at school.

Hon CLAYTON COSGROVE: Well, there may be one or two people who were not born, who knows? But the committee did its job very well and produced an interim report on 28 September 2012 and a final report on 13 May 2013. It received a second reading on 24 June 2014 and 26 November 2014, and then, for some reason, they pulled up stumps. We had, I think, several Ministers—Minister Goldsmith and I think it was Minister Foss; I have lost a few in between.

But, again, I have got to say, to be fair, that this Minister has realised the importance of this legislation, and we are going to punch it through. I do hope, and I would be grateful—I know the Minister is not the Leader of the House, but I would be grateful if she might want to give an indication—oh, the Leader of the House has just arrived so he may indeed want to take a call and give an indication as to whether we can, assuming we complete the Committee stage tonight, do the third reading before the general election. I hope we can, and as we have been doing, in terms of cooperation, I offer my party’s support.

There are a number of critical issues in respect of this that we have some concerns about, and as we go through this debate we will tease them out. It was Minister Goldsmith who, in respect of Supplementary Order Paper (SOP) 343, clauses 17 and 18, made a case that cartel behaviour should not be criminalised. In effect, unlike the fact that—I am told—it is criminalised in Australia, the US, Canada, the UK, and the other, sort of, developed countries that New Zealand interacts with from time to time, the notion that was put forward by the then Minister Goldsmith was that, somehow, if we did not criminalise this behaviour, that that would, holus-bolus, cauterise commercial innovation as we know it in New Zealand.

If that is the case, then presumably you could make the same leap of faith—and I am not a lawyer; I am sure Mr Parker, who is a learned counsel, will take up the cudgels on this as we go through—and you could then make the same case as to why you should not criminalise a whole series of particular offences. And I would argue that company directors and business people, by and large—99.9 percent of them—do not sit down and say “How do we build a cartel? How do we get around this law? How do we play fast and loose?”, because (1) it is their reputation, and (2) it is their business and their shareholders’ entity on the line. I would argue that if we fell in line with our other developed-world jurisdictions—that innovation in Australia, I would argue, has not ended as we know it. Innovation in the US, last time I checked, even barring President Trump’s odd interventions from time to time, has not disappeared. Entrepreneurship has gone neither from the UK nor Canada.

But it is there, and the tenet of our criminal system is that we have deterrents. And, by the way, if you are thinking of playing fast and loose—not you yourself, Mr Chair—if my amendment is adopted, then you will do porridge. There will be imprisonable offences, and I would think that is a good deterrent. If it is good enough for Australia, if it is good enough for the UK, if it is good enough for Canada, the US, and others, then I cannot understand the rationale as to why we would not do it here.

The other amendment that is proposed by me is SOP 408, which is an amendment to section 36 in respect of the Commerce Act; again, widespread support for the concept. The concept is that we strengthen our commerce arrangements so that not only do we look at the effects of an action but we look at the impact. You know, I am driving down the street and I hit somebody in a car. I did not intend to do that but, actually, what is the effect—because the person is now disabled, their life is destroyed, etc.? What this does, in commercial terms, is it strengthens the arm of the Commerce Commission to look at the actual impact. I am advised that a number of eminent bodies have called for this, and, again, it brings us into line with international best practice. And why would you not want to, when you are examining commercial arrangements, monopolies, cartels, etc., look at not just the intent but also what the actual impact was, and deal with that?

I think these amendments are not put forward in a political way. Section 36 and the debate around it—in fact, I think the Commerce Commission itself supports it, if I am correct; it wants those wider powers to look at impact, not just intent.

The other point I will make in the first call is that we support SOP 343 in respect of the arrangements around vessel-sharing agreements and the block exemption in respect of shipping. Had the original amendments gone forward, then the industry and New Zealand would have been exposed—importers and exporters—to grossly inflated additional costs, increases in inefficiency in respect of the fishing industry, a reduction in the number of shipping lines coming to our shores, and an increase in the cost of goods to many in our community, such as food and other goods coming in to New Zealand. The industry highlighted this. I have to say the Government took some time to address it but it has addressed it. I am advised that the Minister’s amendments are well supported by industry, and the counterfactual would have been a major impact, as I have said, on shipping and our port facilities.

I would be grateful if the Minister, in the spirit of bipartisanship, could address those three issues, particularly the criminalisation issue, which we on this side of the House are particularly exercised about, and particularly section 36. I think, by and large, this is a very important and good piece of legislation. I think there has been good liaison with industry and we have some very good outcomes, as I have said, particularly in respect of SOP 343. I think there is general support for this; in fact, I think there is quite a groundswell of support for this legislation, and I am pleased—and I do hope and pray that, barring disaster, we will get it through the Committee stage tonight, and I would make a plea to the Leader of the House that we find a couple of hours to actually deal with the bill in its entirety prior to the lifting of the House.

I would appreciate some comment from the Minister or a rationale as to why, maybe, she will support SOP 408. Maybe she will support it and take a different view from Minister Goldsmith in respect of the criminalisation in respect of the legislation.

FLETCHER TABUTEAU (NZ First): It is a pleasure to take a call on behalf of New Zealand First on this Commerce (Cartels and Other Matters) Amendment Bill. I would like to just remind the Committee of our history with this legislation. We very much supported this process to the Commerce Committee, and I acknowledge the words of the previous speaker, the Hon Clayton Cosgrove, around the comprehensive engagement and lots of discussion with industry, and I agree that that has been what has happened. Where we differ—and it is unfortunate to see Labour’s position on this—is that there has been a substantive change to this legislation with the removal of the criminalisation of individuals when they undertake cartel activities, as defined by this legislation.

We went in completely agreeing that we needed a refresh. Industry wanted us to move down this pathway. It seems to me, to be quite honest, that the reason it has taken us 4 years and four Ministers to get to this point is that none of them was willing to take on what has become a terrible piece of legislation. Cartels, and the undertaking of good business in an economy, are a balancing act. What we had here was a conversation about the fact that good businesses were being prohibited from cooperating. It is fair to say that businesses should be able to cooperate with one another, in an endeavour to provide a service or goods to the end consumer in such a way that those businesses profit and that, actually, the consumer is better off for that coming together of business. So that conversation was important, and New Zealand First supports that. If the end consumer is better off, then more power to them.

But then we get to the point of the intent of the legislation, and so the conversation becomes asking where cooperation ends and collusion or cartel activities begin.

Hon Simon Bridges: This is a very jurisprudential sort of address.

FLETCHER TABUTEAU: Oh, thank you, Mr Minister—yeah, yeah, yeah. That is the conversation that needs to be had.

Up until the point that the Minister removed the criminal nature of sanctions, or actions, that were available to the Government, New Zealand First supported it. What the original conversation was was alignment with the practice in Australia. That also made a lot of sense. But Australia maintained the criminal sanctions—the ability to hold individuals to account. What we are doing here is allowing companies to go down a pathway where it is permissive—it has become permissive. And in doing that you need to make sure that the options available to you for those who are not acting in good faith and in fact are engaging in cartel behaviour very much allow them to be held to account. Whilst institutions or businesses can be sanctioned in this legislation, we say that the bill has been compromised completely with the removal of the criminal sanctions, and we cannot support this going forward.

My understanding is that Mr Cosgrove has put a remedial Supplementary Order Paper of that nature to the Committee, which I will speak to momentarily. If that is the case, and if we can get agreement on that, then New Zealand First would support the bill as a whole, because there are some good things here. There are technical alignments. There are efficiencies to be gained. As has been said, the industries have made good submissions and have had good conversations with the Government. There is a lot of good here but we cannot now go down that path of a permissive framework and then not have the legislation to back it up if things go awry. Thank you.

BARRY COATES (Green): Tēnā koe, Mr Chair. I rise to speak about the Commerce (Cartels and Other Matters) Amendment Bill. We are also deeply concerned about the long delay in getting this legislation presented before this House. Initiated in 2001—it is a very long period of time.

We regard the context for this bill as being the need to ensure proper competition between firms in a small society. We have to remember that New Zealand is a society where competition rules are particularly important, given our small scale. I think that the public is rightly concerned about a lack of competition and, as the Productivity Commission has repeatedly shown, New Zealand is paying high prices for goods, compared with other countries. We have seen a long list of scandals over rip-off prices, including in building materials and in construction, real estate, telecommunications, electricity, petrol, supermarkets, and the banking sector. The context here is that vigorous competition is absolutely vital for a fair deal for most New Zealanders. Instead, what we see is a situation where regulation is falling behind international best practice.

The Green Party supported this bill to the Commerce Committee. Subsequently we were—let us say—surprised when in late 2015 the then commerce Minister, Paul Goldsmith, suddenly did a rapid about-turn and overruled his department’s advice and MPs’ advice by removing criminal liability provisions from this legislation. We believe that this U-turn significantly weakens the legislation and lets collusion between big business off the hook. Fines, however big, are no substitute for potential criminal sanctions.

We note that our main trading partners—Australia, USA, Canada, UK, Japan, Ireland, and Korea—have criminalisation provisions, and we think that through removing these from this legislation the Government is missing an opportunity to align our regulations with those internationally. This, we believe, is an absolutely crucial aspect to this bill, and therefore the Green Party will no longer support this bill. We will oppose this bill without criminalisation sanctions.

We also would like to raise questions in the discussion around the exclusion from provisions of international liner shipping services. We have not seen an adequate justification for that. We are concerned about the breadth of some of the allowance of collaborative activity as being too permissive and allowing cooperative activity, or collaborative activity, where, really, a collusive element may be present. We see clearances as being too broad, and we would like to come back to that in the discussion of this bill. Finally, we see transitional arrangements potentially presenting a huge loophole for cartel activity to be again disguised as cooperative activity.

Overall, we are disappointed with the omission, in particular, of the criminalisation aspects of this bill. We would like the Government to reconsider that and we would certainly like to hear a sound justification for why this course of action is being proposed. Thank you.

Dr DAVID CLARK (Labour—Dunedin North): I am very, very interested in taking a call on this bill and grateful that I was finally considered to make a contribution.

Hon Clayton Cosgrove: It’s a short list.

Dr DAVID CLARK: Ha, ha! I know there was a lot of choice available, and I am grateful that I have the opportunity. I do feel very strongly about this particular issue that we are debating in the Parliament. I want to speak about Supplementary Order Paper 408 put forward by the Hon Clayton Cosgrove, because it proposes to strengthen the bill in a way that I think is absolutely necessary in New Zealand.

When we compare ourselves with what happens in Australia, we come up short. We have a situation in New Zealand where new companies struggle because there is a burden of proof on them in the courts that is too great to challenge those who would exercise market power. The tests that are in place are focused around purpose—and, of course, those who have good representation can defend themselves; those who are monopolies or large providers can defend themselves in that kind of environment more easily—rather than concentrating on the effect, ultimately, of what is put into place.

I am particularly fond of the detailed directives put in place by Mr Cosgrove into the legislation, which spell out exactly what the court may have regard to. Of course, the word “may” is there because we do not want to be too directive of the courts, but then it is spelt out in detail. It says “(a) whether the conduct was materially facilitated by the person’s substantial degree of power in the market: (b) whether the person engaged in the conduct in reliance on its substantial degree of power in the market:”, and so on. This is proposed new section 36(4)(a), (b), (c), (d), and (e) on page 2, for those with the Supplementary Order Paper in their hand.

What this does is it requires the court to get advice, effectively. If it starts to look at these things, it will have to call in specialist advice. I think it is fair to say that many people who discuss these matters who are subject experts say that the courts often do not have the expertise they need to make decisions in this area. By spelling out exactly what matters must be taken into account—“may” is what the legislation says. If the court then does go down this route, it will require additional expertise, and it is spelt out exactly where it may find that expertise and the nature of it.

I think that that is incredibly important, because we want a robust, competitive market in New Zealand. We know that markets are a great way to deliver goods, services, and so on. They are a very efficient way of delivering those things in the market, but they are efficient ways of doing things only where the market is fair and where new players can come in and introduce innovation that gives them an advantage over their competitors, and we resent the current situation where too often market power is used to stifle innovation. No one is better off in that situation. Those who participate in the market are not better off, because the quality of goods and services is not improved, and the people who would want to innovate—who may then look for export opportunities after establishing themselves with a toehold in the New Zealand market—are stamped out and, ultimately, those who exercise the market power put more money into non-productive aspects of their business such as fighting court cases because it is about cute bits of the law rather than actually about the effect on the market of the anti-competitive behaviour.

So I really just wanted to add my voice to that of the Hon Clayton Cosgrove. I recognise that his voice is loud, clear, and articulate, but I think he is really on to something here. This is something that we need to change, because otherwise those Australians across the Tasman whom we compare ourselves with really do have an unfair advantage for their innovators, because their innovators can get into the market, they can test their products, and they will not be stomped out in the way that we have in New Zealand.

On top of that, I want to say that at the moment we have been passing a lot of bills through the House that look at other aspects of trade policy. We have passed dumping legislation through the House. Overall, we have got a situation where there is a dramatic weakening of opportunities for innovators, and that cannot be good for New Zealand. I think we need policies that support innovation and support productive investment. Therefore, I want to add my voice to those in this Parliament—and I am sure there will be more—who want to speak in favour of Supplementary Order Paper 408 in the name of Clayton Cosgrove. I will stop there now. Thank you.

Hon DAVID PARKER (Labour): I rise to take a call on two points. The first is that I want to explain some of the reasons that lie behind the amendment proposed by the Hon Clayton Cosgrove on Supplementary Order Paper 408, which is to add a new definition of anti-competitive conduct in section 36 of the Commerce Act. The explanatory note attached to this proposed amendment describes the two significant gaps that currently lie in the section 36 test. At present, to succeed in alleging anti-competitive conduct—or the use of market power interfering with competition—the person who is making the claim has to prove that the firm with the market power took advantage of that market power for one of the three prescribed anti-competitive processes that are listed in the Act.

There are two significant gaps in this, in practice. The first is the exclusive focus on purpose rather than effect, and the Hon Clayton Cosgrove has already addressed how this compares adversely with the tests in some competition statutes overseas, where effect, in some situations, can also be considered rather than having to rely upon purpose. One of the reasons why purpose alone makes it hard to police anti-competitive conduct is that sometimes the legitimate business rationales can obscure an anti-competitive purpose, making it very difficult to prove the anti-competitive purpose even when it is so patently having the effect of using market power in a way that interferes with workable, effective competition. Because of this, a manifestly uncompetitive impact can remain unaddressed because the purpose element is not satisfied.

I do not have the time to go through all of the detail of this, but one of the reasons why section 36 has failed to achieve the intended purpose of this Parliament is that its effect was read down by the court. The court has further limited the ambit of the market power test under section 36 by applying what is called the counterfactual test. What this does is offer a degree of certainty to a monopolist, and there has been a need to link the anti-competitive purpose or effect to the conduct of the monopolist. Because of this counterfactual test being applied in a conservative manner by the courts, the already quite narrow ambit of section 36 has, in practice, been further narrowed by that test applied by the New Zealand courts. This is to be contrasted with the approach taken in Australia, where, rather than taking advantage of market power, the legal test over there is a lower test, where the conduct must have materially facilitated the anti-competitive conduct.

So, for those reasons, the Labour Party believes that the interests of consumers in New Zealand, and other competitive businesses, can be undermined by anti-competitive conduct by dominant participants in a way that is not fair. It undermines fair competition, and that is to the detriment of less dominant participants in those market arrangements.

There has been, I think, a very pure approach taken to competition by the New Zealand Treasury, since the 1980s, really. You see it going back to what used to be allowed in respect of Telecom, and it is still allowed by our pretty lax form of anti-competitive conduct regulated by section 36. It has been allowed because there has been a view within Treasury in New Zealand that there are price benefits, often, to New Zealanders where very, very efficient monopolists taking advantage of the natural advantage that accrues from their monopoly advantage is more efficient than having competition in a smaller market.

I have never bought that argument. I do not agree with that argument, and I think that if we want to have an economy that allows smaller participants to rise up and compete against bigger companies and bigger entities, many of which in New Zealand—disproportionately, compared with other economies—are multinationals from overseas jurisdictions, with it being a proven fact that the level of penetration of multinationals into the New Zealand economy, particularly in respect of some of the larger service industries, is higher than is normal for Western economies, that makes it all the more important that we enable these smaller competitors, or we certainly do not frustrate the efforts of those smaller competitors, to nip at the heels of the big monopolists by having a decent section 36 of the Commerce Act.

That is the reason that Clayton Cosgrove has brought forward this amendment to clause 36. It is so that more regard can be given to the effect of conduct rather than just the purpose.

The other point that I would raise is the one as to whether we should have a criminal penalty. Can I say that I agree that if you are not going to have a criminal penalty, then you should restore exemplary damages, and if you do have a criminal penalty, you ought not to have exemplary damages, because they are both in the nature of a penalty. Having both exemplary damages and a criminal penalty is almost a bit like double jeopardy, so I agree that you should not have both.

So we are left with the argument as to whether you should have either exemplary damages—which are not compensatory. They are to make an example of the person who has erred, or the company that has erred, so they are more than compensatory. They are in the nature of a penalty. You ought not to have a criminal penalty in addition to exemplary damages. The question is: which is best?

That is what the Hon Clayton Cosgrove has been saying—that the international best practice, in his view, is that we should have criminal penalties, rather than just exemplary damages. That is the reason why the Hon Clayton Cosgrove has brought forward his Supplementary Order Paper 408 to that effect.

In respect of those two issues, which is the most important? Actually, I think section 36 of the Commerce Act is the more important of those two issues, and, accordingly, I would await with interest the Minister’s response on that issue.

Hon JACQUI DEAN (Minister of Commerce and Consumer Affairs): I will just make a couple of brief comments around the Hon Clayton Cosgrove’s Supplementary Order Paper (SOP) 408, regarding section 36 of the Commerce Act. While we will not be supporting that SOP, I do thank the member for his thoughtful contribution in this debate, and other members as well.

The amendments that the Hon Clayton Cosgrove proposed will not be covered by the bill. It is not to say that the issues around section 36 have not been considered very closely. In fact, the issue around the provisions of section 36 formed a part of the target review of the Commerce Act. The counterfactual test, which is whether or not the person or the company that has market dominance would have undertaken that anti-competitive behaviour if they were not dominant, is a particularly hard point to prove.

I do note, and it has been mentioned, that the Australian Parliament is currently putting through legislation moving to an effects regime, which is essentially what Clayton Cosgrove is proposing in his SOP. I am not convinced that moving to an effects test or moving away from the counterfactual test is actually going to achieve much in terms of greater competition for New Zealand business. So I have instructed officials to keep looking, and if a case can be put up for making a change, then I think we should consider that. But at the moment I do not see, and officials cannot provide, sufficient evidence that making a change in section 36 will actually increase competition in the Commerce Act.

With regard to the Australian Parliament, let us just see how its changes to its commerce Act bed in, and that is something that I believe we could have a look at in the future.

FLETCHER TABUTEAU (NZ First): Thanks for the opportunity to take what I hope to be just a short call, for the benefit of the members in the Committee. I do want to make specific mention of the amendments submitted in the name of the Hon Clayton Cosgrove, in the first part. Deleting the amendments to clauses 17 and 18—as in, bringing back the criminal liability and the criminal sanctions—is absolutely the point of the first contribution I made in the Committee earlier. So if the Government could bring itself to realise that in having this permissive regime, what we now need to do is make sure that those who would take advantage of that will be held accountable to the full extent of the law—and so should be held accountable—then we are in a position to say to the Government: “You have done some good work in this bill.”

There is actually a lot to be commended in it, and I have already said what that is in terms of alignment with international practice and making our operations more easily aligned with the Australian market. These are good things, and we could support those. But we absolutely cannot support the bill, because we have gone down this road and we need to bring clauses 17 and 18 back into the legislation.

Can I just add that in relation to Supplementary Order Paper (SOP) 408, there has been—and the Minister in the chair, Jacqui Dean, alluded to it—a lot of work and a lot of conversation around whether we establish the purpose of involving a legitimate business rationale. Do we ask the question on the purpose or the effect—the actual impact—of the intent? Rather than look at just the intent and the purpose of the individual or the company, what is the actual impact on the market?

I concede that the Minister is absolutely right that this is a contentious issue, and the conversations do go both ways, but the reality is that this is a strong and powerful way to send a message. In the past, you have been able to hide illegitimate activities and couple them up with what could easily be defined as legitimate activities with other players in the market, and it has been incredibly hard to establish any kind of guilt in that kind of regime.

I think that Mr Cosgrove’s SOP has hit the nail on the head. It has actually gone further than we would have gone ourselves, but I completely agree with it. I put it to the Minister that these two amendments being added to a bill that I am sure she would argue will do wonderful things for our economy would not only make it workable and have those positive outcomes but, when we needed it, we would be able to hold individuals to account. We absolutely need to send that message, and we need that in our legislation.

Unless these amendments are passed, as I have said, New Zealand First cannot support the bill itself. But we look forward to the Minister’s agreeing to what are good additions—or deletions of deletions, as the case may be—in this legislation. Thank you.

STUART NASH (Labour—Napier): I have a couple of questions about this and a couple of concerns, and I will raise those. First and foremost, clause 8, inserting new section 30, “Cartel provisions”, actually says that no person may enter in unless exempt. I know a company is a legal person, etc., but there are other legal entities that actually are not defined in law as a person—for example, a partnership is not a person. Why not just say “person or other legal entity”? That may be a way to get around that if someone seeks to; I am not too sure.

I think it is important just for what I am going to frame—the question that I am going to ask is what a cartel provision is, as defined by the law. So a cartel provision—it talks about price fixing, restricting output, and market allocation. It used to talk about bid rigging, but that has been taken out. I am not too sure why that has been taken out; no doubt there is a good reason. So price fixing, restricting output, and market allocation—let us keep that in mind, OK? I mainly want to talk about price fixing. I think we all know what price fixing is, or we have a general idea—a sort of an “ordinary usage” idea of what price fixing is. What it means is parties to a contract or arrangement or understanding look to fix, control, or maintain the price of goods where any two or more parties to a contract or a supply are in competition with each other, but are fixing prices—pretty obvious.

The reason I say that is that I want to talk about the exemptions for collaborative activity. So we have talked about what a cartel is—it is a nasty thing and we do not want it. However, there are exemptions. I am not too sure why there are exemptions, because what they talk about here—and this is in new section 31(1)(b)—is that “the cartel provision is reasonably necessary for the purpose of the collaborative activity.” What is the definition of “reasonably necessary for the purpose of the collaborative activity.”? Why do we have to have a carve-out there for cartel provisions? Cartels are not good things. We have established that; it is why this legislation is here, and yet what we are saying is that they could be reasonably necessary.

There is another thing, also, in section 31(2)—that collaborative activity means an enterprise or venture that is not carried on for the dominant purpose of lessening competition between two or more players. So, according to the legislation here, if the dominant purpose is not to price fix, then that is OK, as long as it is done in a collaborative way. Maybe I am not reading this legislation correctly, but I would have thought that a couple of players—and I will give an example soon—would say: “It is not our dominant purpose to fix prices. We had a dominant purpose to act in a collaborative way. The fact that prices were fixed in the market place was not our intention. However, that just happened and we’re sorry about that, but it’s not what we intended.”

Also, there is an exemption for vertical supply contracts. For example—this is new section 32(1)(a)—“the contract is entered into between a supplier or likely supplier of goods or services and a customer or likely customer of that supplier;”. This is an exemption. It does not have the dominant purpose of lessening competition. So the price is fixed, but it was not a dominant purpose. That was just an unintended outcome, or an unfortunate outcome. I would argue that it will be interesting to see whether this is tested in court. In a way, it has been tested, but not in court.

Where it was tested recently was when the Minister of Energy and Resources—in an interesting collaboration with me—tested this by asking the Ministry of Business, Innovation and Employment (MBIE) whether, in fact, there was any anti-competitive behaviour in petrol pricing in this country. The reason we asked this is that what tended to happen is about 3 years ago, for about 10 years, the margin that petrol guys were making at the pump and at the supply end was about 10c a litre. Then what happened was it jumped up, at one point, to around 40c a litre. It tended to happen over the holiday period or when people were using vehicles, etc., etc., but it was a trend.

At the moment what we have got is one supplier in this market that has over 50 percent market share in the retail sector. I know the Commerce Commission did have a good close look at this when this came in to play, because one big player bought another big player and it gave them over 50 percent. [Bell rung] Mr Chair?

The CHAIRPERSON (Hon Trevor Mallard): Aw, Stuart Nash.

STUART NASH: Goodness me. I am sorry—I hope I am not keeping you up.

The CHAIRPERSON (Hon Trevor Mallard): I will be enthusiastic if the member can be.

STUART NASH: Well, I am trying to. What I am doing here, Mr Chair, is saying that what has happened is that according to an MBIE report commissioned by the Minister of Energy and Resources, with support from the Labour Party, it could not dismiss the fact that there was anti-competitive behaviour going on. But, of course, a report is not strong enough to actually take legal action on. In fact, what we were asking the Minister to do was refer this to the Commerce Commission, because what happened is this report, put together by a whole lot of knowledgable consultants, said, first of all, that some of the players in this dominant market would not even give us any information.

This is after the Minister herself had said: “I want to know what’s going on in this market.” What a couple of the players said was: “Well, I’m sorry Minister. We don’t really care what you want. We’re not going to give you the information.” So a full report could not be written, but what the report did say is: “Well, we have a suspicion here. We think that there might be uncompetitive behaviour going on. I am wondering whether in fact what they would do is say “Well, look, I know that one supplier is supplying to different places in the market”, and these retailers and the supplier, who is controlled by one of the major retailers, in competition with another retailer—they know the price because they disclose the price at the wholesale point. What they might say is “Well it’s not our dominant purpose to fix prices.” or “It’s not our dominant purpose to lessen competition.” We pay more than any other country in the OECD for petrol before taxes—more than anyone else. That in itself should ring alarm bells, but “it is not the dominant purpose to fix prices; it is just what happens and we are really sorry about that, and we are really sorry, New Zealanders, that this happens”.

The other thing in here that I would be interested in knowing a little bit more about is that, in new section 30C(3), it says that, despite this, in the first 9 months after the date on which this comes into being, there are to be no proceedings under the section that controls cartel behaviour. However, during those 9 months you are allowed to prosecute under the old legislation. I am wondering why that is. I am wondering whether it is because in fact there is cartel behaviour going on under the definition of the new legislation in our petrol sector. What this legislation is doing is saying to these guys: “You’ve got 9 months to sort it out and we’re not going to prosecute you. We probably can’t get you under the old legislation, but we might be able to get you under the new legislation. You’ve got 9 months to sort it out.”

I do not know whether that is true or not, but when I read this, I go: why would you give them a 9-month grace period? Why would you do that? I mean, this legislation, as the Hon Clayton Cosgrove has talked about, has been around for a long time.

Hon Clayton Cosgrove: Four years.

STUART NASH: Four years.

Hon Clayton Cosgrove: Plus.

STUART NASH: Plus—4 years plus. And so there is plenty of time for companies to understand what is going on. I must admit when I now know what is going on in the petrol sector, after reading the report commissioned by the Minister about what is going on in the petrol sector, and when I now read that consultants had concerns about the anti-competitive nature, and I know that this legislation has taken 4 years to come through—you sort of join the dots.

Maybe the picture I am creating by joining the dots is completely false. But you cannot help but wonder, can you? You cannot help but wonder whether, in fact, you have known about this for 4 years but we are not going to prosecute you under the new legislation for at least 9 months after this comes into force. Why? Why is that the case? Why not say to people: “As soon as this comes into force, we are going to prosecute you if we find cartel behaviour going on, straight away.”? Why give that 9 months’ grace if the old legislation is bad and we actually need new legislation, which obviously we do, because this is why we are here and speaking on this bill?

I just have concerns that, first of all, cartel behaviour is bad but we have given exemptions if it is reasonably necessary for collaborative behaviour. For me, that just does not pass the sniff test, and I think it does not pass the sniff test either if a supplier is supplying a customer, but the dominant purpose is, in fact, price fixing.

Hon JACQUI DEAN (Minister of Commerce and Consumer Affairs): It may be helpful to refer to the Commerce Commission’s “Competitor Collaboration Guidelines” just to provide the member with an example—

Hon Simon Bridges: Great read.

Hon JACQUI DEAN: Well, it is a great read. It is very helpful. The member has raised concerns about the provision in the bill for collaborative activities. I would point out to the member that that collaboration must be through something like a joint venture, and that collaborative activity focuses on the substance of an arrangement. I will just give you an example—thank you to the Commerce Commission. For example, two computer manufacturers have different design and technology expertise. It happens all the time. They decide that by combining different capabilities or resources they will be able to offer more affordable computer hardware and software. That is the spirit of the collaborative activities exemption in this bill. So I do hope the member listened. I am very happy to table this document so that the member can have a look at it.

The member also mentioned the fuel market study undertaken by the Hon Judith Collins and the frustrations therein, whereby the study was not able to require information from market participants, and therefore could not come to a conclusive decision about whether the market was operating efficiently and well for the benefit of consumers.

Of course, good news for that member: I announced a couple of weeks ago that we will be proceeding with a market studies power for the Commerce Commission. I do hope that the member and his party will be supportive of that amendment to the Commerce Act, based on his comments this evening.

Hon CLAYTON COSGROVE (Labour): I want to refer to Minister Dean—because I appreciate she has made some interesting comments about a series of issues, except I do not think she has dealt with the criminalisation issue, unless I have missed something.

I would like to refer her to the regulatory impact statement (RIS), at page 23. It makes an interesting point in terms of the arguments in favour of criminalising this activity, bearing in mind, of course, that the only argument the Government has put up against this—I keep reading in some of the documentation Minister Goldsmith and others talking about the chilling effect. They used the words “the chilling effect”—to stifle innovation and entrepreneurial conduct. But it makes an interesting point in the RIS when it says that “Another view is that cartel conduct is similar to other white collar crimes and the penalties and sanctions for it should be brought into line with other offences such as fraud and insider trading.”

I know that the Leader of the House is present and he is a former Crown prosecutor, I am told. I assume he has prosecuted many a fraud and white-collar crime in his day. I am not sure whether—

Hon Simon Bridges: Not as many successfully, but I’ve prosecuted a few.

Hon CLAYTON COSGROVE: I was just going to say—I am not sure how many times he prevailed, but he gave it his best shot anyway. But it is a relevant point. Fraud and insider trading are indeed white-collar crimes. I would be grateful if the Minister could tell me what the difference is, and why there should be a difference, between the criminalisation of those two offences and the non-criminalisation in respect of cartel behaviour.

The Chair will know that I am a simple country boy, and I just come back to a simple fact, and he is nodding, in effect, that if it is good enough for Australia, Canada, the US, and the UK, which have similar jurisprudence, Westminster Parliaments, similar laws, and legal principles as ourselves, especially in relation to Australia, where we are coming together, closer and closer, in respect of our commercial and legal arrangements—why is it that those jurisdictions have managed to criminalise this behaviour, with no loss as far as I am aware, no “chilling effect”, to use the former Minister’s words, in respect of innovation and entrepreneurship?

If that is the only case the Government can make, then it is totally negated by the evidence coming out of the jurisdictions that have criminalised this behaviour. The argument would be, as we hear in the Chamber from time to time, to look across the Ditch, look across at our other kindred jurisdictions, look at the impact of what they have done or not done.

I say to the Minister that there is an argument. I know that the ACT member—I have read the media releases. The ACT member has waxed eloquent. I do not quite know—I am trying to search for the words—what great studies or influences have infected his cranium so that he signs up to—

Hon Simon Bridges: I have.

Hon CLAYTON COSGROVE: You have?

Hon Simon Bridges: No, no. The Road to Serfdom—he’s memorised that, and Rand.

Hon CLAYTON COSGROVE: —OK—in terms of his notion that innovation and entrepreneurship will be stifled if we criminalise.

I could make a number of disparaging comments—that is unlike me, I know—about motivation and other things, but I will not. But one has to question how, in logic, you could negate the principle of criminalising this sort of activity when other countries with greater jurisprudence than ours, and I would say, in many respects, especially the UK, tighter commercial law than us have done it.

Hon Simon Bridges: Yeah, well, you guys did away with the Privy Council.

Hon CLAYTON COSGROVE: No, no. I think—

Hon Simon Bridges: I always thought that was wrong.

Hon CLAYTON COSGROVE: OK, well—

The CHAIRPERSON (Hon Trevor Mallard): I will just make sure that we get that properly on the record. Thank you.

Hon CLAYTON COSGROVE: We would like to thank the Leader of the House’s great friends Jim Beam and Johnnie Walker.

This is a serious point. Many of us in this House, on both sides, know many company directors and many eminent business people who are honest, who do not engage in this, who are very careful around this, and who are not afraid of a criminalisation provision. They are not afraid of it. In fact, I know many entrepreneurs who would welcome this provision because it would provide a serious deterrent to those companies and those directors, few though they may be, who do engage in this sort of anti-competitive behaviour.

So I simply ask the Minister this: would she give us an explanation? Would the officials be able to elucidate as to what the rationale is, because I do not believe that the “chilling effect” argument washes, and it has not washed in other jurisdictions?

I just want to move on briefly to talk about the other amendment in my name, set out on Supplementary Order Paper 408, in respect of new section 36, inserted by new clause 7A. If I am correct in my memory—because it has been 4 years, and I do not know about other colleagues but my memory sort of waxes and wanes after year 1 or 2, since the Government proposed this legislation—the Commerce Commission supports the widening of these powers. The Minister says she is not convinced. I respect that view, but I go back again to a simple analogy, not a commercial one.

You drive a car; you crash into somebody, right? There is no intent to maim somebody, but then you have to look at the impact of the consequence and the cost and the detriment to that individual. You put that in commercial terms, because if you do not, it limits to a great extent what the Commerce Commission can do. So a company engages in activity that is repugnant, it did not really intend to—OK—but it did actually have a consequential effect on other parties, consumers, other companies, competitors, but we do not take account of that. Again, I just struggle with the logic—why you would not advance the argument from simple intent to impact. A material impact is rendered when an organisation, a company, engages in this sort of activity. There is an impact, and why would you not widen the Commerce Commission’s powers to take account of that? If there is another argument—the Minister says she is not convinced—well, OK, I would like a bit more detail around that.

The argument was put forward that officials are not convinced. Well, with respect, a number of us have been Ministers in this place, and a number of us from time to time have said to our officials that they are wrong. Again, other jurisdictions, like for the criminal offence issue—kindred and developed jurisdictions, UK and others—I am advised, have these sorts of provisions. If it is good enough for them—and you would argue, actually, that in the UK and US and Canada and Australia there is far greater competition in a whole series of industries, take groceries and supermarkets, than there is in New Zealand, yet those jurisdictions have these sorts of provisions. We are a small country. We are a small market. We have far fewer commercial entities, if you, again, look at supermarkets—one or two, two or three—yet we do not propose and we do not promote these sorts of initiatives and provisions, and I just do not get it.

I know there are commercial people far more learned than me who, again, would welcome these sorts of provisions because they provide a level playing field, they provide transparency, people get a fair go, there is recompense, and the Commerce Commission can intervene. But the Government seems to—and if the Commerce Commission is wrong, I would like to know why, because it is pretty pre-eminent. It is affiliated with the Australian Competition and Consumer Commission in Australia. If it is wrong and it has been calling for this for some time—if officials are right and the Commerce Commission is wrong, I would really like to tease out or have the Minister tease out the rationale in that regard.

These are not political provisions. These are not put up to score political points. These are genuinely held beliefs by other political parties. We are supporting the legislation overall because we think it is important and very good. Other political parties, based on the lack of input or the position that the Government will not change its mind on these issues, have decided to oppose it. I do not generally buy into that. I think generally this legislation has to go forward. But I think the Committee is owed a duty of care by the Minister via her officials to give us seriously, in a non-political way, a rationale as to why these provisions are so wrong that the Government will not look at it.

I just simply say in summation, again, that if it good enough for larger, more competitive countries and market economies to have these provisions on criminality—section 36 type - provisions—why on earth would a New Zealand Government turn those provisions down when we have far less competition, far fewer players, higher barriers to entry into certain markets, and greater opportunity to engage in this sort of nefarious behaviour? Again, as I say, we are supporting the legislation, but I think these are really important non-political issues that the Minister is duty bound to address—not just to say “We’re not supporting it. We don’t agree with it.” but to tell us in detail why.

Hon JACQUI DEAN (Minister of Commerce and Consumer Affairs): One of the benefits of having a bit of time to consider the provisions of the bill as introduced was that it gave us an opportunity to reconsider whether or not criminal sanctions were going to add anything or add enough to the pro-competitive, anti - non-competitive nature of the amendments we were making to be worthwhile retaining in the bill. On balance, the advice was inconclusive. Treasury was not in favour of criminalisation and concluded that the civil cartel regime appeared to be working well. The member did cite the Commerce Commission’s powers and so I would say that the Commerce Commission still continues to receive a high volume of leniency applications. That suggests to me that businesses do not want to be prosecuted under the current civil provisions and so therefore the civil regime is working.

I will give a brief example at the lighter end of cartel behaviour. If the Committee looks at the case of two online sellers of motor vehicle parts, of car parts—one phones the other and suggests that perhaps if they sold a certain part for the same price then they would both benefit. The other person agrees to this, does it for a while, then reconsiders and thinks “Hang on a minute. This doesn’t feel good.” The person rings the Commerce Commission and then applies for leniency provisions and is, in fact, prosecuted under those provisions, and pays a penalty. But one has to question whether or not that cartel behaviour, which was dealt with under the leniency provision, was criminal in nature. I would be very hesitant to criminalise an activity that may not have been criminal in nature.

I would also note individuals and bodies corporate are also subject to a range of sanctions under the civil prohibition. These can amount to tens of millions of dollars for bodies corporate. In fact, there was an award of $7.5 million against a body corporate and against an individual of $100,000 with a 5-year prohibition against management. So I argue—and the bill reflects the position—that the civil sanctions are a very strong deterrent.

The question was put that the following amendments in the name of the Hon Clayton Cosgrove to the proposed amendments set out in Supplementary Order Paper 343 in the name of the Hon Jacqui Dean be agreed to:

Delete the amendments to clauses 17 and 18.

A party vote was called for on the question, That the amendments to 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 to the amendments not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 343 in the name of the Hon Jacqui Dean to Part 1 be agreed to.

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

Ayes 93

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

Noes 26

Green Party 14; New Zealand First 12.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 408 in the name of the Hon Clayton Cosgrove to insert new clause 7A 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.

Part 1 as amended agreed to.

The question was put that the amendments set out on Supplementary Order Paper 343 in the name of the Hon Jacqui Dean to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

The question was put that the amendments set out on Supplementary Order Paper 343 in the name of the Hon Jacqui Dean to the schedule be agreed to.

Amendments agreed to.

Schedule as amended agreed to.

The question was put that the amendment set out on Supplementary Order Paper 343 in the name of the Hon Jacqui Dean to insert new schedule 2 be agreed to.

Amendment agreed to.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 93

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

Noes 26

Green Party 14; New Zealand First 12.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 343 in the name of the Hon Jacqui Dean to clause 2 be agreed to.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 343 in the name of the Hon Jacqui Dean to clause 3 be agreed to.

Amendment agreed to.

A party vote was called for on the question, That clauses 2 and 3 as amended be agreed to.

Ayes 93

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

Noes 26

Green Party 14; New Zealand First 12.

Clauses 2 and 3 as amended agreed to.

Progress to be reported presently.

House resumed.

The Chairperson reported the Appropriation (2017/18 Estimates) Bill without amendment, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill with amendment, and the Commerce (Cartels and Other Matters) Amendment Bill with amendment.

Report adopted.

Sittings of the House

Sittings of the House

IAIN LEES-GALLOWAY (Labour—Palmerston North): The House has made remarkably good progress this evening—in fact, surprisingly good progress towards the end there—so I seek leave for the House to rise at this time.

Mr DEPUTY SPEAKER: Leave is put for that purpose. Is there any objection? There appears to be none.

Sitting suspended from 9.53 p.m. to 9 a.m. (Thursday)

WEDNESDAY, 2 AUGUST 2017

(continued on Thursday, 3 August 2017)

Bills

Civil Defence Emergency Management Amendment Bill (No 2)

First Reading

The ASSISTANT SPEAKER (Lindsay Tisch): Members, the Business Committee has determined that this bill will move directly to first reading, where the calls will be limited to the Minister—5 minutes—and one call of 5 minutes each for all other parties. There will be no debate on the second reading. The Committee stage will be taken as one question, with debate not exceeding 90 minutes. There will be no debate on the third reading. This bill is set down for first reading forthwith, and I call on the Minister.

Hon SCOTT SIMPSON (Minister of Statistics) on behalf of the Minister of Civil Defence: I move, That the Civil Defence Emergency Management Amendment Bill (No 2) be now read a first time. On behalf of Minister Nathan Guy, who has a longstanding commitment to speak at the Pipfruit conference in Hawke’s Bay this morning, I would like to take the opportunity to, firstly, thank parties of this House for their support for this bill we have before us today. This bill makes a minor amendment to the Civil Defence Emergency Management Act of 2002 to allow for the current National Civil Defence Emergency Management (CDEM) Strategy to remain in place until 9 April 2019. Under the Act, the Minister of Civil Defence must complete a national CDEM strategy. The strategy sets out the overall direction for civil defence and emergency management in New Zealand.

The Act requires a strategy to be in place at all times. The current strategy is due to expire in early January 2018. However, as the House will be aware, in light of emergencies this year like the Kaikōura earthquake, we have formed a technical advisory group (TAG) to identify where improvements in New Zealand’s civil defence structure could be made. The technical advisory group has been consulting with communities and organisations up and down the country, and the group will deliver its final report to the incoming Government. It makes sense to first consider the recommendations of the technical advisory group before finalising a new strategy. This will allow the public to reflect on any outcomes of the TAG process when making their submissions on the next strategy. However, the Civil Defence Emergency Management Act does not provide a process to extend the current strategy. Therefore, this bill is needed to allow the current strategy to remain in place until the recommendations of the technical advisory group have been considered, and, depending on what the technical advisory group recommends, this could include a legislative change.

In conclusion, Mr Assistant Speaker and members of the House, this bill is a minor amendment to the Civil Defence Emergency Management Act of 2002 to provide for the existing National Civil Defence Emergency Management Strategy to remain in place until 9 April 2019, to provide time to consider the outcome of the technical advisory group review. Thank you once again for the support of members from across the House throughout this process. I commend this bill to the House.

CLARE CURRAN (Labour—Dunedin South): This bill, as was said by the Minister across the floor Scott Simpson, certainly is a minor amendment, and Labour supports it, as it is common sense. It is a minor amendment but it is for a very important reason, and, as the Minister explained, there is currently a parallel process happening to the existing strategy. The strategy of the Ministry of Civil Defence and Emergency Management is undergoing its normal process of creating a new strategy, as its 10 years is up, but we have had a number of very significant emergency events happen in this country, particularly in the last year and since the Christchurch earthquakes in 2012, from which many of the lessons have not been properly learnt, and appropriate changes not implemented, to ensure that New Zealand is much better prepared for future events.

It is a due to a technicality, really, that we are standing in this House today, because the new strategy is supposed to come into effect next year, but it cannot if we are undergoing the parallel process—as explained by the Minister—of the technical advisory group, which was set up quite urgently a few months ago to have a really hard look at how New Zealand responds to, and deals with, emergencies, and at what some of the big sticking points are that are putting us at risk.

We support this. The strategy that we are talking about—this is the strategy I am holding here—was implemented 10 years ago, in 2008, I think, signed by the Hon Rick Barker, who was then the Minister of Civil Defence. I think one of the questions that has to be asked—and I hope that the technical advisory group may be thinking about this—is whether 10 years to have a strategy in place, in a country like New Zealand, which has increasing numbers of emergency events, is actually too long a period for one strategy to be in place, and whether that strategy should be and could be looked at on a more regular basis.

I want to make a couple of comments in this first reading about the reason why this parallel process the technical advisory group is undertaking is actually occurring. It is actually occurring because of some major stuff-ups that have occurred during emergency events, and it is occurring because of pressure that has been put on the Government by Opposition parties and because of questions that have been raised, through some good reporting in the media, about some of the questionable decisions that have been made, the communication issues that have emerged, and the importance of New Zealand having the best intelligence and the best information with which to make decisions.

This technical advisory group is due to report by the end of this month. We urge that there be no delays. It must report before the election, because it must not end up shoved under the carpet for some months. It must report so that the political parties going into this election can take the best-possible approach to civil defence going forward, and that includes funding Geonet 24/7, a tsunami alert system that works, decision making and authority for decision making sorted, capability that is consistent across the country, and better communications and intelligence. All of these are issues that I have raised on behalf of the Labour Party over the last 12 months, and I hope that we can put in place the changes that are being recommended, as quickly as possible, and that those recommendations are the best-possible recommendations.

Labour supports this legislation. We want to see changes to civil defence happen and happen soon.

Dr KENNEDY GRAHAM (Green): I rise to convey the Green Party’s support for this Civil Defence Emergency Management Amendment Bill (No 2) and the extension of the deadline for reporting back. I have not been personally involved in the relevant committee; my colleague Jan Logie has been and is unable to be here. But a quick look through the background and the proposed legislation makes it clear that we must proceed along these lines. The legislation itself, of course, is not exactly earth-shattering, but we are dealing with earth-shattering matters, and so it needs to be taken very seriously. We need to make sure that the parliamentary and governmental procedure is much tighter, more rigorous, and more proactive for the future, because, as we all know, we are kind of in for it as the years go by.

The bill itself, as we know, amends the 2002 Civil Defence Emergency Management Act and the purpose is to provide that the relevant management strategy due to expire in January can remain in place until July 2019. The reason is, simply, that more time is needed for the technical advisory group’s findings to be considered. The group was set up, as I understand it, only around about April, so it has not had very much time. The question could be asked as to whether it should have been, as I think my colleague Clare Curran was alluding to, set up earlier—even years earlier.

But the Green Party does support the extension. The work is critical. I just segue from there into the comment that you might expect from me, that the onset of climate change will intensify the emergencies that we experience over the next decades. For example, globally, as I think has been pointed out in earlier examples of this kind of legislation, if we go back four decades to the 1970s, there were 78 natural disasters per year—78. Today there are 350. So that is within four decades.

New Zealand is now spending approximately $2 billion annually on natural disaster. We can go back to the Christchurch earthquakes, Kaikōura, Kāpiti floods, Port Hills fires, Edgecumbe floods, and it goes beyond that. It is earthquakes, floods, fires, and now, as we see around us, literally, slips; major slips, unexpected slips, and coastal erosion from sea-level rise. So this is the new world that we are in, and it is a new world that we are going to need to adapt to and our legislative planning is going to have to adapt to that as well.

It raises the question as to what a natural disaster is. Can certain disasters be averted or minimised? Disasters such as climate change, at least in its magnitude and frequency, is human-induced. So that leads us to a need for the recognition of the urgency and magnitude of preventive action through strong mitigation policies, and I do not wish to get off the subject of this fairly narrow technical focus but it is important to put it in the context of that broader need.

I would just finish by recalling, with a touch of poignancy, the report that I tabled in the House in late October or November 2011 about the Christchurch earthquake, following a series of public forums that I had held throughout Christchurch when I was there after the earthquake. I developed, in consultation with colleagues, a report on how to react as a nation and as a Christchurch City Council and as a Parliament to the tragic earthquake in Christchurch of 2011, and tabled a report with 26 recommendations. So it is documented for the House, and I just would humbly point out to Hon Scott Simpson to convey to Ministers that there is a report, lying there, tabled, since 2011, on recommendations that are relevant to this kind of technical advisory group—just a humble contribution. Thank you.

CLAYTON MITCHELL (NZ First): I am standing on behalf of New Zealand First to take a call on the Civil Defence Emergency Management Amendment Bill (No 2), and I just want to start my contribution by saying that this Government reminds me of The Lorax, in some part, because it seems to be flying by the seat of its pants. Here we are, with just 2 weeks to go until the 51st Parliament rises permanently, as we go into the 2017 elections, and then, lo and behold, it realises that: “Goodness me, we’d better do something urgently, because the legislation that is currently in place is running out pretty quickly.”

The process that was considered was even to hurry through the entire technical advisory group procedures, get all the hearings done—have fake hearings it was even said and stated—to try to get this through all stages fully and completely. That, of course, does not work.

The second option, which was put forward by Tracey Martin, stated that we should just put a simple extension to this. The Government came back and said, “Well, let’s make it 18 months.”, and we have said, “No, let’s make it 15 months.”, and now we have got the date that we have got to have this completed by—this civil defence emergency management fully done—I think it is April 2019.

Now, we cannot not support this; it is absolutely imperative that we do, with the number of events that we have got. We have had fires, floods, slips, even weather events and wind events. We have had tornadoes in Mount Maunganui—we have never had tornadoes in Mount Maunganui. And in 2 years, back to back, we have had rooves lifted off houses, and let us not forget about the high risk of tsunamis, with the island nation that we are, which we are not even remotely prepared for. We do not even have a tsunami warning system for the entire coastline of this country, so we cannot protect our people in this country, the way it sits at the moment.

We had the Minister of Internal Affairs, Peter Dunne, talking about the Fire and Emergency New Zealand Bill going through. After giving the fact that it was the 17th review in 21 years, he then spoke about, potentially: “Well, goodness me, we should have actually put the civil defence in and amongst that.” The whole thing is just an absolute dog’s breakfast, and we have some serious concerns about the stability and leadership of this Government if this is how they operate after 9 years in Government and we are down to the wire where we have to create an urgent debate, give extended hours, so that we can actually push through and extend the date on behalf of the Government.

We will be supporting it, because it would be silly not to. We would hope that over the 15 months that this Civil Defence Emergency Management Amendment Bill (No 2) is being put together by this technical advisory group that we have some serious consideration given to this increasing number of weather events around the country. We certainly would like to get our communities back on their feet as quickly and as easily as possible and, to ensure that we have the legislation to do that, we will certainly be a very, very supportive member of this House.

The oversight really falls in the lap of Gerry Brownlee, who was the Minister of Civil Defence and passed the buck on to Nathan Guy, who cannot be here as he has other appointments today—

Mr SPEAKER: Order!

CLAYTON MITCHELL: Sorry, Mr Speaker, I did not mean to show any disrespect by saying that, but I am just giving the respect that is his due; that he has actually seen this issue come up and is dealing with it effectively and efficiently. We support this extension of a date from January 2018 back to April in 2019 and we will be supporting this through. Thank you.

Hon TE URUROA FLAVELL (Co-Leader—Māori Party): Tēnā koe, Mr Speaker, mōrena, mōrena ki a tātau i tēnei ata. Ka nui te harikoa kua tae mai ki te kōrero ki tēnei pire mō te wā poto; me te tautoko anō hoki i tōna whāinga.

[Thank you, Mr Speaker, morning, and morning to us this morning. I am hugely delighted to have arrived here this morning to speak to this bill for a brief moment; I endorse its purpose as well.]

I come just for a short call on behalf of the Māori Party to say that we support this particular piece of legislation going all the way through—the Civil Defence Emergency Management Amendment Bill (No 2). I cannot but agree with some of the sentiments already expressed around our civil defence actions to address emergencies in this country being a little bit short from time to time, and I am pleased that there has been a technical advisory group that has been established. I commend the Minister of Civil Defence for that. I have had the opportunity to stand in front of that committee myself to present some observations as a Minister, and certainly as Minister for Māori Development, and have been involved with some of the emergencies that we have had recently.

My predecessor, the Hon Dr Pita Sharples, when Christchurch happened, grabbed Te Puni Kōkiri straightaway and got people down there and coordinated many of the medical responses available to help people out. The Māori wardens took their part. They established particular positions called Kaitoko Whānau, which were available to help out whānau. I was privileged, probably about 2 months ago, to go down to see the wrap-up of—I have forgotten the organisation, but, basically, the group that came together all across Christchurch to assist families to get into housing. It was a great occasion to go and acknowledge the work that had been done.

Not long after, the Whanganui floods came along, and, of course, all the communities up and down the river of Wanganui were impacted. I was able to fly up to the top into Wanganui to find a marae that had been basically washed through. Some of the wharenui had mud all the way through them. The impact on those communities where they had been separated off—I mean, it is hard enough now. They are separated off, as the Hon Chester Borrows will know, and separated out from much of the main communities as it is, but to be blocked off—they managed to get together and to support one another.

Kaikōura—I was down at Kaikōura; I had an opportunity to go there. But then it sort of came home to me, the impact some of these catastrophes have on readying and prompting Māori communities to come together. In Christchurch it happened, in Whanganui it happened, and at Kaikōura the marae, from my reports, was pretty much the centre of the response effort on behalf of all the agencies, but there were some cracks in how everybody responded to that particular crisis.

Then, of course, came Edgecumbe. That is when it really came home to me, because I, all of a sudden, found out that members of Parliament, for their particular areas, are not automatically advised about catastrophes in their area and where there have been civil defence alerts made. I thought that that would have been par for the course that local members of Parliament would have been advised, but that is not the case. So I went down to the bunker to have a look for myself and have a look at the operation—pretty good operation. I did not see the length and breadth of it, but that was a real worry. Then the second worry was that back in Rotorua and the Bay of Plenty, the regional council said there was a civil defence emergency but Rotorua said: “Oh no, there isn’t.” So there are some serious issues to be addressed there. Luckily, I had the opportunity to put that to the Minister.

Since that time, again and again and again, I say that one of the things that I hope comes out of the opportunity that we have, because we are extending the time for this report to go through, is that we dig deep down into the contribution of Māori organisations and communities in a response opportunity. I say that because in Kaikōura the marae itself, while they were overrun by people—fed the people—they got into scraps with a number of organisations like the Red Cross because they got the food flown in but, all of a sudden, everybody was arguing: “Oh, this is for me, this is for me, this is for me.” In fact, they ended up having to call the police in to try to bring some sanity to that. That is a worry, when the relief effort does not necessarily go straight through.

The second part was that at Edgecumbe, again, a big, huge voluntary force went in, but in behind the scenes there were marae—and I say Rautahi, I say Kōkōhīnau, I say Ngāti Tarāwhai marae, the people of Nga Maihi. Everybody pitched in to look after the Māori wardens, to look after the voluntary force, to look after all those who were associated with the response to Edgecumbe, and they actually opened the marae up for those people who were suffering from the fact that their houses had been, basically, lost. I took 1 day to go into one, and I spent only 1 day in one house cleaning out all the stuff in that one place. My gosh, there were hundreds of people there giving a hand.

So it is important that we take a good, serious look at our responses to emergencies in this country, and I am pleased that this legislation allows us to do that, because we must do it to ensure that we futureproof our responses from now on.

Bill read a first time.

Second Reading

Hon SCOTT SIMPSON (Minister of Statistics on behalf of the Minister of Civil Defence: I move, That the Civil Defence Emergency Management Amendment Bill (No 2) be now read a second time.

Bill read a second time.

In Committee

Clauses 1 to 4 and schedule

CLARE CURRAN (Labour—Dunedin South): This is a very simple bill—literally two pages, and one clause that is being changed. The actual provision that is being changed is the requirement that the National Civil Defence Emergency Management Strategy, which took effect on 10 January 2008, unless it is earlier amended or replaced, remains current until the close of 9 July 2019. That was to be closed early next year—in January next year—and the reason for the extension, as we have heard, is to allow for an extended consultation period following the findings of the technical advisory group (TAG), which is undertaking some very important work around the country at the moment and doing extensive discussions with a number of stakeholders on changes required to civil defence.

We have heard some interesting speeches so far in this debate. I really do acknowledge Te Ururoa Flavell’s contribution around the contribution of iwi to the response phase and also recovery in civil defence emergencies. I think we have seen some stark examples in recent times of just how necessary that iwi response is and how competent and organised it is in contrast to the normal responses that should be undertaken. I am hoping that out of this technical advisory group process, which, may I reiterate, did come about—and I do want to acknowledge Gerry Brownlee, the former Minister responsible for initiating the advisory group. He was under enormous political pressure and community pressure to do something, because there had been so many issues in how the national civil defence process was actually occurring.

I am not just putting the emphasis on MCDEM, as it is known—the Ministry of Civil Defence and Emergency Management—it is how the civil defence operates on the ground and how inconsistent it is around the country. Not only that, but the difficulties in getting information, making decisions, communicating those decisions, and getting actions to happen. When there is a major emergency, whether it is Edgecumbe and those floods, whether it is Kaikōura and that major earthquake and the tsunami alert, which, thankfully, did not hit most of our built-up coastline, our coastline where people live, and that was amazing luck. But the inconsistent, patchy communication that has occurred around those things, as well as the Christchurch fires and the lack of communication that occurred there, that potentially put homes at risk and possibly people. These things are all really important. So I want to seriously acknowledge the contribution that Minister Flavell made and also acknowledge the New Zealand First contribution around the increasing cost of civil defence events.

Our ministry is a very small ministry—52 people, I think, in that ministry. It is a massive job. A lot of the time it is a bureaucratic job: consulting on strategies, making sure local civil defence is actually doing what it is supposed to do, but when an emergency happens—and we are having, as was said, more and more of these emergencies happening every year—there has to be an instant response and a very good response. Now, 52 people and a budget of around $16 million is not enough, in my view. It is not sufficient to be able to manage the extraordinary events that are happening.

We have also got questions being raised about our legislative framework to declare emergencies. We have national emergencies and we have local emergencies. We have seen some local emergencies being declared in the last 12 months—a number of them; I cannot name exactly how many, because they seem to be happening every month or so. But we are seeing more and more of these emergencies being declared, and one of the questions that the TAG is dealing with is whether or not those two mechanisms: the declaring of a national emergency—the last one was Christchurch—and the declaring of a local emergency, are sufficient to wheel into action and make the decisions that need to be made. Are the people making those decisions the right people to be making those decisions, and are they making the right decisions? Are they getting the best information that they need?

This is why the Labour Party released a petition immediately after the Kaikōura earthquake last year to fund Geonet 24/7, because, as we discovered to our horror, the agency that we depend on to provide the best-possible intelligence when there is a major earthquake, does not operate on a round-the-clock basis. People have to be woken up. They have to turn their computers on. They have to analyse massive amounts of important data instantly, and then communicate that information to people, who then have phone conferences and make decisions about whether or not there should be a national tsunami alert issued.

That is not the best process for our country in 2017. Other countries—Japan, Chile, Indonesia, Malaysia—and all of the countries in the rim around which all those earthquakes are occurring have got much better processes. They put much more resources into this. Why do we not? Nearly 12,000 people signed that petition in just over a week, or within a couple of weeks. That petition is still before a select committee, because the Government still has not said whether it is going to invest in a 24/7 analysis and capacity for Geonet.

This is an issue that needs to be dealt with urgently for our country. This is not something that should go into the bureaucratic mire of going backwards and forwards. It is either something we do or we do not. I would like to hear from the Government as to whether it is going to fund a 24/7, round-the-clock service for Geonet, because that is one of the things that we need to sort out. The other thing we need to sort out is the inconsistency of the local civil defence response around our country, and the training and the capability that exists in each of our local civil defence and emergency management areas—I think there are around 16 of them. What the technical advisory group has discovered—and I have met with the technical advisory group; they have not reported yet, so I am not pre-empting their recommendations—is that there is major inconsistency, and so you have the ministry trying to do its best at the top with only 52 people, a small budget, and it is having to deal with civil defence and emergency management groups around the country that are inconsistent in their ability to respond and their willingness to respond quickly to major events.

As a result, you get hold-ups, you get miscommunications, and you get people paying patch protection. Thankfully, in my region, which has just had a major flooding event that affected most of my electorate, the capacity and capability of civil defence and emergency management has increased by enormous magnitude in the last 2 years, since the 2015 floods that affected South Dunedin, where there was an appalling response, or, pretty much, a non-response from civil defence and emergency management. Thankfully, that has improved, and the credit needs to go to the Dunedin City Council and the Otago Regional Council for pulling their fingers out and actually realising that they had to get their act together. But I do not know to what extent they were being told that they had to do that, from the top.

I think that is where our strategy, which we are discussing in this legislation, and the need for extended consultation, is where we need to be going to, as to just what are the expectations that it had of civil defence around the country, because it should not depend on where you live as to what kind of response you are going to get from your local civil defence area. There is major work to be done. It needs to be done. It needs to be reported on soon. The need for this legislation is sensible, and we support it.

CLAYTON MITCHELL (NZ First): I am just rising on behalf of New Zealand First to take a call on the Civil Defence Emergency Management Amendment Bill (No 2), which is a very, very, very small amendment. It is extending the time that this 10-year plan has been in place for another 15 months. Anybody can see that that needs to happen. The fact that we are here to debate this under extended hours with 2 weeks to go, as I have already said in my previous speech, really beggars belief in so far as the organisation—or disorganisation—of the Government to realise that this is the situation. This is a very, very small bill. It is only two pages, and one of those pages is taken up with an explanatory note as to why we are doing it.

Civil defence plays a major role in the recovery of communities in times of need. We have seen more and more of these events around the country. Most recently we have had the Edgecumbe floods. I had the pleasure, if you like, to travel through Edgecumbe a couple of weeks ago with the Rt Hon Winston Peters to talk to the people who are on the ground, doing the tidy up, and getting that community back on its feet. They need support. They need help. More importantly, that community needs to get back together so that it can actually become the community that it once was, without living in fear that that sort of thing is going to happen again. So there are a lot of questions in Edgecumbe to be asked, and the best way that we can respond is to help those communities get themselves back on their feet.

Kaikōura, obviously, is the one that we have had that was a huge earthquake, post the Christchurch earthquake, where we saw the ground and coastline raise by over 2 metres in some parts. Now, that is significant in so far as we narrowly avoided a huge catastrophe, because if that earth had moved out to sea by 2 metres, if we were talking even just 5 to 10 kilometres out to sea, we would have had a ginormous tsunami hit that coastline there in Rūnanga. It would have been a far bigger issue with the way that that community is nestled on the coastline. It does not make any sense that Geonet is not managed and monitored 24/7. It does not make any sense that we do not have any resilience or preparation for the event of a tsunami or a warning system for those people in that community.

I was on the ground speaking to some of the first responders at the fire station, the volunteers down there, and they went rushing down to the fire station to, obviously, get their equipment ready, to be prepared for the worst after that ginormous shake, and one of the young firemen said: “I looked out across the road to the ocean and I thought goodness me, the tide is out far.” Boats were on their sides. Rocks in the ocean that they had never seen before were apparent. And then he had an “Oh my God!” moment, thinking “What if the tsunami is coming?”. And, of course, there was nothing available. It was only by chance that they quickly got their fire truck up to high ground, expecting the worst. But what about all those families who were not up and looking out their window to see what the ocean was doing? He thought that the water was retreating, getting ready for that big wave that we all remember from the Boxing Day tsunami.

We seriously need to get our act together in this department—the civil defence emergency groups—to get those communities prepared for the worst. We have had weather events, we have had fire events, we have had slips and floods and slides and all sorts of problems, and we are not ready.

The other thing that I bring your attention to is the fact that one-third—one-third—of all the businesses that applied for a business support package to get their community back on their feet were denied. That is, surely, part of the responsibility of the Government and the Ministry of Civil Defence and Emergency Management to ensure that that recovery period comes in, yet a third of them were denied any business package support. So wages were lost for communities. They may not recover for many, many years, and we have to look at this with a technical advisory group behind it as a huge priority, and to put it into a ministry, a department, that is properly and adequately resourced and funded to ensure that these communities are prepared for the absolute worst. We just cannot believe that this has actually been going on for as long as it has, as inadequately as it has.

The other point to make is to commend, if you like, of Te Rūnanga o Ngāi Tahu, which was the marae that was dealing first-hand in Kaikōura with the hundreds and hundreds of displaced people in that community. They played an absolute pivotal role as a meeting point, as a place where people who had had their lives tipped upside down, literally, could reset, get fed, get dry, get warm. The weather was abysmal down there at that time of the year. I know; I was there, and I was drenched to the bones after about 4 hours of walking around. It just goes to show the community spirit, and that was driven largely from that marae.

But right around the country, whether it be the fires that were there, it is the volunteers who come out to help out, it is the neighbours who set up Facebook pages in communities to say: “Hey, come and stay at our place. We’ve got space, we’ve got beds, we’ve accommodation, we’ve got clothes.” We have to hero those heroes, and those heroes can come in all shapes and sizes and groups. Iwi have been very, very good right around this country looking after those displaced people, and so have many other community groups and non-Government organisations that step up to the plate at time of need. They also need to be assured that they have got the resources, because I know it came at a huge cost to the Ngāi Tahu who were feeding so many people and yet they were powerless to—dare I say—move on some of those people who were there rubbernecking, who were not adding to the clean-up; they were actually becoming a bit of a drain on the area themselves and there was not any support by way of Government to assist with the food packages and parcels and the cost to house and look after those people.

That is something that this technical advisory group, I hope, looks at seriously, because nobody would ever be worried about the time and effort and energy that they put into helping out their community, but some people do not have the fiscal resources to ensure that they can continue on that path, and this is exactly where the Government needs to pick up the pieces of a situation within the Ministry of Civil Defence and Emergency Management that is somewhat broken. Where that civil defence emergency management sits within a ministry needs to be decided. I think there is some merit in regards to what has been said and been discussed, albeit vaguely, by one of the Ministers with regards to putting civil defence inside Fire and Emergency. I think that is potentially a good place for it to be put in, and it certainly would be far better resourced.

We will be supporting this through. We would like to see this come to a timely conclusion and we would be very much a big part of the decision making moving forward post the election to ensure that we can have a better recovery response and resilience for civil defence incidents happening around the country. New Zealand First commends this bill to the Committee, but not the way it has been dealt with at such short notice. Like I say, this is very much The Lorax bill, flying by the seat of the pants, and it does beg questions from people in the community as to what this Government has been doing for 9 years. Thank you.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chairman. E ngā mema o Te Whare nei, tēnā tātou katoa. Like previous speakers in the Committee, I am happy to take a call on the Civil Defence Emergency Management Amendment Bill (No 2), a fairly small but very significant piece of legislation that we are supporting. Obviously, I am referring to the new Part 2, inserted by the schedule, of the particular bill where we are talking about extending it out for 12 months. First, I want to just say to all our people out there who work in the emergency space, those volunteers and those on the committee who respond in time of disaster—I want to acknowledge their efforts.

If there is one thing that I think this country should be expert at, it is, exactly, responding to emergencies. In my own electorate of Ikaroa-Rāwhiti I had the 1931 Napier earthquakes, where not only did the people at the time respond but, particularly, the Māori community of the Napier earthquakes responded, and often these stories are not told. I want to acknowledge the Minister for Māori Development, who made a contribution in the first reading of the bill. Māori involvement in emergencies can go right back in time, and often their response in the way they carry out in times of disaster gets lost in the mix. We are passing a piece of legislation to ensure that the technical advisory group comes back, I believe, with the advice to ensure that we have a world-class civil defence emergency management system in this country. That is why I am standing in support of this piece of legislation.

But the point is not only do we have the earthquake; we had the Cyclone Bola floods up the coast. People have referenced all the disasters we have had in the country, which goes to my point: if anything, we should have learnt from those multiple disasters in our recent history to ensure that the systems that kick into place and the agencies and the response teams are well supported. I take on the point of my colleague Clare Curran, who says that the resourcing of the agency that leads this is probably underfunded. I would support her plea to the Government that we need to look at resourcing the agency responsible for coming up with this world-class civil defence response system that we are debating in this Chamber today.

I want to acknowledge not just Māori, iwi, hapū, and whānau who have come to the fore in times of disaster—I want to talk about Edgecumbe. Colleagues from this side of the Chamber—Peeni Henare, Adrian Rurawhe—and I went to Edgecumbe, and we also mucked in to help the many, many volunteers. We were impressed by the set-up at the marae there in Te Teko. We got to talk to the lady who was leading the response team, who was housing the many volunteers who came not just from the district, not only from throughout New Zealand but we actually had international visitors who were actually sleeping at the marae, being fed by the marae, and being transported down to Edgecumbe to help with the clean-up. In talking to the lady—and the name escapes me, sorry—she was really, really clear that one of the difficulties in terms of the Edgecumbe response was the lack of coordination between the council, and she was talking about the Whakatāne District Council, and the community of Edgecumbe itself.

They had actually moved beyond just trying to help with the clean-up. They were actually trying to work in the space of providing emergency housing, and it was one of the discussions we had. They had a plan, so she pulled her team together. We wanted to make sure that her voice and her experience of the Edgecumbe disaster was not lost as we go forward. I mention that only because it is not just about the immediate response of helping people get out and the clean-up; it is also the flow-on effects around providing emergency housing. This particular team in Edgecumbe, I believe, having sat with them for a few hours and having her share her vision with us, was to there to ensure that on-the-ground information about where local housing was, how they could put people up, who required housing—that that piece of advice was not lost.

So when I hear that, as part of passing this particular bill in the House, there is the extension so that your technical advisory group can come back, my plea to the group is to make sure that we are talking to not just ourselves as bureaucrats, as politicians but we are actually talking to people on the ground. I do acknowledge and note that there has been engagement with Ngāi Tahu, Ngā Rauru Kītahi, Ngā Tāngata Tiaki o Whanganui, and Ngāti Apa, and that is fine. But what I want to plea is to ensure that the technical advisory group are talking to front-line people who are not only in the Edgecumbe example but, obviously, in the Kaikōura earthquakes and in Christchurch. They are gems of people who are not necessarily the chairmen of iwi or CEOs of iwi; they are actually the people on the ground who can provide insight that I think the technical advisers, in bringing back the advice to this House, would gain immeasurably by that insight and experience.

So my point to the Minister of Civil Defence, and through the Minister to the technical advisory group, is to make sure we are not just talking to heads, but we are talking to people on the ground. That is my advice and there have been plenty of individuals leading recovery efforts who would more than happily provide that experience and insight to the Minister.

So that is my small contribution on a very important piece of legislation. We need this extended, but I want to make sure that we are aiming for a very world-class emergency management system, given our history of dealing with disasters, and to give some assurances to all New Zealanders that this Government is committed to delivering and implementing that world-class system. Thank you very much.

Hon SCOTT SIMPSON (Minister of Statistics): I would like to just thank and acknowledge members who have contributed to this Committee stage of the bill for their contributions. I have been listening carefully to them, and I am sure that members of the technical advisory group will probably study the Hansard equally as carefully.

This bill makes a very minor amendment to the Civil Defence Emergency Management Act of 2002. It allows for the current National Civil Defence Emergency Management Strategy to be in place, and to continue in place, until 9 April 2019. So this, as members have said, is a technical, small, but important piece of legislation to enable, really, the work of the technical advisory group that has been set up to look at exactly the sorts of issues that members from around the Chamber have been highlighting. It will allow it to do its work in good time and to then report back, to consult with, and to digest the information from submissions from people, organisations, and professionals from around the countryside.

This piece of legislation allows it to do that, and that is exactly because of some of the concerns that have been raised about civil defence and our ability to respond in emergencies. I come from an electorate in the Coromandel where exactly those sorts of issues are foremost and front of mind for many people in my electorate, and have been over recent times. It is fair to say that the Government does have concerns about the current system, and that is why the technical advisory group has been established. So, just in conclusion, I want to once again thank members for their contributions in this Committee stage.

Clauses 1 to 4 and schedule agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading

Hon SCOTT SIMPSON (Minister of Statistics) on behalf of the Minister of Civil Defence: I move, That the Civil Defence Emergency Management Amendment Bill (No 2) be now read a third time.

Bill read a third time.

The House adjourned at 9.53 a.m. (Thursday)