Tuesday, 13 February 2018

TUESDAY, 13 FEBRUARY 2018

TUESDAY, 13 FEBRUARY 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Visitors

European Parliament—Delegation for Relations with Australia and New Zealand

SPEAKER: I am sure members would wish to welcome the European Parliament’s Delegation for Relations with Australia and New Zealand, led by the Chairperson, Ms Ulricke Müller, who is present in the gallery.

[Applause]

Oral Questions

Questions to Ministers

Charter Schools—Closures and Reintegration into State System

1. Hon PAULA BENNETT (Deputy Leader—National) on behalf of Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s policies?

Rt Hon JACINDA ARDERN (Prime Minister): Acknowledging that this question is in the name of the Rt Hon Bill English, can I start by acknowledging the extraordinary contribution that he has made to this House over many years, and share this side of the House’s best wishes for him and his family. And to answer the question: yes.

Hon Paula Bennett: Why is the Government going to close charter schools or insist that they must become special character schools?

Rt Hon JACINDA ARDERN: As we’ve long outlined, yes, it is our intention to put through legislation before the House that stops any future charter schools from opening. Currently, we’re working with existing ones to transition them to a model that sits within our current parameters, and that means focusing on having registered teachers teaching within the curriculum, and also under the budgets that our State schools expect as well.

Hon Paula Bennett: How does she reconcile her statements that the Government will act in “good faith” regarding closing charter schools, when her Minister of Education said, “My preferred option is to explore early termination of contracts”, and that if they don’t agree, then he reserves his right to issue a termination notice to existing contracts by the middle of May 2018?

Rt Hon JACINDA ARDERN: The Minister has continually said that his ambition and hope in going into negotiations with the schools is to transition them. That’s exactly what he’s doing.

Hon Paula Bennett: Does the Prime Minister see value in someone teaching at a school that has, perhaps, special Te Reo experience to give to those young people but may not have an education qualification, and does she see the value in them actually being in charter schools and able to teach?

Rt Hon JACINDA ARDERN: I absolutely see the value of more Te Reo in schools, which is why we’re focused on making sure that we have greater teacher supply in that area, because at the moment we’re significantly under-resourced and we need a lot of investment to make up for the deficit from the last nine years.

Hon Paula Bennett: What does she say to parents of children at charter schools that say, “Sadly, my experience of State schools here in Aotearoa is one where the word ‘inclusive’ does not always apply to children with special needs and that charter schools are literally the only option for them.”?

Rt Hon JACINDA ARDERN: One of the points that we have acknowledged is that what this whole process has shown us is that, actually, we do need to make it easier for special character schools to establish themselves. That has been a learning. So we’re focused, as I said, on transitioning those schools but, also, at the same time, making sure in the future, where there are particular needs that we could meet through a school of special character, that they’re able to establish themselves a little more easily.

Hon Paula Bennett: How does she reconcile keeping a school in Wairarapa open that has no children in it at all with closing schools that have over 1,000 children at them for little other reason than it appeases the education union?

Rt Hon JACINDA ARDERN: Our rationale has been very clear. We have a real focus on quality education, and all children, regardless of whether it’s 1,000 children or 800,000 children, deserve a quality education with registered teachers, with our expansive curriculum, with all the opportunity it provides, and with the same funding that goes to State schools and the majority of children.

Hon Paula Bennett: Where is the manaakitanga in closing He Puna Mārama Trust, which has two highly successful kaupapa Māori kura who “have no desire to return to a mainstream model that has continued to fail a large percentage of our students,”?

Rt Hon JACINDA ARDERN: To have a member stand up and make that claim does no justice to that school when the member sitting right next to me has been engaging directly with that school. We are working constructively to make sure that we get continuity for those kids, not putting fear out there, like the Opposition is.

Cyclone Gita—Assistance and Risk Reduction of Severe Weather Events

2. DARROCH BALL (NZ First) to the Minister of Foreign Affairs: What actions has the Government taken to assist Tonga and Samoa in the wake of Cyclone Gita?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): New Zealand has already taken action to support both countries in the wake of the devastating Cyclone Gita, and we are standing by to do more if requested. We’ve just approved the deployment of an RNZAF C-130 Hercules, after a verbal request from the Tongan Government, to help the 5,700 people seeking shelter in evacuation centres. Furthermore, I’ve approved an initial package of $750,000 to support relief efforts in Tonga. It will enable the Government of Tonga to help meet immediate needs, such as emergency shelter, water, and sanitation. With respect to Samoa, we have already approved $50,000 in emergency funds for the New Zealand High Commission in Apia. The high commission can use this funding to support Samoan efforts, and, as we get a clearer picture of demand, we’ll be ready to answer and respond.

Darroch Ball: What other support might New Zealand provide?

Rt Hon WINSTON PETERS: As the situation on the ground becomes clearer, we’ll support Governments with longer-term recovery and reconstruction. Following previous events, New Zealand has, for example, helped get the power network back up and running, repaired schools and other Government infrastructure, and ensured clean water is available.

Darroch Ball: The Pacific is increasingly vulnerable to severe weather events like this. What will the Government do to help our neighbours to be better able to withstand events of this nature in the future?

Rt Hon WINSTON PETERS: The Government is clear that climate change is driving an increase in severe weather events globally. This phenomenon is especially serious in the Pacific, which is increasingly vulnerable to tropical cyclones as well as rain events. This Government will increase its efforts to invest in risk reduction in climate change adaptation in the Pacific to improve the resilience of the region to natural disasters.

Schools—Māori-medium Education and Māori Charter Schools

3. Hon PAULA BENNETT (Deputy Leader—National) to the Associate Minister of Education (Māori Education): How will he ensure that children and young people remain engaged in Māori-medium education throughout their entire learning pathway and succeed as Māori?

Hon KELVIN DAVIS (Associate Minister of Education (Māori Education)): Through a number of initiatives, which include strengthening the supply of Māori language teachers, particularly those with higher language proficiency required for Māori-medium education. And, as the Prime Minister has just alluded to, we’re dealing with a large hole left by the previous Government in terms of both teacher supply and, in particular, Māori language teacher supply.

Hon Paula Bennett: How does he reconcile his ministerial responsibility to ensure young people engaged in Māori-medium education succeed as Māori with his failure to stand up for rangatahi at partnership schools like Te Kura Hourua o Whangarei Terenga Parāoa, who are succeeding as Māori?

Hon KELVIN DAVIS: The member’s wrong in her premise. I am standing up for Māori students, and, in fact, I’ve been on the phone regularly with both the senior manager of Te Kāpehu Whetū and the CEO of He Puna Mārama Trust. We’re very hopeful of an outcome of successfully transitioning from the current status through to whichever of the three options they decide to take up, and we hope to do it sooner than anticipated.

Hon Paula Bennett: So what does the Minister think is wrong with charter schools?

Hon KELVIN DAVIS: They didn’t provide a level playing field, and, in fact, the paper that was produced—[Interruption]—taihoa! [Interruption]

SPEAKER: Order! [Interruption] Order! The member will resume his seat. I think it would be good if at least I could hear, and I’m sure that no members of the Opposition would be able to hear. Sorry, before you go, I do want to particularly ask members in the second row of the National Party to be a little bit less regular in their interjections. Thank you.

Hon KELVIN DAVIS: Thank you, Mr Speaker. The paper that the Minister of Education proactively released outlined the differences between the charter schools and State schools. Namely, the issues are around governance, they’re around property, and they’re around teacher registration—nothing at all to do with education, nothing at all to do with student achievement, and nothing at all to do with pedagogy. Those people over there are worried more about the adults in the system than the children in the system.

Hon Paula Bennett: So does his level playing field actually apply to those young people who have been failed in mainstream schools and have found a home and an education that means they can succeed in these charter schools that his Government now wants to close?

Hon KELVIN DAVIS: The member obviously didn’t listen to the last answer. This has nothing to do with pedagogy and curriculum. That’s what we’re about. There’s nothing to stop those same schools doing exactly what they’ve done, in terms of teaching and learning, and what they’re doing now. These people on the other side of the House obviously do not know what’s going on.

Hon Paula Bennett: Does he see value in a kuia who may be teaching Te Reo at one of the schools but does not have an education qualification, yet is able to teach those young people in a way that has real value, and will that be lost if there can no longer be charter schools?

Hon KELVIN DAVIS: This gives us an opportunity to highlight our one-year free tertiary education policy. I would recommend that that kuia—and can I just correct her on her pronunciation; it is not “koo-eeya”, it’s “kwee-a”—will be able to participate in tertiary education and retrain as a teacher. That will mean that she will actually get higher pay. She can also operate with a limited authority to teach (LAT) at the moment.

Hon Paula Bennett: Does he agree with Willie Jackson, who said, on the subject of mainstream schools, “Why would you want to carry on funding a model which continues to marginalise those tamariki—admittedly, mostly Māori—who don’t fit in?”

SPEAKER: That is now so far away from the original question that it’s not an acceptable supplementary.

Hon Paula Bennett: It’s about Māori education.

SPEAKER: No, it’s not.

Hon Tracey Martin: Supplementary.

SPEAKER: Supplementary—Tracey Martin. We’ll give the member a chance to ask it again in a minute, but we’ll have Tracey Martin’s supplementary while she works on it.

Hon Tracey Martin: Can he confirm that under the statutory authority to teach provisions in the Education Act 1989, prior to amendments that opened charter schools, kuia and others with special character skills could already teach inside any public school in New Zealand?

Hon KELVIN DAVIS: In my 20 years in education, we regularly had members of the community come in and assist with teaching, be it kapa haka, be it Te Reo Māori classes. It’s obvious that that Opposition over there just aren’t in touch with this subject and don’t really know what’s going on.

Hon Paula Bennett: Will the Minister stand by his previous statement and resign if charter schools are closed?

Hon KELVIN DAVIS: There’ll be absolutely no need for me to resign. In this context, I did speak about the two charter schools up North, and, as I’ve said, I’ve been in close contact with the charter schools up North, and we hope to have an outcome very shortly. The other thing is it’s the model that’s going to close; it’s not the schools that are going to close. But they won’t let the facts get in the way of scaremongering.

Economy—Public Debt

4. Hon STEVEN JOYCE (National) to the Minister of Finance: Does he stand by his reported quote of 7 February 2018, “New Zealand is a country that always has to be aware of global shocks. It’s why we keep our public debt lower than other countries”?

Hon GRANT ROBERTSON (Minister of Finance): I stand by my actual statement, which is just slightly different. It is, “New Zealand is a country that always has to be aware of external shocks. It’s why we keep our public debt lower than a lot of other countries.” That is why the Government is committed to reducing net core Crown debt to 20 percent of GDP by 2022 in line with our Budget responsibility rules.

Hon Steven Joyce: Does the finance Minister agree with these statements, and I quote, “future generations of New Zealanders are again being saddled by a National Government with huge levels of debt”, and, and I quote, “Debt has skyrocketed under National”?

SPEAKER: Order! Neither of those are areas of the Minister’s responsibility.

Hon Steven Joyce: I raise a point of order, Mr Speaker. I just asked the Minister if he agreed with those particular statements, and he is welcome to agree or disagree with them as the Minister of Finance.

SPEAKER: Well, he might agree or he might not agree and he might even want to answer the question, but he does not have responsibility for it. Responsibility for ballooning net debt levels under National, as the member quoted, is certainly not an area that this Minister of Finance has responsibility for.

Hon Steven Joyce: I raise a point of order, Mr Speaker. It is a new point of order about the same question, and that is in relation to whether members are accountable once they become Ministers for what they have said in Hansard when they were previously members of Parliament.

SPEAKER: The answer to that is no.

Hon Steven Joyce: Why is he intending to increase our Government debt to $70 billion instead of reducing it to $56 billion, given his statement that the low level of public debt is a really important part of the New Zealand economy?

Hon GRANT ROBERTSON: What we are doing is measuring debt the same way that the previous Government did, and we’re actually reducing that as a percentage of GDP over the five years we are in office. We have a slower debt repayment track, because we have to address the failures of the previous Government to invest in critical infrastructure and social services.

Rt Hon Winston Peters: Can I ask the finance Minister whether he or his Government have any intention of exploding the debt by 800 percent, as happened the last time the Government changed?

SPEAKER: Order! What I’m going to do is I’m going to help the member by deleting the last phrase, which would make it a question within order, and asking the—

Rt Hon Winston Peters: I’ll rephrase it.

SPEAKER: No. I think we’re safer going this way.

Hon GRANT ROBERTSON: Absolutely not. This Government is committed to a responsible debt repayment track. What we are not going to do is see debt grow by $50 billion while we ended up, as a country, with the worst homelessness in the OECD.

Hon Steven Joyce: With the introduction by the Deputy Prime Minister of the previous Government’s record, can the member confirm that the statements he made—

SPEAKER: No! Order! I very specifically ruled that out. I think the member heard me.

Hon Steven Joyce: A different supplementary then, Mr Speaker. Does he stand by his statement, “When you look at the fundamentals of global economic growth, and indeed of the New Zealand economy, I am reasonably reassured by that. Essentially, the low level of public debt is a really important part of it.”, and can he reconcile that statement last week with the statements just made by both himself and the Deputy Prime Minister?

Hon GRANT ROBERTSON: I can very easily reconcile that. We have a debt repayment track that is responsible but also allows us to finally get on with building some houses, addressing the housing crisis, and dealing with the liabilities that that Minister left the country.

Hon Steven Joyce: Can he confirm that just a few months ago, he used to think debt was too high, and now he thinks our debt is low and that’s a positive thing, and he’s still going to increase debt anyway; and because of his three changing positions on debt, does he wonder why people are learning not to take him seriously?

Hon GRANT ROBERTSON: I know that member is distracted today by his own ambition, but what I can say to him is that since March last year, I have consistently been talking about reducing debt as a percentage of GDP, the same measure that member used, and, in the meantime, this Government won’t let social services run down, won’t create an infrastructure deficit, and we’ll actually use that debt to build some houses.

Economy—Inherited Economic Position and Reports

5. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What recent reports has he received on the Government’s financial statements?

Hon GRANT ROBERTSON (Minister of Finance): Today, Treasury released the financial statements for the Government for the six months to 31 December. They showed core Crown tax revenue was $597 million higher than forecast, at $40.4 billion; expenses were $166 million above forecast, at $39.6 billion; and that the operating balance before gains and losses was $779 million above forecast, at $1.1 billion. Meanwhile, core Crown net debt was 23.2 percent of GDP at the end of December, slightly lower than the 23.4 percent forecast in the half-yearly update.

Dr Duncan Webb: What were the drivers for revenue coming in higher than expected?

Hon GRANT ROBERTSON: Treasury’s analysis indicates that greater than expected employment growth at the end of the year contributed to source deductions coming in at $245 million higher than they expected in their PAYE forecast released in December.

Hon David Parker: What confident businesses!

Hon GRANT ROBERTSON: That’s right, Mr Parker. Treasury noted that they expect some of this variance to be permanent, and they will incorporate this positive variance into their Budget 2018 fiscal forecasts.

Dr Duncan Webb: How do the December statements fit with wider economic indicators?

Hon GRANT ROBERTSON: The trends seen in the financial statements fit with other recent indicators of economic activity. Unemployment fell to its lowest level in nine years in December, and the ANZ Job Ads series for January rose by the most in three years. Meanwhile, the ANZ-Roy Morgan Consumer Confidence index rose in January at the highest rate in three years, and employee confidence measured by the Westpac McDermott Miller Employment Confidence Index is at its highest level in nearly a decade. Business confidence in their own activity, which is most closely related with economic growth, remains positive. It’s early days, but the sun is shining, and Mr Joyce should cheer up.

Hon Steven Joyce: Does this mean that the finance Minister now accepts that he possibly inherited a good economic record—

SPEAKER: Order! Let’s start addressing—

Hon Steven Joyce: I just like to address the whole—does the finance Minister now accept that he’s inherited a very good economic performance in New Zealand from the previous Government, and the only statistics he forgot to mention in his recent spiel was about business confidence, which is down, and does he accept he will have to do something about that to maintain that good economic track record?

SPEAKER: Order! I am going to let the Minister answer the question, but I am going to counsel the finance spokesman for the National Party to restrict the length of his questions—succinct. One supplementary, succinct—not three or four and long.

Hon GRANT ROBERTSON: The member is clearly distracted today, because I did mention business confidence levels in my answer that I gave just now. The issue that the member needs to concern himself with is confidence levels in the National backbench.

Australia—Deportation of New Zealand Citizens, Rights of New Zealanders in Australia, and Trans-Tasman Relationship

6. Hon GERRY BROWNLEE (National—Ilam) to the Minister of Foreign Affairs: What are his three greatest priorities for the Foreign Affairs portfolio?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): One, restoring the ministry’s capabilities after nine years of woeful neglect; two, restoring official development assistance capacity from the malignant path of neglect and decline that the Government inherited; and, three, improving the character and quality of the foreign policy engagement of our country, to promote the prosperity and security of all New Zealanders.

Hon Gerry Brownlee: What particular areas of the trans-Tasman relationship did he and the Australian Foreign Minister Julie Bishop discuss in Auckland last week?

Rt Hon WINSTON PETERS: Basically, how we could dramatically improve our engagement and relationship as two countries that desperately need each other, more so than ever since 1946. The Foreign Minister of Australia understands that, and that’s the beginning of a new pathway forward.

Hon Gerry Brownlee: Did he raise with the Australian Foreign Minister his often stated concerns about the way in which New Zealand citizens have been treated by Australians when they are living in Australia?

Rt Hon WINSTON PETERS: I can say that, generically, with respect to two aspects of that, the answer is yes, and we formed the basis of a future discussion based on fundamental principles and law, with which she herself was very familiar.

Hon Gerry Brownlee: Does he expect that as a result of his discussions Australia will stop sending criminals who have committed their crimes in Australia back to New Zealand?

Rt Hon WINSTON PETERS: We made it very clear that the situation that we inherited from the previous New Zealand Government, which was unattended, despite all of those statements of a marvellous buddy relationship between the two Prime Ministers at the time, was not going to be the destiny that we were going to accept, and we have sought to have a positive, agreed way forward. That begins when the Prime Minister meets Prime Minister Turnbull in Australia next month.

Hon Gerry Brownlee: Then what does he expect that will mean with regards to the repatriation of Australian criminals to New Zealand?

Rt Hon WINSTON PETERS: Well, we’re ambitious for enlightened improvement.

Hon Gerry Brownlee: Can I just suggest that the Minister has on a number of occasions counselled people that words matter, so on this occasion, relating to—

SPEAKER: Sorry, is this a point of order or a question?

Hon Gerry Brownlee: No, it’s a question.

SPEAKER: OK. All right. It’s just—[Interruption]

Hon Gerry Brownlee: Eh? Look, you’re very good at analysing everybody else’s questions; stay with me. The—[Interruption]

SPEAKER: No, no. I do want to make it clear that the member has had some experience in asking them in the distant past, whereas not all of his colleagues have, in that way. So take the advice that I gave to his colleague.

Hon Gerry Brownlee: In this circumstance relating to this issue, what will be the enlightened result he’s looking for?

Rt Hon WINSTON PETERS: The enlightened result that we are looking forward to is an improvement in our relations so that some of the events that have caused great anxiety to New Zealanders, both in Australia and back home, do not occur in the future, and they start with the Australian political dichotomy of understanding how critical a country called New Zealand is out here in the Pacific, with all these major challenges we face. And that’s why we’re getting our funding up to do our role.

Hon Gerry Brownlee: Does that mean that post the Prime Minister’s discussions, the Australians will stop sending their criminals who have New Zealand citizenship back to New Zealand?

Rt Hon WINSTON PETERS: When you have a situation that you inherited, which is one of grave neglect—from the point of view of years of New Zealand neglect—it’s a bit rich to expect us in a matter of days to fix it. But what I am very confident about, because of the way both the Prime Minister, my senior colleagues, and I intend to engage with the Australian political system, is that there’s going to be a serious improvement.

Housing—KiwiBuild Official Advice and Supply

7. Hon MICHAEL WOODHOUSE (National) to the Minister of Housing and Urban Development: Does he agree with all official advice provided to him on the KiwiBuild programme; if not, what advice does he disagree with?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you, Mr Speaker. I receive a variety of advice on KiwiBuild, some of which I agree with and some of which I don’t agree with. It’s important that there’s a flow of free and frank advice from officials as the Government develops its plans to develop affordable housing for young Kiwi families.

Hon Michael Woodhouse: In that case, does he disagree with the advice provided to him by the Ministry of Business, Innovation and Employment (MBIE) that KiwiBuild, despite his modest projections of 16,000 over the next three years, will at best only deliver 8,000 and Treasury’s advice that half of that would come from the existing pipeline?

Hon PHIL TWYFORD: I do disagree with that.

Hon Michael Woodhouse: Why is the Minister so sure that the development sector will be able to respond to his projections of 16,000 houses in the next three years when Treasury, the Reserve Bank, MBIE, and a number of independent bank economists can find nothing in Government policies to suggest that that goal is even remotely achievable?

Hon PHIL TWYFORD: I have been open that initial advice from Treasury and MBIE didn’t tally. I got officials into my office and went through the details of the policy, and, as a result of that, Treasury reported in its half-yearly update a $5.4 billion cumulative investment in residential building over and above the normal investment by the private sector. A programme that is as large and ambitious as KiwiBuild places inevitable pressures on the Public Service and I’m comfortable in allowing them the time necessary to get up to speed with our ambition.

Hon Michael Woodhouse: Was that the same update wherein Treasury said that the ramp-up of construction of 10,000 houses per annum will be slower than signalled by Government, and the net increase in 2022 will be only 4,500, because 2,700 were already factored in with the Crown building programme and 2,800 will be purchased from existing private sector development?

Hon PHIL TWYFORD: I disagreed with Treasury’s earlier advice that KiwiBuild would deliver only half the number of houses projected in the early years due to offsetting against the private sector because of industry constraints. I don’t believe that Treasury at that point adequately took into account our policies designed to alleviate those constraints, but by the time of the half-year update, Treasury noted in the update that there were policies designed to alleviate those constraints that would include construction work visas to increase labour supply, infrastructure funding, prefabricated and modular housing designed to increase productivity potentially through the addition of foreign construction firms, and buying off the plan to alleviate finance access issues.

Hon Michael Woodhouse: Did those discussions with officials include the Minister’s promised 12 to 15 developments the size of Hobsonville that will be simultaneously constructed, and where and when will those developments take place?

Hon PHIL TWYFORD: That will take a little longer.

Hon Michael Woodhouse: I seek leave to table two documents—I can do them together or separately. One is an Official Information Act (OIA) response dated 29 January to the National leader’s office from the Ministry of Business, Innovation and Employment on KiwiBuild numbers, and an OIA request response to the National leader’s office from Treasury dated 30 January 2018.

SPEAKER: Just before I seek the leave, I want to check with the Minister whether those papers have followed the proactive approach of release that his colleagues are following. No, they haven’t. Is there any objection to them being tabled? There appears to be no objection. They can be tabled.

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

Housing—Ownership, Policies, and Reports

8. PAUL EAGLE (Labour—Rongotai) to the Minister of Housing and Urban Development: What reports has he received on the housing crisis?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): The stocktake of New Zealand’s housing, prepared by three independent experts—Professor Philippa Howden-Chapman, Alan Johnson of the Salvation Army, and economist Shamubeel Eaqub—released yesterday makes sobering reading and shows the national housing crisis is deeper and more entrenched than previously thought. Homelessness, transience, and substandard housing are having a lasting and sometimes even deadly effect on our youngest and our oldest. The report is a shocking indictment on the failure of the past Government to deal with the national housing crisis.

Paul Eagle: What does the stocktake report say about homeownership?

Hon PHIL TWYFORD: Well, the stocktake report warns that New Zealand is quickly becoming a society divided by the ownership of housing and its related wealth. It highlights the increasing number of elderly facing housing-related poverty because fewer and fewer are mortgage free, and some are renting on superannuation alone. Homeownership rates have fallen to the lowest levels in 60 years with Māori homeownership declining to only 28 percent.

Paul Eagle: What is the Government doing to fix the national housing crisis?

Hon PHIL TWYFORD: Well, the Government has an extensive reform agenda that includes KiwiBuild building 100,000 affordable homes, changes to the tenancy laws to provide security of tenure, urban development to encourage residential developments at scale and pace, the building of thousands of extra State houses, and an end to the past Government’s mass sell-off of State housing. We’re working on reforming the financing of infrastructure for new urban development and reforming the planning system—

SPEAKER: Order!

Hon PHIL TWYFORD: —to allow our cities—

SPEAKER: Order! That’s enough.

Health Services—Mental Health Services, National Bowel Screening, and Targets

9. Hon Dr JONATHAN COLEMAN (National—Northcote) to the Minister of Health: What are his priorities in the Health portfolio?

Hon Dr DAVID CLARK (Minister of Health): Better health for New Zealanders.

Hon Dr Jonathan Coleman: Which district health boards are having the roll-out of the National Bowel Screening Programme delayed?

Hon Dr DAVID CLARK: I have announced today a review of the bowel screening programme, and that is in order to seek assurance that New Zealanders can expect the bowel screening programme to roll out as it has previously been announced.

Hon Dr Jonathan Coleman: Why did the Taranaki Daily News of 18 January report him as saying that the national bowel—

SPEAKER: Order! Order! The member can start again and start with an area for which he is responsible. Why a newspaper reports him saying something is not his responsibility.

Hon Dr Jonathan Coleman: OK. Why has he said, as reported in the Taranaki Daily News on 18 January, that there is a delay to the national bowel screening roll-out nationally because “of insufficient funds to run the programme”?

Hon Dr DAVID CLARK: I’m advised that they have printed a retraction because they misquoted me.

Matt Doocey: Why will he not start accessing the $100 million contingency fund for mental health, given that he campaigned on more funding and the results of his mental health inquiry won’t be available until the end of the year?

Hon Dr DAVID CLARK: As I have previously made clear to this House, in the Budget documents that the previous Government passed shortly before it left office, not a single dollar was appropriated in the health portfolio for mental health initiatives. This Government believes that mental health is a priority. It will not take us nine years to make mental health a priority.

Matt Doocey: In light of those nine years, why, after so long in Opposition to prepare a plan for mental health, does he not have initiatives and a plan ready to roll out now?

Hon Dr DAVID CLARK: I will educate the member. We have announced already that we will fund primary healthcare better, so that people can have affordable access to care earlier for mild to moderate mental health conditions. We have announced that we will do nurses in schools to make sure that people have access to mental health support, and we have announced also that we will launch an inquiry into mental health services that will report back with further initiatives. We’re well ahead of where they were after nine long, long years.

Hon Dr Jonathan Coleman: What specific instructions has he given to the district health boards to improve access to elective surgery or to decrease emergency department waiting times or to ensure progress against the national cancer treatment target—what specific instructions?

Hon Dr DAVID CLARK: That sounds more like a leadership speech than a question. But I have been very clear, and I expect to be very clear in the letter in expectations that I write, as to what I expect from district health boards to deliver. I have inherited from the previous Minister a number of documents that went unsigned during his tenure. At least now we have some expectations in place.

Hon Dr Jonathan Coleman: I raise a point of order, Mr Speaker. A very straightforward question—I asked him what specific instructions had he issued.

SPEAKER: Well, I think you got an answer, which included none.

Hon Dr DAVID CLARK: I’m happy to clarify that answer.

SPEAKER: No.

Job Creation and Unemployment—Inequality, Unemployment Rate, and Young People Not in Employment, Education, or Training

10. Hon PAUL GOLDSMITH (National) to the Minister of Employment: Does he stand by all of his statements?

Hon WILLIE JACKSON (Minister of Employment): Yes, generally, and in the context that they’ve been made.

Hon Paul Goldsmith: What did he mean by his statement in the Manukau Courier yesterday, “For me, the real indicator of how successful we will be in helping New Zealanders get into work isn’t the unemployment rate—it’s actually the inequality rate.”?

Hon WILLIE JACKSON: I think that’s pretty self-explanatory and I can’t help it if the member of Parliament on the other side doesn’t understand the article. [Interruption]

SPEAKER: Is this a supplementary?

Hon Paul Goldsmith: No—well, I was pausing before raising a point of order, while you were thinking.

SPEAKER: Well, I’m not going to react to the five or six interjections. I was trying to decide whether the question had been addressed, and it certainly had.

Hon Paul Goldsmith: Can he tell House why he thinks New Zealand has the lowest unemployment rate in 10 years?

Hon WILLIE JACKSON: Well, this Government has done really well in the last few months. And, in the last three months, this Government has been able to achieve what that Government couldn’t do in nine years.

Hon Paul Goldsmith: Does he stand by his statement on Newstalk ZB regarding youth not in education, employment, or training: “These young people are tarred, because some of them, you know—their fathers are not in education, employment, and training. They need to get a bit of work to start off. Some of them are not ready for work. We give them pastoral care, we give assistance, and we do wrap-around programmes. They may need three to six months of training. They might do a job and leave the following week, or a few days—not good just starting on a job; they finish the next week or they start missing days.”; if so, why is he supporting the removal of 90-day trials, which have encouraged employers to take a chance on exactly these people?

Hon WILLIE JACKSON: I know the member doesn’t have any chance in terms of the future National Party leadership, but, the reality is, I stand by all the comments I made on Newstalk ZB.

Rt Hon Winston Peters: Can I ask the Minister, when he focused on the issue of employment being more an equity issue, does that mean that this Government is against the slave-trafficking and cheap wages and Third World conditions that the previous Government was condoning?

Hon WILLIE JACKSON: Yes, I absolutely concur with the Minister of Foreign Affairs. This Government is determined to address the inequities that the last Government left, and we’ll look after the regions, we’ll look after Māori, we’ll look after women. We’re happy with 4.5 percent, but we can do a lot better.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I just ask that you might have a look at that supplementary question asked by the Rt Hon Winston Peters. If that was set down as a primary question it couldn’t stand because it can’t be, in any way, substantiated whatsoever.

Rt Hon Winston Peters: Mr Speaker—

Hon Gerry Brownlee: No, I’m still speaking. We have a question being asked that is purely speculative, but then a Government Minister is allowed to respond on it when there was no responsibility that could be attributed to the Government Minister in this case.

Rt Hon Winston Peters: There was a report out, just days old now, talking about the people-trafficking in this country where employment was concerned. I would have thought every responsible New Zealander would have been alarmed by it, but, apparently, it’s only on this side of the House that that’s happening.

SPEAKER: Can I just say to Mr Brownlee—

Hon Gerry Brownlee: Just, no—I would like to speak to the point of order because a serious allegation has been made. The reality is that there would be no knowledge of that particularly unsavoury practice if in fact it were not reported and dealt with.

SPEAKER: I think, going to the original point of order, one of the problems for any side of the House with a question that says, “Does he stand by all of his statements?”, for the very reasons that the Opposition has asked it—because they want it to be wide and ask anything—it does leave the ability, on a supplementary, for Government members to do the same. I think that’s what the right honourable Deputy Prime Minister was doing.

Hon Gerry Brownlee: I go back to what I asked for in the first place, which was that you have a look at it, because—

SPEAKER: I certainly will.

Hon Gerry Brownlee: He did not ask a question in relation to the Minister’s statements; he presented the Minister with a statement and asked for a comment—quite a different thing.

SPEAKER: I will look at it.

Angie Warren-Clark: What is the Minister doing to address the needs of young people who are not in employment, education, or training?

Hon WILLIE JACKSON: Rangatahi unemployment is a key focus for this Government. I announced a few weeks ago the allocation of $13.27 million, under the He Poutama Rangatahi initiative, to support communities within four regions—Te Tai Tokerau, Eastern Bay of Plenty, Tai Rāwhiti, and Hawke’s Bay—to help connect young people to real jobs: jobs with dignity, identified by employers and those communities.

Hon Paul Goldsmith: Regarding young people not in employment, education, or training, is it still his view that mainstream schools have been failing Māori students, and “Why would you not want an alternative that can support and help our children fulfil their own dreams and aspirations?”

Hon WILLIE JACKSON: There’s no doubt that a few mainstream schools have failed our students, but in the main we’re doing a pretty good job out there. This Government is prepared to hear the concerns of our people out there, but, first and foremost, prioritise tamariki—children.

Hon Paul Goldsmith: Regarding young people not in employment, education, or training, is it still his view that we need to innovate in education, both in schools and at the tertiary level; and if so, why is he supporting shutting down charter schools?

Hon WILLIE JACKSON: I support the Government and our education initiatives. I’m a person who’s been intimately involved in charter schools, and I’ve seen the strengths, and sadly there’s a few weaknesses that we have to address. When schools have to come up with a million dollars and become entrepreneurs and businessmen, they’re not the types of schools that this Government will support.

Families Package—Effect on Working Families and Reports

11. ANAHILA KANONGATA’A-SUISUIKI (Labour) to the Minister for Social Development: Will the Families Package support working families; if so, how?

Hon CARMEL SEPULONI (Minister for Social Development): Absolutely. It’s not just families out of work or on a benefit who are struggling. We recognise that there are also a large number of New Zealanders who are trying to balance low-paid work with raising a family, and are finding it hard. Action this Government is taking under the Families Package will reduce inequality and put more money in the pockets of thousands of hard-working Kiwi families by boosting Working for Families, family tax credit payments, increasing the accommodation supplement, introducing a Best Start payment that gives families with a baby born or due on or after 1 July 2018 $60 a week until their first birthday and up to age three for lower-income families, and increasing paid parental leave to 26 weeks by 2020, which will provide greater financial certainty and confidence for working families. The Families Package enables—

SPEAKER: Order! This is question time, not speech time.

Anahila Kanongata’a-Suisuiki: What reports has the Minister received to indicate that poverty amongst those in work is an issue for New Zealand?

Hon CARMEL SEPULONI: The Household Incomes in New Zealand report is clear that after housing costs are taken into account, around 40 percent of poor children are from low-income families where there is at least one adult in full-time employment. The figures are very similar for families in material hardship. Around 40 to 50 percent have at least one adult in full-time employment. The working poor is now a common issue facing Governments in most OECD countries. While paid employment is the way out of poverty and hardship for most families, it needs to be sustainable. For many, a small change in income or an unexpected bill can be disastrous. That is why the Families Package is so important. It will increase the incomes of many low-income families with children by meaningful amounts and help these families thrive.

Anahila Kanongata’a-Suisuiki: In real terms, what will the Families Package deliver for working families?

Hon CARMEL SEPULONI: As part of the Families Package, the Working for Families abatement threshold is increasing from $36,350 to $42,700. These changes mean that around 26,000 more families are eligible for Working for Families tax credits in 2018-19. As a result of the Best Start tax credit, families will receive $60 per week in the first year of a child’s life. For those on lower incomes, those payments will continue until their child turns three. These changes are expected to benefit around 65,000 children born each year. Due to changes being made to the accommodation supplement, around 135,000 families will gain an average of $35,000 per week. Three hundred and eighty-four thousand New Zealand families are going to be better off with our Families Package.

Hon Louise Upston: How will giving $35,000 to someone earning $160,000 a year—say, an MP, for example—through their families and education policy help lift children out of poverty?

Hon CARMEL SEPULONI: This Families Package is about New Zealand families—low- to middle-income New Zealand families; 384,000 families will benefit from this package, many of them low-income families.

Digital Services—Recruitment of Chief Technology Officer

12. BRETT HUDSON (National) to the Minister of Broadcasting, Communications and Digital Media: Why has she decided to widen the search for New Zealand’s first Chief Technology Officer, and what will that mean in practice?

Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): The candidates who applied have an impressive range of skills and backgrounds, but no one person had all the attributes that we want. I will be seeking more input from the sector and perspectives from a new digital advisory group, which is being set up. The Chief Technology Officer is a vital role, and, as a responsible Government, we know we need to get this appointment right.

Brett Hudson: So what steps did she or officials undertake prior to the opening of applications for the Chief Technology Officer role to determine that there were people in New Zealand who were both capable and interested in the role?

Hon CLARE CURRAN: A recruitment process was undertaken. We are in the middle of that recruitment process. We have come to a decision that we need to widen that search. There were terms of reference established. There has been a search undertaken. We have decided to widen that search.

Brett Hudson: I raise a point of order, Mr Speaker. The question was quite specific about actions undertaken before that role was put out to the public. The Minister hasn’t—

SPEAKER: Ask the question again.

Brett Hudson: Thank you, Mr Speaker. What steps did she or officials undertake prior to the opening of applications for the Chief Technology Officer role to determine that there were people in New Zealand who were both capable and interested in the role?

Hon CLARE CURRAN: The position of the Chief Technology Officer has been widely canvassed for a number of years in public discussion, including in the policy of the Labour Party. There has been ongoing determination. As with any high-profile position, one doesn’t know what the outcome is going to be, and it is not predetermined. It was not a predetermined position. We want the right person for the job. This is a responsible Government, and we are undertaking a responsible process. [Interruption]

SPEAKER: Order!

Brett Hudson: What confidence can the public have that the Government Chief Technology Officer role is anything more than sloganeering policy, given the Minister undertook so little testing on the availability of suitable candidates prior to commencing the establishment of the role?

Hon CLARE CURRAN: A high degree of confidence that this Government is a responsible Government undertaking a responsible process about a position that has been widely canvassed, and we want the right person for the job, as does the rest of New Zealand.

Brett Hudson: What message does it send to the information and communications technology sector about her confidence in its capability, given she has decided that none of the more than 60 applicants are suitable for the Chief Technology Officer role?

Hon CLARE CURRAN: If the member was listening to my answer to his primary question, he would have heard that I am seeking more input from the sector and perspectives from a new digital advisory group, which is being set up as we speak.

Brett Hudson: What does it say about the role she has established that no one who the Minister deemed suitable for the job wants it?

Hon CLARE CURRAN: This Government wants the right person for the job. We are in the middle of a recruitment process for it. We are ambitious for New Zealand. We are ambitious for this position. We are undertaking a responsible process, and I think New Zealand can be reassured about that.

Urgent Debates Declined

Charter Schools—Announcement of Closure by Minister of Education

SPEAKER: I have received a letter from David Seymour seeking to debate, under Standing Order 389, the announcement by the Minister of Education that charter schools will be ended. This is a particular case of recent occurrence; the Minister’s announcement was made on the day he introduced legislation to give effect to it, which was 8 February this year. It is clearly a matter for which there is ministerial responsibility. Changes to the education system are significant matters.

When considering whether a matter requires the urgent attention of the House, the Speaker considers whether there is another parliamentary means of debating it, such as legislation—Speakers’ rulings 197(3) and 199(1). In this case, the Education Amendment Bill, which gives effect to the Minister’s announcement, is on the Order Paper and will soon be available for its first reading. The ending of charter schools will be subject to debate in the House and to select committee scrutiny. In light of that fact, I’m not convinced that the matter warrants a setting aside of the business of the House today. The application is therefore declined.

Bills

Child Poverty Reduction Bill

First Reading

Rt Hon JACINDA ARDERN (Minister for Child Poverty Reduction): I move, That the Child Poverty Reduction Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill.

It is both my honour and also, I believe, my duty to present this bill to the House today. I’m on record as having stated that child poverty and child poverty reduction is one of the reasons that I was motivated to get into politics and, ultimately, into this House, and my view on that issue remains absolutely undiminished to this day. It is why, as Prime Minister, I also hold the role of Minister for Child Poverty Reduction—that is how strongly I feel about this issue. It is why we initially proposed this legislation and why we prioritised it. We want to make sure that we make significant, substantial, and sustained action to reduce child poverty and hardship in New Zealand.

Now, I don’t believe that I need to recount the many images and stories that exist that anecdotally have quantified child poverty in this country for some time. They’re in the images of the empty lunch boxes, of the child doing homework by torchlight. I’m confident that those images have spoken to each and every member of this House and that we don’t question the existence of poverty in New Zealand—because it is real and it is debilitating.

As the Children’s Commissioner’s expert advisory group reported, “It means, for instance, a much higher chance of having insufficient nutritious food, going to school hungry, wearing worn-out shoes or going barefoot, having inadequate clothing, living in a cold, damp house and sleeping in a shared bed.” No matter what numbers we talk about, that is ultimately the face of poverty in Aotearoa.

Yet I know, and many of us believe, this is not what parents want for their children. Many sacrifice every cent they have to try and give the best future to their kids possible. So long as families and whānau live with inadequate income, this cannot be a debate in this House about blame, but is instead one that starts to talk about fixing the issue and ensuring that families finally get their dignity back.

Now, every Government, present and future, should be absolutely dedicated to the notion that children should get the very best start in life, free of poverty and hardship. I believe that that sentiment actually has long been shared in this Parliament, because there shouldn’t be politics in child poverty reduction. I believe that we are better than that, and the public, ultimately, has the right to expect better than that of us. Parties across this House have already pledged to act on child poverty in different forms, something that, ultimately, we should all celebrate, but that is why I am seeking cross-party support of this bill today.

The essence of this bill is to try and build enduring political accountability, consensus, and action on the issue of child poverty and to reduce it. It sets out in law a range of widely accepted income and hardship benchmarks for which we can be measured against and will report on; a requirement for successive Governments to, themselves, set targets around those measures; and, ultimately, a requirement to produce a strategy—the piece that actually details what a Government will do to take action on child poverty but also on child well-being more generally.

Now, all of this closely matches the member’s bill I had in my name in 2012, which was all about establishing measures so Governments could be held to account. Measurement will always be an important starting point. It’s not the whole picture, but it’s an important part of it. Currently, we do see debate around child poverty rates. They’re often contested by policy makers and commentators, citing different measures and often assuming that they’re directly comparable. Confusion over measurement can undermine public confidence. It diminishes the understanding of the issue, diminishes public accountability and debate. It ultimately doesn’t get us anywhere. That’s why this bill addresses to resolve that issue by setting four primary measures and six supplementary measures against which our performance—a Government’s performance—can then be judged.

The measures that are in this bill accord with international standards and scorecards, and they’ll be familiar to anyone, for instance, who is familiar with the Child Poverty Monitor or, for instance, the Ministry of Social Development’s detailed income reports. The bill includes both income and hardship primary measures, and I’ll detail them quickly now. The first is low income at less than 50 percent of the median disposable household income, without deducting housing costs. The second is the same 50 percent income measure, but this time after deducting housing costs, and against a fixed reference year. That enables us to unambiguously show how incomes have changed year to year, but, importantly, also to show the impact of housing costs, which is a particular issue for New Zealand at present. The third measure is material hardship—that tells us about whether or not a child’s basic needs are being met within their household—and the fourth measure is persistent low income or hardship. That one is an entirely new measure.

Now, taken together, they give us a good insight into the experiences of Kiwi households, families, and their children, but also give us a good way of determining what policies will make a difference to those families. Successive Governments will then be required to set both long-term and short-term targets so they can be held to account. The persistence measure, the new one I mentioned, that’s going to be particularly important, because we know now, through good work like the Dunedin study, the harmful and sometimes long-term impact of being exposed to child poverty, particularly in the early years. This risks cycles of poverty becoming repeated through generations. That’s why it is so important that we get that persistent poverty measure right and we target our Government policies where they’re needed, to try to address that generational impact. Sadly, we don’t currently have a suitable database and benchmarks, and that’s why this bill actually requires the Government Statistician to create one. Targets will then be set against those once that information is available.

But that’s not all. We’ve also put in place supplementary low-income and material hardship benchmarks. The reason we have those additional elements is they’ll help us better measure our progress against other countries. It recognises that, actually, different groups, experts, and future Governments will have their own view on what constitutes child poverty, and it gives us a more rounded picture of what’s going on in New Zealand as a whole.

Now, why does all of this matter? It matters because we all want to know, I believe, what is happening for our most disadvantaged children, so that we get our policies right. Governments present and future, though, will not be required to set particular targets. That’s based on a view that there will be legitimately different views around what is ambitious and what is not. Targets themselves are purposely, therefore, not included, to maintain that neutrality. The Government Statistician, however, must, independently of Ministers and Government, report annually on the rates of child poverty against the primary and supplementary measures.

I do want to flag here that, currently, the start dates for the bill are based on when we’ll have some of that initial income reporting available. My preference is that we actually bring our start dates forward from where the bill currently has them. I seek the view of the select committee and the public on that preference, given it’s not currently in the bill. Of course, we’ve also put in a requirement that the Public Finance Act will be the mechanism at each Budget by which we will be required to report on our progress in the House.

What I want to acknowledge is that although we will make sure targets are available for the public to comment on, the targets set by this Government are the most ambitious targets we have seen any Government set for poverty. A 5 percent rate has not been achieved by New Zealand that I can see in the records ever—ever. If the last Government believes that they can achieve that, then please, by all means, vote for this bill and support those targets, because the honest truth is we’ve never achieved them before, and if we do we’ll be amongst the best in the world. Finally, the well-being strategy is a requirement because we acknowledge this bill itself doesn’t change anything except our political accountability and the public’s ability to hold us to account. The strategy makes all of the difference. I commend this bill to the House, I commend it to the Opposition, and I ask for your support.

Hon PAULA BENNETT (Deputy Leader—National): Mr Speaker, thank you, and thank you for the opportunity to speak on the Child Poverty Reduction Bill. Forgive me if I stand here first off and say how ironic I find it that the Prime Minister stands up and lectures us about taking the politics out of child poverty, when one of the first things she did was remove the Better Public Services targets, which actually got to the heart of the causes of some child poverty and child deprivation, and didn’t have anything to replace them with. She said, “We will one day.”, but actually, politically, had to take them out and take them away, let alone let them continue to run until she could actually replace them with her own ideas. So she didn’t have ideas. They were very, very clear and specific targets that went to the heart of—for those that are in the first trimester of being pregnant, setting a target that 90 percent of them would actually be with a lead maternity caregiver. I would have thought that was something well worth backing, well worth getting behind. If the Prime Minister didn’t actually think that was something that would help children, then perhaps she could have let it go until she came up with some of her own ideas, but she couldn’t do it.

Excuse me if I find it a bit rich to be told that this is the, kind of, panacea and that some Governments will be more ambitious than others, like the feeling we got from her own would be—when, actually, it was the National Party that was more ambitious in the number of children that we could remove out of child poverty. We proved you could do it, by seeing 85,000 fewer children in poverty, and yet all we’ve got so far is bluster, blunder, and the talk of what might happen, not the actual evidence behind it.

We have an opportunity; it is right to do it right. We have an opportunity to make some significant changes, as we constantly should be as a Parliament, as we have an obligation to be doing as members of Parliament, for the children of this country. But this is a bill that has significant risk and has significant opportunity. The risk is that if this bill is enacted as it currently stands, it will do nothing and it will help no one. It will do nothing and it will help no one. It will simply be another well-intentioned piece of legislation that has absolutely zero impact on the families who are genuinely struggling every day. I’m sure the Prime Minister does not want to play the political spin game with the most vulnerable children in New Zealand, and I’m sure that she has good intentions, but one thing we know after nine years of working on these problems in Government is that good intentions count for very little for those children that are actually in their homes; it is your actions that will actually count.

At the moment, this bill is an empty symbol of this Government’s need to show how caring they are, but it achieves very little. On one level it sets targets for child poverty reduction, but my colleagues here in the National Party believe they are too low. Where is the ambition for our children? Where is this new ambitious Government that told us it was all going to be so much bigger? That is why the National Opposition plan to support this bill to the first reading but make absolutely no obligations of supporting it to a second reading. We have some key amendments that we will be putting forward and that we feel will dramatically strengthen it and really change the lives of New Zealand’s most vulnerable.

The first thing is the targets. The targets are too low. To go out there and say that it’s something like 70,000 over 10 years to be doing the—and we might get to 50,000; it’s too low. It’s just simply not ambitious enough. Work out your priorities. Work out what needs to be done in your next Budget. Put that into place. Look at your debt levels. Look at what needs to be done. Follow a great example, actually, of two previous finance Ministers under National and know that you actually can put more money genuinely into tens of thousands of New Zealanders’ homes that need it.

But poverty is just one problem that these children face. They face such a range of issues that have often been intergenerational and over a long period of time—and this bill does nothing to address the needs of those children in that way—family violence, drug and alcohol abuse, mental health problems, untreated health problems, and poor housing, to name a few. We had a plan in place addressing those very issues. We had targets that the Public Service had to measure themselves against. We pumped literally hundreds of millions into them. We saw crime coming down, fewer on benefit, and, actually, things improving. Now we see the eye off that ball and, instead, a lofty bill full of good intentions but with no actions or no substance actually behind it.

We want to see Better Public Services targets introduced into this bill, and we will be presenting a Supplementary Order Paper (SOP) along that line. We want to see that we get into the heart of things, like pregnant women getting access to the health outcomes and support that they really and truly need, that there is better housing, and that there are fewer people on welfare and living in decades of deprivation.

We want to support place-based initiatives. If we are serious about making change in those families’ lives, who are most vulnerable, we have to devolve power—which means money—back into our communities so that they can be self-determining on how that actually is spent, what programmes work the best, and put the most money into that and over a much longer period of time. To do that, you need social investment. Forgive me if I sound like I don’t quite believe all of the words that the Prime Minister was saying around taking the spin, politically, out of this stuff, when, actually, we can’t see the evidence behind the initiatives that she wants to run. We can’t see the backing on what actually, really, we do know will work.

We haven’t heard that support for social investment, which literally means that you’re getting the right funding into the right organisation that gets to the right people that gets into the heart of what the issues really are over a much longer period of time and can prove to those that are paying their taxes and working hard that the money is well spent and when it is actually able to present the evidence that it is not quickly enough, you can change and move another way. This bill does nothing for those children that are living in Kaikohe at the moment, actually getting support from a place-based initiative and worried whether or not that will still be run or will it go, like charter schools.

Excuse me if I find it just a little bit rich from a Prime Minister that tells me, “Put children first.” in the same week she is telling us that charter schools have got to go. So the kids that they care about need to be put first but not the children, actually, that are in charter schools and are, for the first time for many of them, getting an education that they can relate to at a place that they want to be every day, and are achieving at levels that they and their family hadn’t seen before. So to stand here now and say to take the politics out of what’s happening around children, I think, just speaks volumes.

We will be putting forward three different SOPs, one around actually setting some real targets that go into the heart of the Public Service and to those families that most need that support, and really get into that deprivation stuff. We will be putting forward an SOP around social investment, because, as the Prime Minister said, if you can’t measure it, you can’t measure whether it’s working right—you can get in there sooner and you can make a genuine difference, and that’s what the social investment approach actually believes in.

We will also be saying that the targets that the Labour - New Zealand First - Green Government are setting here are simply not ambitious enough. This can’t be as good as it gets for the kids that need us most, and, quite frankly, I am quite disappointed at the lack of ambition by this Labour Government.

So, as I say, we’ll see it to the first reading. We want to work with this. Let’s take the politics out and work together to improve this bill for the good of all of our children.

Hon CARMEL SEPULONI (Minister for Social Development): I wish to welcome the introduction of the Child Poverty Reduction Bill and the vision it embodies for the future of New Zealand. I just want to refer to some of the comments made by the previous speaker, Paula Bennett, and remind the House that that previous speaker was once the Minister for Social Development and, under her watch, child poverty skyrocketed to 220,000 children. Under her watch, 220,000 children were living in poverty. So when that member says, “This can’t be as good as it gets.”, I have to sit here shaking my head at that member, because we have to remind her that it was much, much worse under her watch. At least we are aspirational for New Zealand. We actually have a strategy and a plan for addressing the very urgent issue of child poverty in this country, unlike that Opposition, who sat on their hands for nine years and did nothing to help those children—nothing, member Louise Upston, who’s shaking her head.

We are all devastated in this House at the sight of children without their lunch, to see them throughout the day walking to school in the rain without a coat, or living in cold, damp houses. We are all devastated in this House by the number of children every winter that get admitted into our hospitals, into our emergency wards, with respiratory problems due to the conditions of the housing that they’re living in. Not only do we rightly find it unacceptable that some of our children live in households that can’t afford adequate food, clothing, secure housing, dental and medical care, and more; we don’t recognise it as the New Zealand we have come to believe in. So many New Zealanders say that they do not recognise the country that they are living in.

We see our country as somewhere that everybody gets a fair go, where there is equal opportunity, but we know that it’s not always so and that children often bear the brunt of it. The reality is that there are families living lives of quiet desperation, where losing a shift at work, an unexpected bill, or an illness can spell the difference between being able to feed your children or not. These families are often stressed, strung out, and ashamed of not being able to properly provide for their families, and we’ve all had examples of that in our own electorates whilst we’ve been out and about as members of Parliament.

I want to refer to one, and that’s an example that I used whilst in Opposition. The father in the family lost his job due to a workplace injury. Within a couple of weeks, they could no longer afford to pay their rent. At that point, they were evicted. They ended up—the mother, the father, and two children—living under a tarpaulin at the back of somebody’s house, and that was because they were on the brink of poverty that whole time. It only takes one bill—all of a sudden, you’ve lost your job, through no fault of your own, and you are, all of a sudden, in that desperate situation.

The experience of poverty in childhood goes much wider than the here and now. The impacts of persistent low income and material hardship are pervasive and cumulative, and for some groups of people, it’s also inescapable. Evidence suggests that a substantial number do not move out of the low-income zone over a seven-year period. There may be other reasons why children don’t thrive, but childhood poverty is, undoubtedly, one that matters, especially when the experience is severe and persistent, and the working poor form part of this picture. While adults in employment in households reduces the chances of poverty for children, it’s not a cure at all, and we know this is the case because around 40 percent of children living in poverty are living in households where there is at least one adult in full-time employment or self-employed.

Child poverty rates, after taking housing costs into account, are much higher now than they were in the 1980s. Most low-income households with children are now no better off or even worse off than their counterparts in the 1980s. We also know that Māori and Pasifika children are overrepresented in poverty statistics. Just under half of children in poverty are Māori or Pasifika, and rates of poverty and persistent poverty for Māori and Pasifika children are around double the rates of Pākehā, and I certainly see that in my own electorate, where we have a population of 24 percent Pacific, 14 percent Māori, and there is a higher number of children living in poverty, more households with three or more families living in that one household, and a higher proportion of sole-parent households. We see poverty in electorates like the one I am the MP for.

So what’s to be done? We all want answers, but when people’s lives are financially fragile and sometimes unstable or transient, answers can be elusive. So what to do about children living in poverty is the question.

DEPUTY SPEAKER: Could I ask the member, please, to come to the bill.

Hon CARMEL SEPULONI: I’m here to tell you that this bill forms a good deal of the answer. The legislation outlined in this bill will establish long-term targets to encourage Governments to have aspirational goals and to take actions that have both short-term and longer-term effects. At the same time, it will ensure milestones are put in place that build over time. This is critical to ensuring momentum in the fight to better children’s lives. In real terms, that means putting goals in place that ensure a long-term, sustained effort to address child poverty while taking action in the now to alleviate children’s suffering.

Each measure in the suite of measures is an important lens on the issue of child poverty. Setting them in primary legislation will help ensure that the actions of successive Governments can be better and more consistently judged. By setting goals for each of the four measures, the Government will make progress on several fronts for New Zealand children, and reaching and maintaining those long-term targets would place New Zealand alongside those countries who currently have the lowest rates of child poverty and material hardship. New Zealand has the opportunity and the moral obligation to ensure children are free from the burden of poverty. The Child Poverty Reduction Bill will drive a significant and sustained reduction in child poverty that lasts beyond successive Governments.

Alongside this, we have to look at other measures that we are putting in place to address the issue of child poverty in this country, and this Government has been proactive on that front. The Families Package will mean an increase—

DEPUTY SPEAKER: Well, that’s very interesting to the member, but a large part of the speech has not focused on the bill. So I ask the member, please, to keep it tight and focused on the bill.

Hon CARMEL SEPULONI: Madam Deputy Speaker, this bill will take this country a long way to addressing the very urgent issue of child poverty. I encourage all of the political parties in the House to do the right thing, to support this legislation, and to work with us to be able to adequately, effectively address the issues of poverty that New Zealanders are facing.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Deputy Speaker. At the start of my intervention, and with your indulgence, I want to reflect on the news today of the retirement of the Leader of the Opposition, the Rt Hon Bill English, who, I have no doubt, history will judge as one of the country’s great parliamentarians. Now, his legacy will very much be the steady financial acumen with which he steered this country through the global financial crisis and the Canterbury earthquakes, but my abiding memory of Mr English will be his passionate, unequivocal, energetic support for social investment and the families who would benefit from it.

This is very relevant to the Child Poverty Reduction Bill. If there is any regret that Mr English might have, it would be, I think, that the social investment programme wasn’t given three more years to really, really bed in. I think that the intervention from the Minister for Social Development and her comments in November, December last year indicate to me that she just does not understand social investment. She announced that it would be repackaged, retrenched back into the Ministry of Social Development, and that it would undergo significant changes. The Prime Minister herself, when looking at some of the Better Public Services (BPS) targets that the previous Government had, using rheumatic fever as an example, I think also shows how lacking in understanding the Government is about the need for agencies to work across silos in order to solve entrenched problems—the symptom, much less the cause, of which is child poverty. I think the more one drills into the issue of child poverty the more it’s clear that financial poverty is both a cause of dysfunction and a symptom of it. And if it were as simple as pouring more money into those families and then leaving them alone, we wouldn’t be here debating this bill.

Rheumatic fever is, I think, a very important barometer. Prior to social investment it was not unusual for hospitals to simply treat the pathology, discharge the child, and send them back into the very conditions that led them to those poor health outcomes. I sat around the table, watching as agencies were shoehorned out of their silo mentality and, through those targets, forced into directly addressing the causes of poverty and ill-health. Rheumatic fever was a really good example. It wasn’t simply OK for the hospital to send that child back into the cold, damp mouldy house from which he or she came. There was an obligation, because of the targets and the expectations the previous Government had, that they would be fixed so that that child would not come back.

The significant improvement, I think, we were starting to make and the transformative actions that Government departments were going through, in order to work collaboratively to reduce both the symptoms and causes of child poverty, were very, very promising. We will support this bill, but we do so with the condition that there will be a very serious look at the way in which those BPS targets—those social investment targets that were becoming so effective—were going to be addressed by the Government. I look forward to the repackaging, but I counsel the Minister that there was much good that was going on and it would be a terrible shame if, on a blind ideology, they were lost.

I want to just make two points about the bill. Firstly, the Prime Minister appears to have had something of a road to Damascus experience. I don’t know how many times I sat in this House when, in Opposition, Jacinda Ardern grilled the Minister for Social Development, the Hon Anne Tolley, on her refusal to be boxed into a corner and to say, “There is one single definition of child poverty.”, and the previous Minister was right. Now the Prime Minister agrees with her. We see in the explanatory note of the Child Poverty Reduction Bill, under “Measures”, and I quote, “material disadvantage is multi-dimensional and therefore more than 1 measure is needed to properly assess trends and understand which groups are over-represented.” It further says “—as noted, the level of poverty is a contestable notion and different views can reasonably be held:”. Well, if that’s not a road to Damascus experience for the Prime Minister, I don’t know what is, and I actually applaud her for backing down off the high horse she rode for years in Opposition, to come to the sensible conclusion that there is no one measure.

But the other particular feature of this bill, which we will support because it does no harm—but doesn’t do much—is the lack of ambition from the Government in actually solving child poverty. The previous Government took 85,000 children out of poverty. Its Family Incomes Package, passed in Budget 2017, which was mostly repealed by this present Government, in order that they can give my children completely free first-year tertiary education, is an example of both misguided targeting and a lack of ambition. The previous Government committed to taking 100,000 children out of poverty in this term of Parliament, and now we have a target that says that if they’re lucky, with a fair wind, and they don’t completely muck up the economy the way business is concerned they might do, that target is going to be 100,000 children out of poverty in 10 years. So tens of thousands of children are going to have to wait longer and longer for the Government to assist them into independence from the State, and, for their families, self-determination and a life better lived, because the Government wants to give my children free tertiary education.

Well, I’m sorry, but this bill lacks ambition. This bill grossly lacks ambition. I think what we heard from the Minister for Social Development is that knowing the data—knowing the numbers—is an important prerequisite to solving child poverty, but actions speak louder than words. Data will not change lives; policies and actions will.

Hon Clare Curran: Nine years.

Hon MICHAEL WOODHOUSE: Yes, there were nine years, and in nine years a far greater number of children were lifted out of poverty than at any time in this country’s history, and the previous Government was the first—it supported those families through a significant recession and then it raised benefit levels for the first time in 42 years. So I’ll stand very proudly on that record, Ms Curran—very proudly on that record—and I challenge the Government to change its targets, to at least match what the previous Government was prepared to do and had a plan to do, because data is not a plan. Knowing the target is not getting to the target, and all we have heard is rhetoric and numbers and good wishes, but no plan—in fact, a plan to unwind the very vehicle that the previous Government used to be able to lift those children out of poverty.

So we will support this bill. We will support it, but it is caveated by that very clear expectation that numbers are not enough. Actions are what are going to lift children out of poverty, and we will be holding this Government very strongly to account for their success or failure. I would love to be able to stand up in this House at the end of this Parliament and say they exceeded their own modest expectations, they did better than we thought they would—than they thought they would—but, unfortunately, I can’t see any reason why I would be able to do that in the future. I hope I’m wrong. I hope we can achieve the previous projections of child poverty reduction because we owe it to our children to do just that.

Hon TRACEY MARTIN (NZ First): Kia ora, Madam Deputy Speaker. Thank you very much. I rise on behalf of New Zealand First to speak on the Child Poverty Reduction Bill and I am going to try and stay apolitical, because what we have seen from the Opposition to date—and unfortunately from all members that have spoken—is a level of politics that has been interjected into this discussion. Considering that it appears that both sides of the House believe that this is worthy, believe that our children are worth it, believe that we need to work together to set this vision in place for our nation and then hold ourselves accountable regardless of who becomes a Government in the future, then let’s stick with that sort of wording. So I’m going to try. I mean I’m a political animal by nature but I am going to try.

There are things inside this bill that have yet to be mentioned and I want to talk about Part 3, “Amendments to Vulnerable Children Act 2014”. This bill actually makes amendments to change the title of the Vulnerable Children Act 2014 to the Children’s Act. I’m pleased to see it. As I have spoken in this House on many occasions since becoming the Minister for Children—and I acknowledge you, Madam Deputy Speaker, as previously the Minister for Social Development who implemented and created Oranga Tamariki—in my view, this is the first piece of legislation that starts to set us on that pathway that creates the vision for our children. All of us in New Zealand, raised here, understand and have heard often the statement that says that this is the best place to bring up kids—and, considering what many other nations are like, that is very true, for many other nations. But it’s not what it was, and we need to reassess and we need to hold ourselves accountable across this House and across whoever is in Government.

This is only the beginning of a pathway. What there is in Part 1—Part 1 is being replaced inside that Act by this piece of legislation and the Government strategy for improving children’s well-being and the Oranga Tamariki action plan. So those are all pieces that are going to fall out of this initial step. So not only does it put in place and finally into legislation—regardless of whose targets are whose targets, we finally now have in a piece of legislation at least something that we will be held to account on, and that’s an enormous step.

I’ve sat for years in this House arguing and debating on bills about whether we should feed our children. I’ve sat in this House and heard argument after argument about whether the State should provide meals for children at school. I acknowledge the previous Government put into place, through charities predominantly, a delivery of food in schools with the help of Fonterra and Sanitarium. We need to acknowledge those organisations, but it behoves us to continue to have that argument. Are they not our children?

I want to be clear, though, too, that by changing the name of the Act, Part 3 does not remove Oranga Tamariki’s focus on the 5,600-odd children who are in our care, nor does it change the focus of Oranga Tamariki and the Ministry for Children on the 92,000 children who have many of the indicators that we know mean that they are on the cusp of falling into our care. We need to concentrate on prevention and early intervention for those children. Part of this legislation, by making sure that we hold ourselves accountable, will go towards us making sure that none of those 92,000 fall over into that 5,600 that we currently must take from their whānau and family and actually hold the care in our possession as we work to bring them back into that safe and committed environment.

So nothing about the change of the name changes that, but what it does do is it stretches what is the focus of a Government—this Government, any Government—to all the children of New Zealand. We need to set—and it will be set through those other pieces of work that I’m talking about: the child’s well-being strategy, and the Oranga Tamariki action plan—a baseline that we will not allow our children to fall below. To do that we need to support their families, and I’ve heard exactly the same words from the Opposition today. I’ve heard exactly the same words when the members of the Opposition were Ministers. We know that children do not live in isolation. We know that we must support those who are vulnerable. We also know that many are vulnerable tomorrow who may not be vulnerable today.

The flexibility that we must have, the way that we see our citizens and our responsibility towards them—this is the first step on a different pathway, in my view. It says that the State must take responsibility for the people who placed us here and use their dollars to support them to make sure that they do not fall below a line that we will not accept that our citizens will live below: living in a car, living in a garage, living in mouldy bedrooms, not being able to afford to go to the doctor, not being able to afford to give lunch at school, not being able to do so many things that we know are the minimum we would expect for our citizens. This is the first step on that pathway, I believe, and I’m thrilled that the Opposition is joining with the Government to—and I acknowledge that they say that there is no guarantee, that this is the first step, that this is the first reading, and that they will work, I hope, constructively at select committee. If the targets are too low—

Hon Tim Macindoe: Of course, we will.

Hon TRACEY MARTIN: Thank you, Mr Macindoe, that’s great. If the targets are too low, then absolutely let’s have a talk about that, because regardless of who sits on this side of the House, they will be held accountable for those targets. So if the Opposition believes that the aspiration is too low and they want to set the aspiration higher, then let’s have that conversation, and then let’s have the conversation at the same time about how we’ll work together to make sure as a nation we reach those aspirations. How about we work together to try and figure out that in 2020 this won’t be a political issue either, that from this moment forward while we might talk about trade deals in 2020 and while we might talk about immigration and so on, let’s not make this the issue of the election campaign in 2020. Let’s say from this moment forward this is an apolitical conversation. We will all hold ourselves to account. We all care. We are all going to work towards it. Kia ora, Madam Deputy Speaker.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Deputy Speaker. I want to start my contribution in what, of course, is an important conversation for New Zealand. The Prime Minister has said that her intention is to have legislation that’s supported through the Parliament by all parties, so it’s a fairly bittersweet day on this side of the House as we acknowledge the resignation of our leader, Bill English, because I see that, of anyone in this Parliament based on their record and their results, he is the single most effective MP in terms of actually delivering results for the very children that we’ve been talking about today. You cannot deliver for the very vulnerable children we’re talking about unless you have an economy that’s growing, unless there is employment, and unless there are opportunities. And the guts of this, if we are serious about improving the lives and changing the lives of children living in poverty, is that social investment is the only path to do that. So I do want to just put on record my thanks to the Rt Hon Bill English for his leadership in this work.

My request to the Labour Prime Minister is to engage fully with this side of the House on the “how”. It’s all very well to set targets. I don’t think anyone would disagree that targets aren’t a good idea, which is why, as a Government, we set Better Public Services targets to focus results.

Our support beyond the first reading is conditional on three significant areas. I want to talk about those three significant areas, because there is no one out there who listens to the Prime Minister speaking about lifting children out of poverty that would disagree, but what everybody wants to know is how. How is the current Labour - New Zealand First - Green Government going to do it?

What we’ve seen, if we look at results and if we look at what has been achieved, is that 85,000 children have been lifted out of poverty in the last five years. So what the New Zealand public want to know is is the new Government paying attention to what worked, or is the new Government going to be ideologically driven and just abandon anything that the previous Government had in place that worked? That’s my challenge to that side of the House today—if that side of the House is authentic about solving the very challenges for families up and down this country, or is that side of the House going to abandon the very things that worked?

I want to give the House an example, because it actually speaks to the three areas that our deputy leader, Paula Bennett, spoke about in her letter. It’s about Better Public Services targets. It’s about actually being ambitious, and not just saying you want to achieve less than what was achieved in the last five years. I think that’s outrageous. I actually think it’s outrageous for a leader of a party whose supposed top priority is child poverty—but then, actually, housing is the top priority, and something else as well, so I’ve kind of lost track. It’s about how. It’s about how the Government will do it, and it becomes even more of a challenge to get the results that that side of the House is suggesting if you abandon what worked.

Let me give you an example of a place-based initiative. Yes, the Prime Minister was in Northland for five days. I’ve not heard that the Prime Minister visited the place-based initiatives in Ōtāngarei, in Kaitāia, or in Kaikohe, because when you meet with the families, the very families that this bill purports to work for—I want to know how many of the Ministers opposite have sat in front of those very families and their children to understand the challenges they face.

So if you look at the challenges, gosh, it’s kind of interesting. Look at the Better Public Services targets that we were measuring ourselves on: reducing—

Jan Logie: Wow! Come to my neighbourhood. Talk to the people in my street and give that speech.

Hon LOUISE UPSTON: Did you visit them in Northland? Did the Prime Minister meet—well, I haven’t had a yes.

So look at reducing long-term welfare dependence, look at healthy mums and babies, look at keeping kids healthy, look at safer kids, improving—

Hon Clare Curran: How many State houses have you visited?

Hon LOUISE UPSTON: Oh, they just don’t like to hear. The pathway to lifting children out of poverty is these very complex areas of dysfunction, and I can tell that side of the House that the problems will not be solved by writing a target and a number on the wall of your office. You’ve got to get out there. You’ve got to look at innovation and do things differently from how things have been done before. That is the reality.

Another part of it is it’s not just accountability and targets on politicians—what about on the Government departments? It’s disappointing, but it will make it challenging for the Government to not have a mechanism that forces Government departments to work together. I’m concerned we’ll see a withdrawal back into silos, and instead of focusing on the very children this bill is meant to serve, Government departments will retreat into silos because, all of a sudden, they are not having to deal with the complex issues.

I’ve had members opposite say, “Well, of course we know what’s happening in our community.”, and I was talking about Northland. So one of the things that Better Public Services targets enables you as a local advocate, as a member of Parliament, to do is to actually talk to the Government departments, talk to iwi, and talk to the community organisations, and ask them, “What are you doing differently about this particular issue?” So I’m concerned, and this side of the House is concerned, that the current Government is removing, because of ideology, the very things that worked.

So let me tell you about social investment. Let me tell you—

DEPUTY SPEAKER: No, I’d really like you to relate it to the bill.

Hon LOUISE UPSTON: In terms of the bill, our support is conditional on three things. Our support for this bill, past the first reading, is conditional on the continuation of Better Public Services targets, being more aspirational in terms of the targets you’ve set. Because this side of the House doesn’t think it’s good enough, when we’ve actually achieved more in the last five years. So we’re challenging the current Government to lift your level of aspiration for the very children we’re talking about.

Also, our support past the first reading is conditional on social investment. If that side of the House is serious about changing the lives of these children, we’re not just talking about financial poverty. We’re talking about poverty of health and we’re talking about poverty of opportunity. So in order to do that, you need to use information and data about them. These are real people in real need, and the invitation is to deliver the services much closer. In order to achieve the targets—

Hon Kris Faafoi: I thought the other guy said data wasn’t enough.

Hon LOUISE UPSTON: In terms of achieving the targets that the Government is setting—

Hon Kris Faafoi: Which one is it?

Hon LOUISE UPSTON: Well, your Minister for Social Development isn’t sure that she wants to support social investment via data. So if you talk to the very families that I’m talking about, the more you know about them the more you can deliver what they need. And it is interesting, going back to the place-based initiatives, that a very high proportion of the one in Northland is Māori, and yet your Minister of Finance is talking about removing—removing—funding for those programmes and initiatives that are focused on Māori. It’s no surprise, also, that this is the week that you’ve killed the schools that are delivering for Māori and Pacific Island students. So that side of the House is providing mixed messages.

I want to close by saying that this is about real people with real needs, and what this side of the House is looking for is real answers and real plans for how the Government intends to do it, because we’ve heard nothing. We’ve heard nothing. We’ve heard nothing about your plans for how.

So I think that if this Parliament is to support a bill unanimously through all stages, the New Zealand public is owed an explanation of the how. You can talk in fluff and you can talk in convoluted statements, but, at the end of the day, if you want to change lives, you’ve got to show us a plan.

JAN LOGIE (Green): Thank you, Madam Deputy Speaker. Actually, if I’m really honest, I rise with quite mixed feelings to speak to this bill. I support this bill in its entirety, but I’m really conscious of the reason that it’s required, which is entrenched, persistent poverty in our communities that has been going on and has just sky-rocketed from the 1980s and not been addressed since.

There are kids dying every year in this country because of low-income related diseases. We know that the hospitalisation rates are huge and that kids are struggling at school, or not being able to get to school because of that poverty; that they’re stressed and worried because of the stress that they’re seeing their parents under, trying to cope with just putting food on the table; and that kids are coming home after school to nothing in the fridge, and no heating in winter. We know that we can do better. And I know that for all of those people, this bill is going to feel odd. It’s going to feel like we’re accepting a degree of poverty in this country. And that’s uncomfortable, but the political reality is that we clearly need a set of measures to focus our efforts, to make sure that we are tracking in the right direction.

I do want to particularly acknowledge the work that has been going on for a really long time, calling this House to introduce legislation of this type. I think the work was started by Every Child Counts, and then was picked up by the Office for the Commissioner for Children and the expert advisory group, and then Tick for Kids in successive elections. All those advocates for our children have been asking us in this House to do this because they wanted some measure and some surety and some accountability around our commitment and our fine, fine words about how much it means to all of us to end poverty.

I do want to point to some of the debate that we’ve heard this afternoon. I don’t want to make this political, and I do want there to be unanimity in this House about moving forward based on what the experts have been telling us. But I do have to say that some of the stories I’ve heard from the Opposition today have really indicated to me the need for this bill and for having the four primary measures and the six supplementary measures. We’ve been hearing that the last National Government did really, really well on addressing child poverty. I’ve heard the figure—around 85,000 children lifted out of poverty under their time—and the suggestion that we’re not being ambitious enough, because, goodness me, they did so well! That is all in the face of the very real evidence of people queuing for food banks halfway down the street in Auckland, our food banks being overwhelmed and overrun, the continued hospitalisation rate, and the other statistics.

Looking at that one measure over a different time period tells us a very, very different picture about the success of that last Government’s approach to child poverty. When they chose that figure of 85,000, it was taking the number of children in poverty from the peak of the global financial crisis to now. Of course there was a reduced number. You would’ve had to be doing something so much worse wrong than what you were, for that number not to have gone down. Actually, your measure should have been from when you came into Government–sorry, Madam Deputy Speaker. That Opposition’s measure should have been from when they came into Government to the end, and they should have been looking across different measures, like this bill will set up, because if they had and were completely honest about what had happened, then they would have admitted that the latest household income survey showed that the number of children living beneath 60 percent of the median wage after housing costs, which is the relative income poverty line, is now 290,000—30,000 more than in 2008. Most importantly, between 2008 and 2016, the number of children experiencing the most severe poverty rose from 105,000 to 140,000. So the point of this bill is to have a suite of measures—a comprehensive look at how we are doing, to stop Governments cherry-picking numbers that put rhetoric and their own political ambition ahead of the well-being of our children. Enough. We need to put our children first.

We hear from that side that we need to be saying that actions are more important than the measures—absolutely. Absolutely—that is going be the test. But we need to make sure that we put in the measures around the political accountability, and the measures to drive public service action and involve our community, so that we are all part of the solution. That is another thing that this bill does. It provides for a legislative mandate for a strategy to focus on the well-being of our children. That will have focus areas around education and housing, and more wider well-being measures, so that we can get beyond just looking at what’s wrong, to looking at what is possible for our children. They deserve us as a country to be focusing on the best outcomes for them, and that does go beyond even the targets that will be enabled by this bill, of reducing poverty. Ultimately, we don’t want any poverty in this country; we want all of our children’s families to have enough to sustain themselves and for their children and everyone in our society to thrive.

I do, again, want to acknowledge all of those people who are impatient for change. I’m also impatient for change. It’s not good enough, and when I hear from other members about how things have improved, I think about the conversations I have with people in my street about how they are doing just everything they can to be able to get work and juggle studying, to be able to put food on the table and put the heat pump on in winter, and they just can’t manage it. They are going without food themselves, struggling to pay attention in their courses, to be able to give their kids just something to eat. That is not good enough, and that is no measure of success, and I am just embarrassed to have heard suggestions from previous speakers that we should be following in the footsteps of some system that produced that outcome. We want better for our kids. This bill, in itself, isn’t going to do it, but it’s going to create the framework and the accountability to make sure we’ve got a chance of doing it.

Finally, I also do want to acknowledge my previous colleague Metiria Turei, who a couple of years ago now introduced a bill very, very similar to this. She was listening to those experts in our community and introduced a bill that had a range of different measures and indicators and a set-up for a target and a strategy and child impact assessments. This is not dissimilar to what we introduced, we are pleased to see it, and we will be pursuing the actions associated with it with vigour. Kia ora.

Hon ALFRED NGARO (National): One of my favourite All Black captains is Tana Umaga. He is a famous Cook Islander—actually, he was Samoan, but that’s beside the point. He made this comment when he was confronted by the media. They had been talking about how rough the game was getting. They said we wanted to make the game a little bit more PC, a little bit more soft and cuddly, and here’s his famous words: “This is not tiddlywinks.”—this is not tiddlywinks.

So now we are here, in Parliament, where we are debating the issues, and the Government of the day, who were the Opposition of yesterday, who would hold us to account many different times, want us to play tiddlywinks. Well, I’m sorry but it’s not tiddlywinks. Be prepared, when you are the Government of today, to be held accountable. That’s absolutely what there is.

Hon Kris Faafoi: Argh!

Hon ALFRED NGARO: Mr Kris Faafoi, when he was on the other side, he was giving it to us. He was holding us to account, and so he should. So for the Government of today to expect us to just give you a free ride—I’m sorry. No free passes. Here we go. This is not tiddlywinks. This is the real deal. Let’s hold each other to account. There’ll be no soft and cuddlies; there’ll be no marshmallows. This is where, if you’ve got the ideas, if you think you’re just as good—in fact, here’s the thing that concerns me. The Prime Minister today stood up and said, “Let’s all be bipartisan. Let’s hold hands. Let’s sing ‘Kumbaya’, and somehow we’ll make child poverty disappear. Somehow we’ll make it all look good and rosy.” But we won’t. Why? Because the reality is you have to work hard. You are in that position today. You may not be there tomorrow, but you’re in that position today, so you’ll be held to account, and that’s what you will deserve and that’s what we’ll demand of you as well.

Since we’ve been talking about this bill, the first thing I want to say is, “What’s in a name?” Part 3 of the Child Poverty Reduction Bill talks about removing the name “vulnerable children”. We know that the Hon Tracey Martin had also been talking about this. She talked passionately about it in her speech, about the importance of why the name had to be removed. The reason why the name had to be removed was simply this: the stigma that it would give to children.

When the Government of today was the Opposition of yesterday, they would say to us, “How dare you name this bill ‘Vulnerable Children Oranga Tamariki’?” The stigma that it will give to children—why should children be called vulnerable? Why should children be treated in this way? There were many speeches and debates in this House, and now you’re going to remove “vulnerable children” but you’re going to put “child poverty”. So, what’s in a name? You’re going to remove the vulnerability but you’re going to keep the name “child poverty”. In other words, you’re going to say this. You’re going to say there are some children in our nation that are impoverished.

Look, I don’t resile from the fact there are children who are impoverished. But if you’re going to take the name “vulnerable children” but keep the name “child poverty”, well, I’ll tell you this: isn’t it interesting that you are doing this? It’s hypocritical to be able to talk about it in this way, because now you’re going to put a stigma on children. But, so be it. Now you’re deciding this. And yet, it was under this party—

ASSISTANT SPEAKER (Poto Williams): Order! I just remind the member not to bring the Speaker into the debate.

Hon ALFRED NGARO: Thank you, Madam Assistant Speaker. I do apologise for bringing you into the debate. The issue, though, is that the fact of the change in Part 3 of the bill—the changing of the name “vulnerable children”, removing that, to now become the Children’s Act, as part of the omnibus process of this bill, but we’re going to leave the name “child poverty”.

I will tell you the reasons why. Of the 230 that they’ve measured, the children that are impoverished, over 130 are Māori tamariki. They’re Māori tamariki. What we’re going to be saying is this: we’ll say those children are impoverished children. I know that the honourable matua Shane Jones and the Hon Kris Faafoi, we grew up in homes that probably today would be measured as being impoverished. I can remember the late Parekura Horomia standing up in this House, giving speeches about his times in Ruatōria, when there were dirt floors. The people of today would have judged that as being impoverished and incapable and unable. But they never chose to do that. Why? Because they believed in themselves that they had opportunity and they had aspiration.

My concern with this bill is that it will send a message out there. It will create a stigma, and that these children are now going to be labelled. Our children are going to be labelled. What it’s going to say is, “Who are the poor kids, and who are the kids that are the rich kids or the good kids that are doing well?” We will start to measure them and start to look at what they are doing. That’s what my concern is. We’re going to take the name “vulnerable” and leave the name “poverty”. We’re still keeping that name that will create a stigma. I think that’s going to be an interesting challenge as we go forward.

Let’s talk about the targets in this bill and what it’s proposing to put into place. And yet, many speakers have talked about this, about Better Public Services (BPS). I have spoken to people and they have said to me, “What does BPS mean, Better Public Services?” I acknowledge the Rt Hon Bill English because, actually, it was under his leadership that he said this, “Before we go out and ask anything of our communities, as a Government department, as a Government institution, let’s hold the mirror to ourselves. Let’s hold us to account.” That’s what Better Public Services is about. Then, when Better Public Services came to social investment, it was also saying, “So, here’s the how.”

So the mirror then turned around and said, “Are we doing a good job? Are we more of the problem, rather than the solution to the challenges and the issues—yes of poverty, yes of health, yes of education?” That’s what the BPS target was all about.

Then it went on to social investment. Social investment was simply this: when you look at the forecasting of the predictions and when we see this in the bill, when it talks about the growth, potentially, of those children that are in poverty—social investment took an approach as to how we would address these very issues that are actually trying to be addressed in this bill. It talked about this.

ASSISTANT SPEAKER (Poto Williams): Order! Can I just remind the member that we are talking about this particular bill, and not previous policy. I don’t see anywhere in this bill where those two elements are part of the bill. So would you come back to the substance of the bill?

Hon ALFRED NGARO: I raise a point of order, Madam Speaker. Can I just say that it’s the linking of the how—talking about the targets that are actually inside this bill.

ASSISTANT SPEAKER (Poto Williams): I have been watching this debate, and this has been raised as an issue with other speakers. I think we need to move on from that point, and talk about the content of the bill.

Hon ALFRED NGARO: The content of the bill talks about targets. In those targets, it sets out so-called ambitious targets of reducing child poverty by 100,000 over 10 years. Now, the challenge that we have for this bill is talking about the how, inside of those targets. So the challenge, in my debate over here, is how will this Government—it’s already taken away the targets. It’s going to remove the Better Public Services. We don’t know what it’s going to be doing in regard to social investment. It’s an institution. It’s there, in place.

I would encourage the Government of today to look at that social investment that’s actually been agreed upon by Treasury and other Government departments as a way of looking forward. What the social investment strategy does, in regard to targets like this, where those departments that will be impacted and be initiating the legislation of these targets—it says to them, this: when we’re forecasting what the growth may be, and in this case the target is around the reduction of children in poverty, in low-income households, then the how is where the social investment will do that. It will tell you how.

First of all, it asks this question. We can do that by raising taxes. Secondly, we can do that by increasing debt. By the way, the current Government is doing both. Thirdly, we can find a new way. Social investment then finds a new way, simply by doing this. In the targets that it’s producing inside this bill, I hope that it will talk about the data that becomes important, to ask the right question in regard to the fact: where can we invest early to create the greater income in the long-term approach?

Those are the things that I think are really important. I want to challenge this process. I’m actually on the Social Services and Community Committee, and we’re looking forward to this bill coming in. We look forward to the submissions and the debates that will talk about this. Again, in my speech, it’s the issue around the stigma that that may be creating. I hope that this doesn’t create a stigma. Under the National Government, we started removing the stigmatisation. Part 3 talks about the name “vulnerable children”, and there were some debates about that—whether we should still keep that. But it went with “oranga tamariki”. I would say, use the same principle around child poverty, because you can also find another name, rather than stigmatising children, to say that actually you’re poor children so we’re going to help you.

The thing that concerns me a lot about this bill is the fact that it’s removing the power of communities, and now it’s saying that actually the power is in the hands of the Government to make the changes. We heard some other speeches from the other side talking about the fact that we can surrogate this. Could it be lunches in schools that are mandatory, universal, throughout all schools, and so forth?

That, again, concerns me. If we’re thinking about the factors, that does not help communities that are wanting to find a way to better their outcomes, to better their situations, to be aspirational if we keep surrogating. I’m concerned, on this side, that what we’re going to have is a Government machinery that’s going to continue to grow, rather than devolving the opportunities for communities to become self-sustaining, self-determining, and taking their responsibilities for their whānau and their families.

We look forward to this bill coming in. We will be supporting it. We will be holding the Government to account. As I said before, at the beginning of my speech, this is not tiddlywinks. It is going to be a game that will be played hard. We will be holding you to account and challenging the very issues and the parts of this bill. There are parts that are good, that we support. There are other parts that we will challenge in our Supplementary Order Papers. I commend and commit this bill to the House.

ASSISTANT SPEAKER (Poto Williams): I understand the next call is a split call. Greg O’Connor has five minutes.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Madam Assistant Speaker. I rise to support this bill. This is a bill that I, and I’m sure many here, when they contemplated coming to this place—this is the type of legislation that we believed we’d be here passing: meaningful, life-changing legislation.

It’s quite interesting how the debate has gone to Better Public Services. In fact, while we’re talking about Better Public Services, the very difference with the way this bill is formulated is that it’s making us account, here, as to how this will be achieved. Better Public Services, of course, is about us imposing what we believe should be done—prescribing to public servants what should be done. Of course, those of us with a knowledge of the public sector know that you will get exactly what you want, and we’re very conscious that over the next several years the gaps—as public servants gave Government what they wanted and were forced to ignore the important long-term strategies, then those things that were ignored are the very things that are going to bite us on our proverbial backsides over the next few years. So what this bill does is introduce targets. It is a broad target that we here now, through the Budget, through the processes, will be forced to look at, in terms of how what we’re doing is going to impact on those most vulnerable in New Zealand.

In my maiden speech, I spoke of being an undercover police officer and being introduced to a side of society—I hope this is not unparliamentary, Madam Assistant Speaker: I regard myself as very much a “lucky sperma”. That’s someone who was born into a loving home; someone who had warmth, safety, and education; and someone who was well fed. When I met people who didn’t have those things—people who were born without those advantages who were smarter than me, who were cleverer than me—what I understood was they were never going to be in a position to achieve what I achieved, for that very reason. So when I look at this bill, what I look at is that by ensuring that we all understand what the end result is—as we spell it out in the bill, what we want is to ensure that we know what we are looking at. So when we ask, for example, that a budgetary statement be made, that it be mentioned, and that those who are going to be overseeing this are required to account on a broad measure, we understand what will succeed and what success will look like.

One of the issues in the past, when we sought to define what poverty is—I remember a lawyer who said in court, when the question of poverty came up, “Well, poverty is crooked teeth and no musical instrument.” I think we’ve gone a little bit beyond that. I think we need to understand just what poverty is, and poverty is—as I went back—a lack of those things; a lack of ability to see your way out of the circumstances of your birth. I go back to that term I used—that our “lucky sperm” puts us in a situation that means that we are more likely to be a successful member of our society than those others who don’t have that same luck.

So I commend this bill. I believe that it is a change in that whole focus that we, as a House—this is forcing us to be accountable ourselves for what we achieve, so I commend this bill. Thank you, Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): I call Denise Lee—five minutes.

DENISE LEE (National—Maungakiekie): Thank you, Madam Assistant Speaker. I’m happy to take a call on this, the first reading. The country has proved that we care about this topic and we have a heart and we want to do right together as a nation. Anyone can talk about being ambitious but the proof is always, of course, in the pudding. But let’s not break out the pavlova just yet. The details are where this bill falls just a little flat, so we’re going to be putting up some amendments with some incredible detail in order to beef up the bill. Those amendments are conditional on our further support of the passage of this bill.

The first reading today has some coincidental timing for the team on this side of the House. We all know of Bill English’s announcement today. He is the architect and the champion of the social investment approach—a key and personal pillar for him and his personal journey, and now that of the National Party. I’ve been in live debates where senior members of the Government sitting across the House from me today have decried social investment as bad targeting, bullying, punitive, and overreaching. Well, do you know what’s overreaching? Letting families slip by because the Government wants a one-size-fits-all approach, throwing up new targets while at the same time getting all the good ones gone.

Our amendments to this bill will restore frameworks that are not overreaching; they are reaching out to specific families in a compassionate and in a careful, targeted way. Will the Government argue with our amendments setting targets that require increased attendance of children at early childhood centres and at school—is there a problem with that? A substantial reduction in the number of children being physically and sexually abused—a problem with that? Getting to 100 percent of pregnant women registered with a lead maternity carer in their first trimester—yes, that’s right, none of these are in the bill.

The opening statement of this bill says, and I quote, “Measurement is an important starting point.” We have a responsibility to act. Governments—successive Governments—need to make a commitment. Well, that was in place. Our team had committed to 100,000 kids being lifted out of poverty. We’re not in Government but we still stand by that. And how long for our team to get there? Three years. How long for this Government to get there? Ten years.

Finally, the purpose of this legislation is to achieve significant and sustained reduction in child poverty. You can read that in the bill. Well then—grow the economy. Targets are good, but the chequebook says all: $2.8 billion on free fees; winter payments to couples who will go on holiday to Aussie with them—

Hon Shane Jones: A billion trees.

DENISE LEE: A billion trees slush fund. We call on the Government to accept our amendments, reprioritise the spending, and get on with the actual detail.

ASSISTANT SPEAKER (Poto Williams): I call Priyanca Radhakrishnan—you have five minutes.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Assistant Speaker. I am absolutely delighted to stand up and take a call on the Child Poverty Reduction Bill, and I’m going to begin with a quote by Nelson Mandela: “There can be no keener revelation of a society’s soul than the way in which it treats its children.” Well, I’m actually really proud that, thanks to this Government’s leadership on this bill, our society’s soul is back on track.

This Government is ambitious; we’re ambitious for New Zealand, and it’s actually been quite heartbreaking to stand here and listen to members opposite talk about how disappointed they are in this bill, how it falls flat, and how we need to lift levels of aspiration, when they had nine years to do just that and didn’t. What we’re seeing now, the reason that the need for this bill is actually so dire, is an increase in homelessness. We’ve seen the gap between the rich and the poor widen—it’s the widest that it’s ever been. The rich are getting richer and the poor are getting poorer. We’ve seen the crises: the mental health crisis and the housing crisis.

As I reflect on what this bill will achieve, I think back to what I’ve seen in the Maungakiekie electorate where I’ve been based. I’ve seen the impact of transient housing, of substandard housing—the impact that those things have on health, on educational achievement, on employment; not just the number of jobs that have been created, but the quality of jobs that people have, and the impact that that has on the children who live there.

I think back to specific children I’ve met and talked to: a nine-year-old boy at a school that I visited who had been through subsequent or successive foster homes, who had been subjected to horrific levels of sexual abuse, who didn’t have shoes to go to school. That’s what we’re talking about; that’s the face of child poverty. It’s a phrase that hides immense pain, struggle, and suffering. Members on this side of the House have gone into what that looks like; what that looks like for families who live in that poverty—entrenched, intergenerational poverty, where children are living without hope. That’s why I’m proud of the ambitions of this Government.

Now, members opposite have brought up social investment as well. Let me tell you why we think that is so lacking in ambition—it’s all about limiting liabilities; it’s about cost-cutting. It’s not about what we can do as a Government to ensure that our children thrive and that New Zealand is the best place to be a child.

That’s what this bill will do. This bill will encourage successive Governments to focus on child poverty reduction. It actually is an invitation to New Zealand to hold us to account. It’s about political accountability. It’s about published targets. It’s about setting measures, targets, and a strategy that will reduce child poverty. This Government is ambitious for our environment and our people.

Manaaki whenua.

Manaaki tāngata.

Manaaki wāhine.

Manaaki tamariki.

Haere whakamua.

Care for the land, care for the people, care for the women and the children, and together we will go forward. Thank you.

DAVID SEYMOUR (Leader—ACT): Thank you, Madam Assistant Speaker. If only we could make the world a better place simply by having good intentions, then this Labour Government would have solved all of our problems. That was a beautiful speech with beautiful intent by the member who has just resumed her seat, Priyanca Radhakrishnan. Yet, sadly, it will do nothing to lift any child out of poverty—unless, of course, they are suffering from a poverty of nice words, in which case we’ve just seen the fix; it is in.

The fact of the matter is that measuring poverty and inequality—Madam Assistant Speaker, I’m sure you won’t be surprised to know—is actually quite an interesting field. You can divide poverty and inequality measures up into measures that are relative and measures that are absolute—that is, measures that try to compare the incomes of different households, and measures that try to compare the incomes of different households against some absolute baseline.

The problem with the measures in this bill is that, with the possible exception of the absolute material hardship, they are all based on relative measures. In other words, they say, “Is a particular household under 50 percent of the median?” or “Is it under 60 percent of the median before or after housing costs?” Well, that’s great, but the difficulty with that is even if everybody gets richer, we end up with the same level of poverty. There have been times in history—examples of this in Ireland and in Hungary, are set out excellently in the National Business Review by Lindsay Mitchell this week—where countries have gotten poorer, but, because the income distribution closed up, their measures told us there was less poverty. So let’s be clear. This is based on relative measures of poverty, and it does not tell us what the real material hardship faced by children is.

The second way you can divide up income and poverty measures is that you can divide them up by whether they are based on incomes or expenditures. What’s interesting is that you can have households with relatively low incomes that nevertheless are consuming: they are spending on the right things and avoiding poverty. You can have households—and I might have lived in a few like this during university—that are OK for income but, because of very poor spending decisions, do not provide the necessaries that are required to live a prosperous life.

That is the reality. We are measuring relative incomes of different households, but this bill does not tell us anything about the actual levels of consumption. Are the kids getting enough food? Are their teeth being brushed? Are they getting to school at the right time? Are they consuming housing of a particular standard that allows them to live healthy lives? This bill won’t answer any of these questions, and it’s worse than doing nothing, because it brings us the distraction that as long as the chief statistician tells us that at least the family could have afforded to do that—or, actually, not even that: at least the family had enough income relative to other families to do those things—then they’re fine. It is worse than doing nothing, because it is a distraction from the real deprivation, the real neglect of children, that is harrowing in this country and damaging New Zealand’s future.

If the bill had said the following, “We will instruct the chief statistician to replicate the Dunedin study on a smaller scale every year; we will go and test, in randomly selected households, how many children are getting the basic necessities of life.”, then I would have supported this bill. The ACT Party would support a bill that targeted real children’s welfare, not the statistical incomes that their parents are said to have relative to other parents in the neighbourhood.

Sadly, the bill does not do that, but if it did, the Government would have to face up to some hard facts. They’d have to fix the housing market—that’s why we have deprivation. They’d have to fix education—that’s why we have deprivation. They’d have to fix welfare dependency—that’s why we have poverty and deprivation. But they’ve taken a soft option. They’ve distracted the country with relative income measures rather than measuring the real things that matter: how are children looked after; are they neglected; what do they consume; and do they have a real future in this country. The ACT Party will stand alone in Parliament opposing this bill, because it’s worse than nothing. It’s a crock.

JO HAYES (National): Thank you, Madam Assistant Speaker. I stand to take a call on the Child Poverty Reduction Bill. I agree with everything that this side has said about this particular bill.

David Seymour: Including me?

JO HAYES: It will go nowhere—including Mr Seymour over there. It will go nowhere because it is about Government working with Government agencies telling people what to do and trying to measure that. You won’t actually get to measure anything, because one of the things—when I’ve worked with whānau, out there in their communities—is it is always policies and bills and pieces of legislation like this that come over the top of whānau and bash them over the head with it.

They’re saying this is an ambitious bill. I can tell you right now, the Government wouldn’t know ambition if it punched them in the face—I can tell you right now. They wouldn’t know it, because they have never listened to the people that are on the ground.

Now, let’s take a look at Whānau Ora. I haven’t heard anything from the Government about Whānau Ora, yet this particular bill actually targets—the target population for child poverty is located within the Māori populations, yet we have a number of really good initiatives that are actually making headway amongst whānau under the Whānau Ora framework.

When I look at clause 45 in Part 3 of this particular bill, replacement Part 1 of the Vulnerable Children Act, I look at it and I think, “Government strategy for improving children’s well-being and oranga tamariki action plan.” So “oranga tamariki”—going to work with the chief executive, going to work with ministries, and Government agencies to make sure that they’re achieving the measures that Government and the agencies are putting together. I look at it and I think “oranga tamariki”—“oranga tamariki”—where are the children in this bill? Where are the children advisers in this bill? The Minister’s going to talk to the agencies, but where is the voice of youth in this bill? There is no voice of youth in this bill.

I am not going to repeat everything that everybody else has said that’s wrong with this bill, because at the end of the day this is a bill about children, for children, yet children aren’t even in it. They’re going to get dealt to. Agencies are going to go into communities—and I know; I’ve worked in communities where Government policy has stood over the top and bashed us around the head.

Hon Kris Faafoi: Did you read the bill?

JO HAYES: Yes, I have read the bill. I have looked at the bill, and I was thinking, now, what good things would come out of this bill for whānau—for whānau? What are the good things that are going to come out—what are the good things that are going to come out for children? I can see that there is going to be absolutely nothing.

Just recently, when the Government took away the Better Public Services targets—and I think, why would you do that, when you had no targets for this particular bill anyway? When we start to look at National’s Better Public Services targets, it is a big and multifaceted way of actually addressing poverty within communities. It is like reducing long-term welfare dependency. As David Seymour said in his speech, it is about getting people into jobs. Why isn’t this Government actually targeting to get people into jobs? Why isn’t that one of the targets—reducing welfare dependency? We all know that welfare dependency actually gets families for generations and generations on welfare benefits, and we’ve got to get them off welfare benefits. So what is wrong with that particular target?

Supporting vulnerable children—OK, so we change a name, but where will this bill actually support vulnerable children through Oranga Tamariki? It’s not going to, because they’re too busy measuring stuff. There is no one piece of policy or clause in this bill that actually does something for our children on the ground, in whānau, in communities. What on earth is going on with that Government? I can tell you right now—not a hell of a lot of thinking has gone into actually developing this bill.

The other side is boosting skills and employment. Well, you boost skills, people get employed, we reduce people off the benefits, and what do we get? We get very strong whānau. The Government needs to go and take on board the work that Sir Mason Durie has done around Whānau Ora and the targets that they set within Whānau Ora around the framework. [Interruption] You can yell and you can shout and you can carry on—the Government can do all that—but at the end of the day, this bill’s going to go nowhere. It’s not going to help anybody, any family, and it will not reduce child poverty. [Interruption]

ASSISTANT SPEAKER (Poto Williams): Order! Members, I’m having trouble hearing the member deliver her speech, thank you.

JO HAYES: Thank you, Madam Assistant Speaker.

The fourth side of the targets that National had—these are all targets that can be picked up and put into this bill—was reducing crime and reoffending. We know that when people get jobs, when people are well-educated or get an opportunity to be well-educated, offending and crime actually drop in a community, and these are key to actually growing whānau and the abilities of whānau. Why—why—is this Government not actually looking at that? Why, again, are they implementing measures that actually can’t be measured? Why? Why—why?

The last thing was around improving interaction with Government. Well, actually, there is nothing in that bill where it says it’s improving interaction with Government. What it’s doing is Government’s talking to Government agencies, and then Government agencies are going to be doing all of this work about people, rather than with people—with families.

This is a very bad bill, but it can be improved. I’m not saying—I’m not saying to the Government—that your time this time can actually come forward and the bill can be made really, really good. What I’m saying is look at the Better Public Services targets that National had put together in the last Government. Look at all of the things around the Families Package that National had put in place in the run-up to the election. Take some of those things. Don’t be pigheaded or blindfolded or blinkered because all Government wants to do is just shut everything out. Cherry-pick the good stuff, and we had many good things for improving and reducing—improving children’s well-being and reducing child poverty.

In one of the contributions I heard today, just before I stood up, from the Government, I heard one of them talking a little bit about children not going to school with shoes and all of those things that they need. Now, in Christchurch East I met up with some people that live in one of our low socio-economic areas. She works with a number of children, and one of the things that she said is some of those things like giving children shoes, clothing, etc.—even some food—sometimes didn’t actually help those children. Sometimes the parents wouldn’t actually use all of the material they were given for their children. At times they would find them hidden in a wardrobe in the house. The money through benefits that this particular family got went on alcohol every fortnight. So really, at the end of the day, when you start to look at reducing child poverty, you need to look at a broad spectrum of all of the great programmes that are out there on the ground that are actually working to improve the well-being of all whānau.

Now, Mason Durie once said if you improve the Māori nation you improve the whole nation. That’s what he said, and what he meant by that is that because Māori have got the highest statistics in this particular area that this bill is targeting, one of the things that the Government needs to look at is how on earth they are going to be accountable to Māori whānau if they start tinkering around with things like Whānau Ora. Even Te Ture Whenua Māori Bill has been taken off the list. It has been taken off because the Government is saying they’re going to have another look at it. Well, get it back into the House and start to move it forward, because that particular bill will actually help to advance the economy and well-being of iwi.

Talking about iwi, iwi are not in this bill. Consultation with iwi is not in this bill. I’ve looked in it and tried to find where iwi consultation is. There is no iwi consultation in this bill. There is no youth consultation in this bill. It is about Government talking to ministries—that’s what it’s about—and ministries reporting back to Government. Why would you do that? Why not bring in everybody that’s working on the ground with our whānau?

Hon Shane Jones: He waiata.

JO HAYES: We can talk about trees—well, actually, we can’t talk about trees, because you’re not going to hit your targets. The Government will not hit their targets, even if they ask the forestry industry to keep growing and expanding. I want to see this bill go to first reading, and let’s have a look at it. Thank you.

WILLOW-JEAN PRIME (Labour): He kaupapa taimaha tēnei hei kōrerotanga māku, nā te mea e kōrero ana e pā ana ki ō tātou tamariki, he taonga tuku iho rātou. He kōrero tōrangapū kei roto i tēnei Whare e pā ana ki ō tātou tamariki. Kua hōhā au ki ētahi o ngā kōrero, engari kua tū au ki te tautoko i tēnei pire i tēnei rā. He uri ahau nō Te Tai Tokerau.

[This is a difficult issue for me to talk about, because it is about our children, who are after all precious beyond words. People are playing politics in this House and it is our children who are at the centre of it. While I get fed up with some of the talk, I stand here today to support this bill. I am a child of the North.]

I am a child of Te Tai Tokerau, born and raised in Northland. It is my tūrangawaewae—home for my whānau. Northland is where 49 percent of our children were identified as being born in the bottom two most deprived deciles—the highest child poverty rate in the country. Northland is where families are, and have been for a long time, struggling, living in real poverty, in severe poverty. So when I hear challenges from the other side of the House to go and spend some time in Northland, I’d like to remind that side of the House that I live in Northland. I see poverty every day. I am from Moerewa. I recently visited Kaikohe—last Thursday, in fact—where we were running a stall on the street to fund-raise for the distribution of menstrual cups, because my community has period poverty. We are experiencing real poverty. I’m glad the other side of the Whare has finally acknowledged that poverty is a real thing, and that they are all of a sudden so committed to addressing poverty. I welcome them to work with us to eradicate child poverty in our country.

I struggle as I stand here today and I think about my communities in Northland who are currently flooded-in in their homes with the severe weather, and I’m reminded of a story by my local GP, where he has seen on numerous occasions the same baby being brought into his clinic because that baby has been bitten by rats. When the floodwaters rise on both sides of the township of Moerewa, the rats come up on to the land. They crawl up through our substandard housing and they bite the babies during the night. This family cannot afford rat bait. It is over $100 for a bucket of rat bait from our local stores. These families cannot help themselves. They simply do not have the money.

I talked about period poverty. It is something that came up in the election. I was visiting a local school. I was made aware that girls are missing school because their families cannot afford the sanitary products to manage their periods every month. I was shocked. I could not believe this level of poverty. We immediately started doing something about it by partnering with My Cup NZ, a social enterprise to distribute cups into our local community. Our girls are missing school. The number one reason why they are truant is because their families cannot afford sanitary products. They are now failing at school.

These absences from school are resulting in failure. I saw the statistic that there are over 300 young people in Kaikohe, which was mentioned earlier, who are “neets”. This is hard work for our Government to now deal with—to alleviate poverty, to alleviate the deprivation in Northland. I look forward to the work that all of the Ministers are doing, and that is going to go into developing a strategy to promote the overall well-being of children, which will include a particular focus on the reduction of child poverty.

That’s what is in this bill. That is the work that we are going to do. And I hope that it does also address that we are the rheumatic fever capital of New Zealand. These are Third World diseases in our country. I challenge the voters in Northland. What will it take—pussy eyes and distended stomachs?—before we stop playing politics with our children and we do something about this?

We are resilient, but do not use that to justify doing nothing. Māori and Pasifika are overrepresented in the poverty statistics. Just under half of the children in poverty are Māori or Pasifika, and rates of poverty and persistent and sustained poverty for Māori and Pasifika children are around double the rates for Pākehā.

I support the purpose of this bill. I encourage everybody in the House—the descendant of Tāreha who is no longer here—to support this bill. The purpose of the Child Poverty Reduction Bill is to encourage a focus by successive Governments and society as a whole on child poverty reduction, to facilitate political accountability against published targets, to require transparent reporting on levels of child poverty, and to create a greater commitment to the action on the part of the Government to addressing the well-being of all children and the particular needs of children in poverty and those at greater risk.

We are going to do that through this bill by requiring Governments to set 10-year targets on a defined set of measures of child poverty and periodically setting and publishing three-year targets and, importantly, developing and reporting on a strategy to promote the overall well-being of our children, which will include a particular focus on reducing child poverty. And, importantly, we’re going to include this in the Finance Act so that on Budget day we have a report on how the Budget will reduce child poverty and how the Government is progressing towards its target. To increase accountability and independence from the politics, the bill is also going to require the Government Statistician to report, independently from the Government, trends in the range of measures specified in the bill. We are challenging the public to hold us accountable to this very ambitious piece of legislation and our very ambitious goal of reducing child poverty in this country.

In my maiden speech, I referred to the words of Dame Whina Cooper, where she said, “Take care of our children, take care of what they hear, take care of what they see, take care of what they feel. For how the children grow, so will be the shape of Aotearoa.”—for how the children grow, so will be the shape of Aotearoa.

I campaigned on the belief that not one more child should live in poverty, not one more family without a home, and not one more young New Zealander without a dream. There shouldn’t be politics in child poverty reduction. I thank the Prime Minister for her leadership on this issue. I thank this Government for being ambitious in setting ourselves targets, setting ourselves a framework in which we will be held accountable by the public of New Zealand. And with that, I commend the bill to the House.

Bill read a first time.

Bill referred to the Social Services and Community Committee.

Urgency

Urgency

Hon CHRIS HIPKINS (Leader of the House): I move, That urgency be accorded the passing through all stages of the Dairy Industry Restructuring Amendment Bill (No 2). The Dairy Industry Restructuring Amendment Bill (No 2) is a very short, eight-clause bill that does one thing. It prevents the expiry of key provisions in the Dairy Industry Restructuring Act 2001, which supports the efficiency and contestability in one of New Zealand’s most significant industries, the dairy industry.

Without this bill, these provisions, as they affect the South Island, will expire on 31 May this year. The bill needs to be passed as soon as possible to give South Island farmers, dairy businesses, and the wider dairy industry certainty about the regulatory environment that will apply to them in the coming dairy season, which begins on 1 June. In particular, it needs to be passed under urgency to provide certainty for dairy farmers prior to the closure of the Fonterra shareholder application period on 28 February 2018.

I note the provisions of this bill were originally contained within the larger Dairy Industry Restructuring Amendment Bill introduced to the House by the previous Minister in March 2017 but not progressed any further. The bill removes any additional provisions that were contained in the original bill and simply strips the bill down to only continuing the status quo while further consideration is given to other matters.

SPEAKER: Can I just remind members that the moving of an urgency motion is, effectively, a point of order, and not subject to interjection.

A party vote was called for on the question, That urgency be accorded.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Motion agreed to.

Bills

Dairy Industry Restructuring Amendment Bill (No 2)

First Reading

Hon DAMIEN O’CONNOR (Minister of Agriculture): I move, That the Dairy Industry Restructuring Amendment Bill (No 2) be now read a first time.

The bill deals with an important and urgent matter—to prevent the expiry of certain key provisions in the Dairy Industry Restructuring Act 2001, or the DIRA, as I’ll refer to it, from expiring in the South Island on 31 May 2018. The Government recognises that the dairy industry is important to the economy and to the well-being of New Zealanders. The dairy industry is New Zealand’s largest export earner and it is essential that it performs well.

It generated $14.6 billion in export revenue for the year ended June 2017. This is expected to increase to $16.8 billion for the year ending June 2018. The dairy industry is also a significant employer and contributor to regional economies. It employs over 50,000 people—37,000 on farms and over 14,000 in processing and marketing.

The DIRA was passed in 2001 to enable the formation of Fonterra. At that time, Fonterra had a dominant market share—96 percent of the traded milk in this country. Given Fonterra’s dominance, the DIRA was put in place to ensure that the New Zealand dairy industry remained contestable and that Fonterra performed efficiently for the benefit of consumers and farmers. The DIRA provides disciplines on Fonterra to perform efficiently in the absence of strong competitive pressures. The DIRA contains automatic expiry provisions that were triggered in 2015 when dairy processors other than Fonterra collected more than 20 percent of milk solids in the South Island. At that point, the DIRA required a review of the state of competition, which was conducted by the Commerce Commission.

The DIRA also required an active Government decision as to whether to allow the DIRA to expire in the South Island or to remain in place. Key provisions in the DIRA will no longer apply to the South Island by 31 May this year if the DIRA is not amended. Firstly, open exit and open entry provisions: Fonterra must accept an application to become a shareholding supplier to Fonterra, except in limited circumstances where the milk might be too expensive to collect. Fonterra must also allow any farmer choosing to supply another company for any reason to exit and take their invested capital. These open entry and exit provisions are a key element to ensure that Fonterra is both fair and efficient.

Secondly, in the Dairy Industry Restructuring Amendment Bill (No 2), this milk price monitoring regime—the Commerce Commission must each year review the calculation of Fonterra’s farm-gate milk price for the dairy season that has just concluded. The commission must also review Fonterra’s farm-gate milk price manual. Fonterra’s manual sets out its methodology for calculating its farm-gate milk price for the season. The milk price monitoring regime is intended to promote greater transparency of Fonterra’s farm-gate milk price setting processes.

Thirdly, there is the 20 percent rule by which Fonterra suppliers are permitted to sell 20 percent of their season’s milk production to another processor. This provision primarily ensures that smaller specialist producers of dairy products such as cheese and yoghurt are assured of milk supply.

In December last year, I announced my intent to undertake a comprehensive review of the DIRA as a matter of priority and committed to consulting fully with the dairy sector on further policy decisions in this year, 2018. I want to ensure that the regulatory sittings around the dairy industry support a high-performing, innovative, and sustainable sector that meets the Government’s strategic objectives for the sector. Passing this bill under urgency will allow a major review of the DIRA to be conducted this year. The review will give the public and industry players the opportunity to give us their views in a substantive and meaningful way. Those submissions will guide the Government’s considered and strategic approach to the changing needs of the dairy industry.

Hon Nathan Guy: How long will it take?

Hon DAMIEN O’CONNOR: I believe it is important to give industry certainty while this review is undertaken, particularly for South Island dairy farmers and dairy processors who need to know what regulatory environment will apply to them in the coming dairy season when they make decisions on who to supply or who to buy their milk from. I therefore do not believe that allowing these key DIRA provisions to expire now in the South Island would be in the best interests of the farmers, the dairy processors, the consumers, or the wider economy. That is why this bill needs to amend the existing DIRA legislation.

In 2016, the Commerce Commission review looked closely at the DIRA regime and found that competition was not yet sufficient to warrant the removal of the DIRA provisions. The Government considers that the DIRA provisions should be retained pending further comprehensive review. For this reason, I’m satisfied that it is appropriate to retain the existing provisions while the Government considers the DIRA and other strategic dairy industry issues during the upcoming review, which we hope—for the member’s question—will be conducted in 12 months. In short, this bill prevents the DIRA from expiring so that the Government can undertake a comprehensive review of the DIRA legislation.

I’ll now turn to the key provisions in the bill—

Hon Member: There’s only one.

Hon DAMIEN O’CONNOR: —as explained briefly by the Minister in the House. In technical terms—and I think at this point some may go to sleep—it repeals sections 147 to 150 of the DIRA, which set out the triggers and process for expiry of the key DIRA provisions, in either the North or South Island, or both. Second point: it repeals provisions relating to further review of the DIRA given that I have already committed to a comprehensive review of the legislation. Thirdly, it makes consequential changes to other sections in the DIRA. Fourthly, it revokes the Order in Council that would otherwise effect expiry in the South Island on 31 May 2018—this year.

The bill does not make any other changes to regulatory settings. In effect, it just stops the countdown to expiry in the South Island so that the dairy industry can have certainty and so that the Government can undertake a considered review with full opportunity for consultation with, and input from, all interested parties. I therefore consider that this bill should be passed as quickly as possible to enable certainty for the dairy industry and for the Government, and to conduct the DIRA review.

I’d like to take the opportunity to acknowledge the coalition partners who we’ve worked with to ensure the smooth passage of this legislation. Can I acknowledge the Opposition parties—generally speaking, dairy industry legislation has been non-partisan. There has been a unity of purpose and, ultimately, a unity in passing legislation through the House, so I’m hoping that the National Party will see the wisdom to support this legislation through under urgency so that we can ensure that Fonterra and the dairy industry is stable while enabling us to have a comprehensive review that acknowledges the significant challenges facing not just Fonterra but all the other dairy companies in the country and, in fact, the farmers who participate in the dairy industry.

This is a very important piece of legislation. We believe its passage through urgency will enable certainty to remain in the industry and open the door for a useful and worthwhile and necessary discussion around the dairy industry over the next 12 months. At this stage, in one year’s time we’ll be back in here to make any necessary changes to legislation to improve the further and future opportunities of dairy farmers and their industry. Kia ora.

Hon NATHAN GUY (National—Ōtaki): Thank you for an opportunity to address what is a very important issue in the primary sector of New Zealand, the Dairy Industry Restructuring Act. We’ve heard from the Leader of the House why this needs to be heard under urgency. Personally, I don’t agree. I find it disappointing that only one aspect of this bill hasn’t been sent to the Primary Production Committee, which it should have been. OK, I get the fact that there is an expiry date at the end of May and farmers and industry want some certainty, but even if it was a truncated select committee process, the size of the industry—and also this particular issue affects all South Island farmers and processors. Surely, the Government, who stand up in this House talking about openness and honesty and transparency, would want to hear from those farmers and industry representatives of the South Island. Instead, we are here under urgency debating an issue that is really important—the future of the primary sector and growing exports, underpinned by the New Zealand dairy industry. Instead, we’re going to be debating it over the next hour or three—or, perhaps, into tomorrow, because it is worthy of decent consideration.

What I’m also really disappointed about is there’s been a huge amount of effort put in over the last two years to get the National Party’s Government bill on the table, and, yes, we didn’t have enough time to get it through last year, but, effectively, the Minister has gutted that bill. He’s going to go back out and consult and probably get 105 submissions, which we received in Government. The Commerce Commission did a huge amount of work; a very detailed report. Ministry for Primary Industries officials—when I was the Minister, they went out and had a whole lot of meetings up and down the country. We heard from industry, we heard from farmers, and now this open and new and transparent Government want to ram this very small piece of legislation—but important—through under urgency.

Hon Shane Jones: Minor detail.

Hon NATHAN GUY: And what we—that’s what Shane Jones talks about, all the rhetoric, and we wait for his $1 billion fund. And it’s all going to be about the minor detail because—maybe at some stage the detail will turn up. It will be a bit like the trees: no trees planted and we wait and we wait and we wait.

Hon Shane Jones: Water storage.

Hon NATHAN GUY: Yeah, well, we look forward to hearing about water storage in the South Island too, Mr Jones. It’s great that you’re going to stand up to the greenies and to Labour on that one, but once again that’s your rhetoric and we want to see the detail.

Getting back to the importance of this bill and what the Minister has decided to do; that is, to kick off anything that is contentious to a review. Finally, we heard from Minister O’Connor that it’s going to be a 12-month review period. But what we don’t know is what are the terms of reference for the review. Is it going to have a look at foreign ownership, because we know that New Zealand First and Shane Jones are against foreign investment into New Zealand. The Overseas Investment Office has made changes, so what’s going to happen to those that want to invest in New Zealand? Is that going to be included in the terms of reference? Also what is going to happen to other aspects in the terms of reference about the Dairy Core Database that LIC and Dairy New Zealand are very interested in? Also, what about the domestic raw milk processors? In the previous bill, it talked about farm gate and factory gate. No doubt that will need to be included in the terms of reference.

What about environmental considerations? I bet the Greens’ tentacles want to get right into that and move this review scope way broader than what it should be. And those in the dairy industry will remember back: it was only a few months ago that Labour and the Greens used the New Zealand dairy industry as a whipping boy in the election campaign. So I will be very mindful of that fact if the terms of reference have the breadth where it gets way out into environmental issues beyond the scope of this bill that we are debating in urgency today. I guess they’ll also want to get into climate change, which will be another ongoing issue that the Greens in this new Government are keen to see more happening.

What about value and volume? If you think about value, the previous National Government backed the New Zealand dairy industry through the Primary Growth Partnership to ensure that more commodities went into the value-add processing stream. We need to just think about down at Clandeboye in the South Island, where Fonterra has made a massive investment into mozzarella cheese. It used to take months to process; now it takes hours and it’s into the market. This is where the National Government invested and partnered with industry to ensure that the dairy industry could move out of commodities into value-add. So I would expect, Mr O’Connor, that the terms of reference would have a look at value and volume.

Will it indeed have a look at export markets? You had to drag your coalition—[Interruption] Not you, Madam Assistant Speaker; the Minister. The Minister had to drag his coalition partner, New Zealand First—and I look forward to Mark Patterson’s contribution. About the Comprehensive and Progressive Trans-Pacific Partnership agreement, he had to drag them across the line to actually support it. So we’d be keen to see about export markets. Are they going to be included? This review could indeed be bigger than Ben-Hur. The reason I raise it is that we just don’t know.

Who is going to lead the review? Is it going to be the hundreds of officials that want to roll their sleeves up, in the Ministry for Primary Industries, and get stuck in? What about the Ministry of Business, Innovation and Employment? Will they be getting their tentacles in? What about Treasury? Then, of course, the people that matter are the industry and the farmers. Will they be consulted through this review? Will they, Minister?

Hon Damien O’Connor: Absolutely.

Hon NATHAN GUY: Yes. That’s good—that’s good. That’s a good commitment from the Minister today that they will be consulted. I guess they already have been, but this review—I’m worried, in indicating that it could indeed be a very wide review. Who actually is going to lead it? That’s what we want to hear. Do we know, Minister?

Hon Damien O’Connor: Watch this space.

Hon NATHAN GUY: There we go—yet another review. I think we’re up to number 12 or 13 in this new Government—might be approaching 20 shortly. Surely they’d want to get some independence into this review. They might want to go and get a figurehead so that it’s not just done by officialdom, because the fear out there in industry is they’re going to get dealt to by Labour and the Greens through this process, and that is a big fear with this review. So we, on this side of the House, the loyal Opposition, will be very focused on the fact that there’s not enough detail on the terms of reference. The other very, very interesting fact is open entry/exit. That’s going to be an issue that has to be covered in this review. So I look forward to more detail on this review.

We shouldn’t forget that when the dairy industry is going well, so is the New Zealand economy. Fifty thousand jobs, depending on what year it’s counted, depending on the payout. Whether it’s six bucks, four dollars, or potentially eight dollars depends on the significance of the export returns into New Zealand. It could be $18 billion. It could be $14 billion. It is significant: 50,000 jobs. And these aren’t just farmers and their workers; these are processing jobs as well. These are scientists. These are people that are helping innovation and growing our exports into these very important international markets. So the fear out there amongst those 50,000 employees is: where is this review going to end up? I support the concerns that I hear from them. That’s why over this period of the next few hours, potentially into tomorrow, we will explore through the Minister and try and understand more about these terms of reference.

Also, what will be very interesting to note is: will speakers in the Parliament today get up and acknowledge that over the last 15 years our dairy farmers have done a huge amount to support environmental responsibility and sustainability? Excluding dairy cattle from waterways over 24,000 kilometres—it might be 26,000 kilometres—gets you from Wellington to Chicago and back again on a plane. That’s the investment that the New Zealand dairy industry has made, and I’m sure speakers from other political parties standing on the opposite side of me this evening won’t even take a moment to acknowledge that the New Zealand dairy industry—

ASSISTANT SPEAKER (Poto Williams): I apologise to the member. Your time has expired. Thank you.

Hon MEKA WHAITIRI (Associate Minister of Agriculture): Tēnā koe, Madam Assistant Speaker. Otirā, e ngā mema o Te Whare nei. Tēnā tātou katoa. It’s a bit rich for the member Nathan Guy, who’s just taken his seat, because when they had their time in bat, they didn’t do anything with this bill. Now, we’ve got a change of Government, and we’re doing something to acknowledge the dairy farmers—particularly in the South Island—with this bill. We believe their contribution to the primary industry sector is important.

I want to commend the Minister of Agriculture, the Hon Damien O’Connor, for bringing this bill to the House under urgency simply because of the 31 May expiry date. It’s to do with assuring clarity for our South Island dairy farmers that this Government is prepared not only to ensure they’ve got clarity going forward but we’re going to undertake this very comprehensive review that the Minister spoke about.

The Dairy Industry Restructuring Amendment Bill (No 2) attempts to amend the Dairy Industry Restructuring Act (DIRA) 2001 to prevent the expiry of certain provisions relating to the South Island in May 2018. It’s rich, as I started to say, because in 2015, the Opposition asked the Commerce Commission to investigate whether the state of competition in the New Zealand dairy industry was sufficient to allow parts of the DIRA regulatory regime to expire in the South Island. I notice that the Commerce Commission’s report found that the competition was not yet sufficient to warrant deregulation. So that side had every opportunity to address this issue. They didn’t while they were in Government, and, like I said, this side has taken the very important role of bringing this bill to the House to give clarity to farmers in the South Island.

I just want to pick up on some of the comments that that previous speaker alluded to—that is, what are the terms of reference for this comprehensive review that the Hon Damien O’Connor is going to take? He actually outlined them himself. It may be an opportunity to look at the environmental issues—for example, the land use. He also talked about the economic value that dairy farmers contribute to this nation. These are all very good terms, which I’m pretty sure the Minister will take on board when he does do this comprehensive review.

It is important that we give assurances to all dairy farmers in this bill, not just in the South Island but throughout the country, so I wanted to respond to that previous speaker. The terms of reference, I’m pretty sure, will be comprehensive because it’s a comprehensive review. In terms of the work that the Opposition, when they were last in Government, did with dairy farmers up and down the country, I’m sure that the review that Minister O’Connor’s going to undertake will give those very farmers and key stakeholders in the dairy industry every opportunity to contribute to that review so that we get the system right. I’ve got no concerns that that’s exactly what Minister O’Connor will do.

The bill, as he has mentioned, is a very short bill. There are only eight clauses in it. The key topic that he has indicated is really to ensure that the expiry provisions in the Act remain, and I want to just, for the purpose of the House, reiterate what the expiry date means for major players like Fonterra and Fonterra farmers. I just note that preventing the expiry of the DIRA in the South Island will mean that the current regulatory regime continues in place. The key provisions that will be maintained will be open entry and exit, and Fonterra must accept any application. What does that mean? It means Fonterra must accept any application to become a shareholding farmer in Fonterra and it must accept supply of milk from that shareholder. Also, there is a milk-pricing monitoring regime that will be maintained as a result of the passage of this particular bill.

The concerns of the previous speaker are unfounded. This is a commitment from this side of the House to ensure that we are giving certainty to dairy farmers but also ensuring that the entire dairy industry system is robust, is fit for service, and is fit for purpose and that, as we go forward over the next term and beyond, we have got a very robust dairy industry system. I commend Minister O’Connor for the action that he’s taken, and we will be working alongside him to ensure that the terms of reference and the leadership on this review will ensure that we meet that aim. I commend this bill to the House.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Assistant Speaker. Dairy farmers be warned: your worst nightmare is happening in front of you today in this House. There is no need for this bill to go to urgency; therefore, you have to ask your question: why would the Government want to take this bill to urgency? The reason is because they are going to have a full-scale attack on the dairy industry, and by doing this they take away any option for the industry and farmers to have any say in what’s happening to their companies, their industry, their milk, and their land over the next few years.

This will be a “comprehensive” review. We have heard that from the Minister and the Labour Government spokesperson in this area. If you look at the press release, it said: “environmental issues, land use and how to achieve the best outcomes for farmers, consumers and the New Zealand economy.” “Environmental issues, land use”—they have nothing to do with the Dairy Industry Restructuring Act (DIRA). The DIRA is set up around milk supply issues, around Fonterra when it was created. It is not meant to be an investigation into land use, environmental issues. Every dairy farmer out there that is milking cows now, listen to the radio because in the next few days you will see that the dairy industry will now be subject to a review that will be set up by the Labour Government, will be backed up by the Green Party, and will have New Zealand First in there, and that review will bring environmental and land use changes to your properties and to your farms. It’s exactly what’s happened in the Waikato with the regional council up there and will be the next stage of what that Minister of Agriculture wants to do, and those environmental and land-use changes will reflect in the industry going forward.

I bet that one of the things that will come out of this will be a stocking rate cap on New Zealand dairy farmers. That will happen as a result of this review. That’s what the Greens want. They’ve always wanted that. They’ve wanted to stop dairying in New Zealand. This is their chance. They’re laughing, licking their lips, because they know they’ve got their opportunity, and in the darkness of night they’re putting this through Parliament to make sure dairy farmers don’t have any say and then are going to attack the guts out of that industry going forward. That’s what Labour are up to here today. Don’t dress it up in any way, talking about dates for May and the South Island industry; this is an attack on all New Zealand dairy farmers and it is about environmental and land use, and it is a disgrace for the Labour Government to do this.

Hon Member: Scam.

Hon DAVID BENNETT: It is a scam. I ask this question: if it is so important and there are so many issues there, why didn’t the Labour Government pass what had been introduced into this House some time ago? Not only was that South Island component in there but there were three other major components that were in the bill that was introduced originally. The first was open entry and exit. Now, the Green Party is against conversions of dairy farm land in New Zealand. The open entry and exit provisions that were in the original bill would have enabled Fonterra to say no to new conversions. Why aren’t the Green Party supporting that, because there’s going to be the potential now for new conversions to go ahead that the dairy bill would have stopped. The Green Party actually knows that it can let that go, because it’s got a wider agenda, and that’s around land use and environmental change that this bill will enable them to follow.

I want to look at the effect that another party in this Parliament said, and that’s the Rt Hon Winston Peters on 16 June. He said, “Look at the Dairy Industry Restructuring Act. Instead of triggering ‘sunset clauses’ with Fonterra’s South Island market share meeting the Act’s 80 per cent threshold, National wants to revise it lower to 75 per cent in both islands. That only benefits … foreign processors.” That was New Zealand First, and then they’re doing it again here today. So I want to see what New Zealand First have said, but there is help on its way, because they said that “New Zealand First is now working on legislation to amend the Dairy Industry Restructuring Act.” That was Winston Peters on 23 March. Well, if he’s worked on it, he’s had a year, and he’s done nothing. It should be here today, and where is the New Zealand First Party when it comes to their chance to put it in front?

I guess there’s some other issues. The second issue was about regulating large-scale processors. This is a really important submission from Fonterra, because there are some large-scale processors that get regulated milk from Fonterra, and they no longer wish to do that in some cases because these companies are now able to sustain operations on their own two feet. I ask the New Zealand First Party: how can you, in good conscience, take away that provision that will enable companies like Synlait, Open Country Dairy, Yashili, Oceania Dairy, which are foreign-owned, to now have that regulated milker application still apply to them, because that bill was taking away the ability for those companies to have regulated milk for ever and a day at a certain price, and the New Zealand First Party has taken away that opportunity.

There’s another great quote I see from New Zealand First, and this was Winston Peters in the Waikato Times on 6 March. He said, “New Zealand First will not be so craven. Our policy recognises that regulated milk is an asset to this country … While it is positive Fonterra will … get control of its burgeoning milk pool in 2018 … with discretion over taking milk from new dairy conversions, we would ensure that ‘regulated milk’ only goes to New Zealand-owned processors.” Where is New Zealand First making sure that that happens in this bill today, because they are taking out the very regulation, by not enabling the full bill that was proposed earlier, to come into fruition today, and that means that foreign-owned processors will have their chance to take milk out of the New Zealand economy.

This bill is an attack on dairy farmers. Farmers need to be worried. Can they trust a Minister that has let a disease go through this whole country now—that started in the South Island—a Minister sitting over there that has had responsibility and has let it spread through this country? Can they trust a Minister that has stripped irrigation proposals from dairy farmers and other farmers going ahead in this country? Can we have a Minister that backtracked on mānuka honey when he found that he’d gone too far and had to change his mind?

We cannot trust Labour and the Green Party and the New Zealand First Party to dictate the future of New Zealand’s biggest industry. This bill is an attack on that industry and is just a method for them to go out and review everything in the dairy sector. It is a blatant attack on farmers and their businesses. There is no way that farmers should trust the Green Party to be involved in their future, there is no way that they should trust the Labour Government to be involved in their future, and there is no way they should trust the New Zealand First Party to be involved in their future. All those parties have indicated a preference to hurt dairying and New Zealand agricultural production, and this bill is an attempt by them to cover that up. It is part of the plan to take away any ability for New Zealand’s biggest industry to have a voice in the legislation that governs them, and, secondly, it is an attempt to extend the rules of the DIRA away from what it was set up to do, which was to look at the percentages of milk that would flow to certain companies and look at how milk supply would be picked up by Fonterra and other companies, and now it is being used as the proxy for an attack on environmental and land use changes.

That is the true agenda of the Labour Government that is being seen here today. That is why they are going into urgency. The only reason the Labour Government is going into urgency is because they know that this is bad for our biggest industry. They can go through a normal process, and if they really want to support the dairy industry, why don’t they do the other parts of the bill that were originally part of the Dairy Industry Restructuring Act? They will not do that, because they are not supporting dairying.

This is an attack on dairy farmers, this is an attack on land use, and don’t think it’s going to stop at dairy farmers. Once they set these rules around land use, that applies to horticulture. It applies to other landowners throughout the country, as you’ve seen in the Waikato example. This is an attack on property rights. This is an attack on the ability of people to actually own and run their own businesses. This is a blatant attack by the urban elite on the rural communities that actually make this country go forward.

This bill should not pass in the Parliament. If it does, then that party has set up the agenda to take away the rights of New Zealanders, and that just fits in with their complete agenda, as we’ve seen in the last few months.

MARK PATTERSON (NZ First): It’s with great pleasure that I rise to speak to the Dairy Industry Restructuring Amendment Bill (No 2) on behalf of New Zealand First. I must have read a different bill, because I heard David Bennett, the member opposite, misrepresent completely—

Hon David Bennett: I raise a point of order, Madam Speaker. I take offence at that—the misrepresentation comment.

ASSISTANT SPEAKER (Poto Williams): The member has taken offence. I would ask the member to withdraw and apologise.

MARK PATTERSON: I withdraw and apologise—

ASSISTANT SPEAKER (Poto Williams): Thank you.

MARK PATTERSON: —and I apologise to the member. Right, the aim of this is, as we have heard, to prevent the expiry provisions on 31 March as the threshold of under 80 percent is breached in the South Island. But dairy farmers, who may be alarmed after that presentation, can rest assured tonight because the cavalry has arrived in the form of New Zealand First. But we do support this bill. We do so strictly on the proviso and the understanding and the goodwill of Minister Damien O’Connor that there will be a thorough and comprehensive review of this bill. We know that the terms of reference will be such that it will be of benefit to this very important industry.

We did have concerns that this is a bit of kicking the can down the road, but when we looked at the previous legislation that was put up by the National Party, it was half measures. It was full of half measures, and it is time that we took a proper and comprehensive look at this legislation. I think, when you look at the 12 months that the Minister has given us assurance that it will be carried out within, that is a blink of an eye. We are talking about multigenerational businesses. It’s really important that we get this legislation right and future-focused, and not half measures to get through before 31 March. That will be a thorough review, I’m sure, and that will give the industry certainty. It might not be exactly what they want at this time, but it is certainty, and we, of course, are a Government that is looking to provide business with confidence and certainty.

The Commerce Commission report, of course, contended that there was not enough competition. I think the review will challenge that assertion, and we will see where that takes us.

The background of this, of course, is that Fonterra was formed out of farmer recognition of the importance of the Dairy Board and the single-desk seller and the merits of sticking together, and when that National Government—the previous one before the last one—looked to strip that away and open it up in a neo-liberal way to open competition, the dairy farmers pushed back. Great leaders in that industry, the Sir Henry van der Heydens, the John Roadleys, and the Greg Gents would not take that. They led their co-ops towards a merger. The Clark Labour Government listened to their request and pulled Fonterra together, and this enabling legislation allowed a monopoly of 96 percent. Now, that is a pretty extraordinary development in itself in a free market. It was a big step for that previous Clark Government to take.

When you think about it, there would be no country in the OECD that has a company as significant to their economy as Fonterra is to ours. This is a major company. It is a behemoth—$19.2 billion worth of turnover last year. It dwarfs any company on the NZX. We do not want to rush through this legislation—

Hon Nathan Guy: But you are tonight.

MARK PATTERSON: —this review, in haste. Well, the previous Government was able to live with this quite comfortably over the last nine years, so what’s the panic just at the moment? Just going back to the significance of this company, this is over 30 percent of the world’s tradable dairy products. This is significant in the sense that it has been compared to the OPEC of milk. So it is important we get this right, and we do a thorough review and we don’t rush this through.

Hon Nathan Guy: You are rushing it through.

MARK PATTERSON: We are not rushing through a proper review, as is being misrepresented here at the moment.

The 10,600 shareholders in Fonterra are owed the courtesy of us doing this properly. These people are national heroes. They each have, on average, over $1 million worth of shares. How many urban people are prepared to hold that level of investment within their business, investing in the value chain? It is an incredibly important investment and we much cherish that, because the other end of that is foreign ownership and being at the end of a supply chain controlled by foreign multinationals, and that’s where this is heading if we don’t get this right. So it’s pertinent that we do take a little bit of time on this issue.

We have to look at the cooperative model and why it is so important. It is the only model that is set up to maximise returns to its suppliers. Private companies have a raw material that they are looking to get for the cheapest-possible price so that they can return to their shareholders. Dairy farmers, on the whole, know the benefit of the cooperative, and that’s why they have stuck with it through thick and thin. Even though their market share is down, I might say that, certainly, their kilograms of milksolids have gone up significantly. They’re now at $1.25 billion, up from $1.2 billion when it first emerged.

We’ve seen the value of the cooperative shown in other ways, too. When the commodity prices fell a couple of years ago, Fonterra stumped up with a 50c a kilogram advance payment, interest-free. They mined their own balance sheet for those family farms that support them through the good times. That is why we must get this legislation right, to protect this valuable institution and business.

It’s worth noting that Fonterra also sets the benchmark. You know, there’s a lot of talk about some of these foreign companies, and they come in and they’re adding value here and adding there, but they don’t pay any more than Fonterra—Fonterra sets the benchmark. So if we weaken Fonterra, we weaken the whole industry.

This is quite significant for me personally because my pathway to this House came through trying to set reform for the meat industry. I have seen this movie before. I have seen what foreign ownership and lack of control of supply chains can do. There is destructive competition, companies trading off against each other to the detriment of their suppliers, and you end up as price-takers at the end of supply chains.

Now, we’re looking here at some of the provisions: the open entry provision—I think we are going to have to have a look at that. Fonterra are required to take milk wherever it comes from. That is unsustainable. It has led to a situation where they have had to take a wall of milk coming at them when all those dairy conversions—they had to put up those dryers. They have been locked into a commodity track because they have had to do it, basically—they have had to accept that milk. They have made great strides and I acknowledge the Hon Nathan Guy. He mentioned a very good example at Clandeboye with the mozzarella, but I believe they’ve been held up by this open-entry provision that has seen them have no control over the amount of milk that they’ve got to provide.

The provision of raw milk to foreign-owned companies, as raised by the Hon David Bennett—totally agree with that; that has to end, and that must be part of that provision. Fonterra at this stage has got its hands tied behind its back, and that is not the place where we want it to be. I note that Federated Farmers have lobbied in that direction as well, so that will certainly be part of the view. New Zealand First will be asking plenty of questions on that particular issue, which is, of course, fundamental to our core philosophy.

So we look forward to a new Fonterra after the review is concerned. A higher performing, innovative, and value-adding Fonterra, as the Minister pointed out in his opening address. We will get there. It’s important we get this review right, that’s why we have to roll this legislation over in the short term. We support that, but only under the provision of this comprehensive review. So thank you, Madam Deputy Speaker, for your time. Cheers.

BARBARA KURIGER (National—Taranaki - King Country): There were more oxymorons in that last speech than there are between the parties that currently make up the Government at the moment. That speaker actually stood up and he, basically, said, “We’re not going to rush this.” He hasn’t actually noticed that we’re in urgency. I also noticed that the Minister was sitting there, actually, really, really finding it difficult not to shake his head through some of that commentary, particularly when that member got up and said, “Rest assured the cavalry’s here. We’re going to look after it. We’re going to make sure that these guys don’t do anything that we didn’t want them to.” So I’d be really interested when you get up to make your next speech on this bill, Mr Patterson, if you would like to elaborate on that and just exactly what it is the cavalry’s saving.

Our speaker before you, David Bennett, has alluded to a few things that he sees that are likely to be dropped into these terms of reference that we don’t know about. So I would really love you to elaborate on what it was that the cavalry was coming to save that the Minister had on the table; so we would appreciate that.

There are a few other things that you talked about. You talked about farmers being the heroes, and you talked about the commodity trap.

DEPUTY SPEAKER: I didn’t.

BARBARA KURIGER: Sorry, Madam Deputy Speaker. The member talked about our farmers being heroes, and the member talked about foreign companies coming in and making the farmers be price-takers. So I’ve actually just got a little quote here that I’d like to put across. I put a question in recently to the Minister, Damien O’Connor, and I said, “Further to question 8923, why is it that the Minister has not been able to provide Cabinet with any briefings in respect of his Rural Communities portfolio?” He came back, the Minister, saying, “The Government has prioritised policies that were included in its 100-day plan. Many of these policies, including the families package and restrictions on foreign buyers, help rural communities.”

So I’m actually having trouble understanding how we are trying to protect these heroes who are New Zealand farmers, which you said in your speech. We know that New Zealand First and the Government’s policies are totally anti - foreign investment. We know that many of these companies that are coming in and setting up in competition with Fonterra—a lot of it is driven by foreign investment, so there’s going to be a lot of explaining to do when we get further down the track with this bill.

But this bill really is a band-aid. It’s a band-aid for changing the date of the expiry for the South Island. But what I’m hearing a lot out in our communities is that this Government, apart from this whole change of Government scenario, now thinks they have to change everything. And there’s nothing worse than change for the sake of change, because every time the Government says they’re going to change something, everybody goes, “To what?”, and we go, “We don’t know; they won’t tell us.” Where are the terms of reference?

The member over there was talking before about David Bennett being right off track. Well, tell us what is on track. Tell us what is in these terms of reference, because when the last Dairy Industry Restructuring Amendment Bill (DIRA) consultation went on, the Commerce Commission made a finding, and it recommended, at that stage, that the DIRA regulations stay in place. So they did a finding, they did a review. They did it and put out the findings. That’s only, literally, two years’ ago.

Following on from that, the Ministry for Primary Industries sent people out into the field. They had various meetings, they had consultation processes going on, they had 105 submissions going in—what does this Government think is going to be any different, or who are these people going to be that are going to submit anything different to what they did before? You’ve already got access to the submissions. You’ve already got access to everything that was said before. You’ve already got the Commerce Commission’s report, so if you’re looking at something that’s not in these reports, then it is very fair for David Bennett to be asking the questioners, “What are you going to add?” Is the member going to find something else? Is the Minister going to find out—sorry, Madam Deputy Speaker. So it is the same group of farmers out there, and you talked about them being heroes but I get the same suspicion right now that this bill is going to throw up something in those terms of reference that is unexpected. Because if those terms of reference were going to be straightforward, then why is this bill being rushed under urgency? And why can’t we have an idea of what is going to be in those terms of reference before it comes along?

We don’t know who’s going to lead this review. We don’t know what industry involvement there will be, and I know that after this debate today—we’ve already been asked these questions that the shareholders and farmers in Fonterra are going to come and ask us, “What does this mean?” We have no indication about anything around the time frames—the costs. You know, everything that happened in the first 100 days of this Government, the majority of it was, “Look, let’s just go and get another review.” It’s more money. It’s more cost. It’s actually people out there asking, “Why can’t decisions be made on information that’s already been provided? Why do we have to do another review?” So I think the onus is on the Minister and on the members of the Minister’s Government to explain why there’s going to be another review when there was a review done under the previous Minister recently.

I also understand that, yes, there’s a 31 May date coming up, and I do understand that there’s a time frame running. But actually, if this Government was serious about making some change, there’s been plenty of time to make some change. There have been a number of years where the Minister has been involved in going through some of these processes as well. Were there not any ideas on that other side of the House before actually going through this process? And if there were other ideas on the other side of the House, we want to know what they are. It is just diabolical that we could have this put up.

The member talked about Federated Farmers lobbying. Now, if you were up with the play you might realise that Federated Farmers did do a lot of lobbying and there were some concerns within Federated Farmers for a period of time. But then, more recently, as we got through this process, Federated Farmers came to some arrangement with Fonterra whereby they had actually sat down, as a group of people, and figured out some spaces where they could stay on the same page. They had worked out that if they followed a specific time frame, then that could be acceptable to all parties.

So I’m just trying to work out who all the different players are that are expected to come into this review. The only reason I think there would be different players coming into this review would be if there were different terms of reference that were wider and broader than the terms of reference that were given for the last review, and went wider than the Commerce Commission and started to bring all sorts of other things into the review.

So the onus really—I’m looking for some answers from the speakers on the other side of the House. We want some reassurance. We want some reassurance on behalf of our farmers that this bill that you’re wanting to pass through the House this afternoon is not just a cover sheet for a whole lot of other stuff that lies underneath it. We want to make sure that this Government is on level pegging with farmers.

We all know that we go back to the formation of Fonterra, and we do hear that from time to time it was the Labour Government that played a part in that. I think it would be an appalling day in this Parliament if something went by in this piece of legislation that was unknown to the farmers and the good heroes of Fonterra, as Mr Patterson described them. I think it’s time to be up front. It’s time to tell us what these terms of reference are. It’s time to tell us what this review is really about. If you want to save some money, go back to the review that was just done and do some thinking and some work yourselves, and let us know what that’s going to be. Thank you, Madam Deputy Speaker

GARETH HUGHES (Green): Kia ora, Madam Deputy Speaker. Ngā mihi nui ki a koutou, kia ora. I think people in our rural communities call speeches like that “bulldust”. What we heard was petty politics—scaremongering coming from the National benches. Just revel in the irony of it. Here’s the National Party, which for nine years was prepared to ram through, under urgency, all sorts of things: unethical Acts, where it comes to criminalising protest activity at sea—the so-called Anadarko amendment passed under urgency at Easter—and criminalising people for the Skynet laws, where it came to kicking people off their computers. This is the party that in their nine years literally sacked the democratically elected Environment Canterbury commissioners because they were doing too good a job of cleaning up water quality.

Oh, the irony of the National Party, which for nine years presided over a skyrocketing growth that hit “peak cow”, that saw massive subsidies going to agricultural intensification and massive subsidies for irrigation. The irony of the National Party, which presided over such a decline of our water quality; a National Party that saw, by the end of its terms, two-thirds of our kids getting sick when they swam in our rivers. What we don’t need is more scaremongering, more petty politics, over an entirely reasonable use of it.

The irony, of course, is that had the existing legislation gone through, the public wouldn’t have had a say, the farmers wouldn’t have had a say and the people involved in the business wouldn’t have had a say. What you’re railing against is the chance to have a 12-month review, to get everyone around the table. For too long what we saw was those incredibly important issues like water quality swept under the carpet. When we saw fundamental issues facing our sector—like value-add, innovation, and how we’re selling our agricultural products overseas—we didn’t get everyone around the table and come up with real solutions. In fact, we saw mock talk shops, where an agenda was rammed through.

What we do know is there’s a limit to how many cows we can cram on to a paddock. Equally so, there’s a limit to how many people we can cram down in Fiordland. There’s no limit to the export of smart intellectual property, services, software, and value-added dairy products.

It’s important we get this right. Dairy is 40 percent of our primary industries’ market. It’s important we get it right. What National would have you do is go into the old legislation and make a simple change to the open entry and exit and the milk price monitoring regime because the Commerce Commission found that the threshold had been met in the South Island.

What the National Party wouldn’t have the industry, the farmers, environmentalists, iwi, and hapū do, is have a proper review. I’d acknowledge the Minister, Damien O’Connor, because he’s doing the right thing. He’s giving people a chance to have a say on one of the most fundamental questions facing us: what is our economy going to look like over the next decade? What’s our environment going to look like? Are we going to have swimmable rivers? I’d give him full credit, because in that review there is going to be a look at organic farming, which we know is more valuable for the farmers, higher-value export industries. It’s a good thing for our environment. We also know that there’s going to be a look at how we encourage value-add into the environment.

Critically, though, for the state of our environment, where we have hit “peak cow”, there’s going to be a review into how we have the automatic entry and the automatic pick-ups. It’s critically important that we can have these conversations nationally.

This is, I guess, the sad irony. National is simply being oppositional for oppositional sake. They could get involved. They could have a say. They could partake in it. I know the Minister wants to have all conversations represented. Instead, what we’re seeing is opposition for opposition’s sake.

We think this review is reasonable. We think the time frame of 12 months is eminently sensible. What we want to see is a sensible, long-term, pragmatic solution that everybody can get behind. What we’ve seen for too long is things swept under the carpet, the very serious problems, solutions rammed through without getting those buy-ins. Let’s get around the table together. Let’s find those solutions together. Let’s find those long-term, cross-party solutions, which mean everyone can have certainty. I guess our vision—right—is that we can have sustainable farming industry for the long term, where there is community buy-in and community support, there is a social licence to operate and where our rivers are swimmable once again. That’s the vision for New Zealand.

I look forward to making further contributions in this debate, but it’s eminently reasonable and eminently sensible. That’s why the Green Party is supporting it.

Rt Hon DAVID CARTER (National): First of all, can I comment on the speech from the Green member Gareth Hughes. There is no need for urgency for this legislation. I am one of those who remember the late Rod Donald calling urgency “constitutionally outrageous” whenever the then National Government attempted to use it. I think there’s a word beginning with “h” and ending with “y”, and I wouldn’t dare use it. I wouldn’t dare use it.

Hon David Bennett: They’re hypocrites—that’s all they are.

Rt Hon DAVID CARTER: No, I said I wouldn’t use it.

I know why we’re here in urgency, and it’s because this bill is not a good look for the Hon Damien O’Connor. Can you imagine how dreadful he feels today, after spending nine long years in Opposition, as he finally achieves his lifelong ambition to be the Minister of Agriculture and he comes forward with all these wonderful ideas about what he’s going to do for the primary sector of New Zealand, and his first brainwave is a two-page piece of legislation—approximately 60 words.

I say to the Hon Damien O’Connor that it is a disgrace to have spent nine long years in Opposition and this is the very best that the Hon Damien O’Connor can do. If he had been organised and if he had read the briefing to incoming Ministers in October when he became the Minister, he would know that on the agenda was this issue to deal with, and to deal with it before 31 May. But we’ve had nine months of a Labour - New Zealand First Government—

Hon Member: Nine months?

Rt Hon DAVID CARTER: Sorry, five months. It seems like longer, I do agree. It seems like a hell of a long time, but it’s five months during which we’ve sat in this House, day after day after day, passing legislation promoted by the former National-led Government because the Damien O’Connors of this Cabinet haven’t been prepared to get cracking and get their own legislation before this House.

So here we are, in urgency, passing a two-page bill—a two-page bill that, if it had been introduced at the right time, could have gone to a select committee. We could have let those 4,000 South Island dairy farmers have a say and could have let those six or eight processors in the South Island have a say on this legislation. But, no, the arrogance of this Government has started early, where they know best. They’ll rush it through in urgency because they don’t want the record of the Hon Damien O’Connor examined with any scrutiny at all, because this is a disgrace.

Hon Willie Jackson: No, it’s good.

Rt Hon DAVID CARTER: This—well, the Hon Willie Jackson says it’s good, just because the Hon Willie Jackson couldn’t come up with anything better himself. That’s the reason he says it’s good. I think it’s a disgrace. I think it’s a disgrace that the primary industry of New Zealand waits so long to see the foresight and the vision that the Hon Damien O’Connor has for his industry, and all it is is 50 or 60 words.

I do want to talk about Fonterra, because I’m one of those that thinks Fonterra is a great company. It’s a huge company. It’s New Zealand’s biggest company, and I say to Willie Jackson—I say to Willie Jackson—that his standard of living and the standard of living of every constituent here in New Zealand depends on how this company performs.

I noted the folklore of Mark Patterson in his contribution, when he said the Labour Government brought Fonterra together in 2001. Well, that short-changes the history of the formation of Fonterra, because I was involved. I was an Associate Minister at the time. The debate that led into the formation of Fonterra was very long-winded. It took a long time and a lot of effort, led by those wonderful people like the Hon Sir William Birch, who put his intellectual grunt into putting something together that did allow a massive amalgamation and potential competition industries to the dairy industry of New Zealand. Yes, there was a change of Government, and finally the legislation was passed in 2001, but don’t ever argue—don’t ever argue—that it was solely the work of the then Labour Government, because it was not.

Now the other thing I’d say about the formation of Fonterra is—acknowledging that it’s a great company—it has not lived up to the expectations that were raised at the time we agreed to its formation. It was going to perform substantially better than it has, and I look forward to the day when it does. But I can say to members of this House that as I’ve had the privilege of travelling overseas and of talking to farmers elsewhere in the world and talking to trade representatives elsewhere in world, this is a model that I think is almost held in jealousy by many other dairy farmers around the world. It is a good model, but competition is essential to make sure that Fonterra works well. When you sit in overseas fora—and, often, the language may not be my language—you’ll hear the word “Fonterra” offered in speeches because it is respected. It is respected as an industry leader throughout the world, but that doesn’t mean to say that we can’t do better.

But I’m concerned that we’re seeing this piece of legislation gutted by the Hon Damien O’Connor because he hasn’t had the resources. He hasn’t, possibly, had the intellectual grunt to think about the real issues that face and challenge this industry. So he has gutted out the difficult issues and left this, very simplistically, just around the issue of the South Island quota.

I understand that of the milk now collected in the South Island, probably about 24 percent is processed by other than Fonterra. That’s competition working. We shouldn’t be too worried about that. But what I’d say to the Hon Damien O’Connor is that for him to announce tonight in the House that we’re going to have a review, and then, when we ask about the terms of reference, we’re told by the Hon Meka Whaitiri that they will be comprehensive and wide ranging, it should put fear into every dairy farmer in New Zealand listening to this debate tonight. When, I ask the Hon Damien O’Connor, will you tell us those terms of reference?

When are we going to be talking about the terms of reference for this comprehensive review, which could dramatically affect the ability to operate of not only Fonterra but great companies like Synlait, established not far from where I live in Canterbury. What a remarkable success story that has been. I take my hat off to Dr John Penno for the work he’s done previously as the general manager, and he is perhaps soon to be the chair of that company. It’s a remarkable success story, the way that company was able to set up and operate in Dunsandel. It managed to get under way only because of the way National and Labour put the Dairy Industry Restructuring Act together in the first place.

Fonterra should not be scared of competition. Fonterra should relish the opportunity to have competition in the dairy industry because competition will also make them sharper. But I still object to the issue of urgency. I see no reason at all why we have to be here rushing this through over the next 24 hours and not letting farmers have a say. There are possibly two or three reasons, the main one being that the Hon Damien O’Connor didn’t read his briefing for incoming Ministers and notice the risk that was ahead of him. He sat around for five months and didn’t bring it to the Cabinet committee responsible for legislation, and now, at the last minute, we’re doing a rush to fix up a mistake.

So I say to the Hon Damien O’Connor, I know a lot of people who may not be supporters of the Labour Party and who may not be enthralled that there’s now no longer a National Government, but they actually think that this guy Damien O’Connor, the dairy farmer from the West Coast, is not a bad guy. But they’re looking for him to be inspirational—inspirational—Damien O’Connor, for our industry. We want you to come forward with some real gravitas—gravitas. Well, he should know the meaning of the word. He went through a good school, this boy.

It is time to really tackle the issues that matter, and I say to him, as he puts those terms of reference together for the comprehensive review that’s going to occur: beware, Hon Damien O’Connor, that you don’t get led by the nose like a bull at a good A and P show by the Greens and New Zealand First, because neither of those two parties have shown any empathy at all for New Zealand farming. They’ve shown no empathy at all for the New Zealand dairy industry—the industry that leads the exports of this country. I thank you, Madam Deputy Speaker.

DEPUTY SPEAKER: The next call is a split call—five minutes each, and a bell at one minute.

GREG O’CONNOR (Labour—Ōhāriu): Madam Deputy Speaker, can I assure those on the opposite benches who are doubting the bona fides of the Minister around his dairy-farming background that I have milked in his father’s cowshed. He has milked in my father’s cowshed, as we were young men growing up together, and has learnt the niceties of milking in a West Coast spring. So you can be reassured he has.

On the question of having a choice of pick up, I would have chosen a provider who stopped picking up just before the May holidays started and started picking up just after the August holidays, to avoid having to milk through those holidays. However, we didn’t have that choice. Perhaps, fortunately, as a result of this legislation, that choice may remain.

But look, can I just say, listening to the Opposition, the scaremongering that’s going on, particularly from the member Mr Bennett—that is the same scaremongering that we saw in Morrinsville prior to the election, where there was an attempt to turn country against city, to try and leverage, for some cheap political points, to have some ignoramus stand up in Morrinsville and actually backfire badly.

There is some very good work going on in farming—some very good work around the ecology and around the environment. However, the ability for us to see that work is being clouded by this absolutely ridiculous attempt to leverage against city and farm. So can I say, have a look at this. Look at the legislation for what it is. It is going to be a review that is going to enable and ensure that a few facts come into this, not the stupid emotion that was leveraged and fortunately didn’t work in the last election.

This is an absolutely necessary piece of legislation. I know of farmers in the South Island now who are extremely afraid that they are not going to get their milk picked up because they are on the extremities of the current milking, and those people are extremely worried. This will give an opportunity for an industry that is changing very quickly, as the member very well knows, to ensure they have some certainty, at least for the next 12 months. Thank you.

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

GREG O’CONNOR: Madam Assistant Speaker, thank you for the invitation to speak again on this bill. Yes, just as I finished, I was advising my colleagues across the House against their policy of dividing city and country in the manner in which they have been doing—for very cheap political gains, which, fortunately, didn’t work for them—and to cease and desist their practice of trying to score cheap political points by continuing on this urban - rural divide, which will not work.

Just, finally, I speak on the matter of the advantage of having competition in the dairy industry. I think every New Zealander who goes to Europe finds it very attractive to go around the small villages of the Alps and other parts of Europe and see each village having its own little cheese, its own dairy products. That’s the sort of industry that we can develop when we get good competition into the sector. So I commend this bill to the House.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Assistant Speaker. It’s a pleasure to be taking a call on the first reading of the Dairy Industry Restructuring Amendment Bill (No 2). But before I do, I’d just like to join some of my other colleagues this evening and pay tribute to our leader, Bill English, who has announced he’s stepping down. Bill has made a remarkable contribution to our Parliament and to our country, and I thank him very much.

Canterbury accounts for around one-fifth of our nation’s dairy herd, and I’m very proud to come from the electorate of Rangitata and represent them in this Parliament. It is one of the premier dairy regions of New Zealand, and they contribute a huge amount to our local economy, both in mid-Canterbury and in South Canterbury.

In South Canterbury, in particular, we have the Fonterra Clandeboye plant, which will be directly affected by this bill by being a Fonterra asset. They employ about 1,000 staff in my electorate, and have just increased their staffing by around 100 with a huge expansion of their mozzarella plant. It’s exactly what some other speakers have been talking about tonight in terms of that value-add. It’s taking that raw product and turning it into a highly valuable and highly marketable product internationally. It’s the third expansion in just a few short years, and it means that Fonterra mozzarella now accounts for just less than half, I think, of the mozzarella on pizzas in China. I am a reasonably regular visitor to their plant. Unfortunately, as members can tell, I’m also a relatively regular consumer of their product.

I do want to turn directly to the bill, though, and, I guess, more directly, to what’s not in the bill. The Minister has made reference several times to a review, as have other members, which is going to kick this, or any meaningful reform, down the road by around 12 months.

The other aspect that’s not in this bill—and that will probably come up because the Minister, I think, himself has referred to the need for environmental aspects to be included in that review—is what happened during the election campaign just last year, when you had David Parker, then just a humble Labour MP, come to my electorate to discuss water issues, and, particularly, water issues as they pertained to the dairy industry. So he came along to a meeting in Ashburton, which was attended by a large number of dairy farmers. I, unfortunately, didn’t go to that meeting, but I’ve heard a huge number of reports of how he behaved at that meeting. He was pressed on what value or what price the water tax that Labour were proposing would be. At the time he wasn’t willing to give a figure, but he responded by saying, “Don’t push me or I’ll double it.” Unfortunately, that is something that this review that the Minister is kicking off will probably cover, by covering the environmental aspects and, more specifically, issues around water. That’s what will be included, unfortunately, if Labour, and particularly the Greens, have their way.

I want to speak more broadly, I guess, on the environment, and particularly as it pertains to this bill and the review that will be kicked off by this bill. I don’t think members opposite give farmers nearly enough credit, and my colleague Nathan Guy touched on this before. Actually, farmers have done a huge amount over the last few years in improving the environment around them by things like riparian planting, by a huge amount of fencing of waterways, and then also, backed by the Government, through things like the National Policy Statement on Freshwater Management and Plan Change 5 in Canterbury—that’s put on strict nutrient limits, and I hope the Government continues to work with farmers on that.

I want to, before I end, just cover off a comment that was made by Mark Patterson, from New Zealand First, earlier. He mentioned that 12 months in terms of the review is the blink of an eye. Well, actually, it’s 12 months that doesn’t need to happen, because we did that review—we’ve been out and consulted with farmers and the industry on what needs to happen with this legislation. So it staggers me that the Minister feels the need to go off and start another 12-month process when, as my colleagues have said, all he needs to do is go back and read those submissions and talk to those same people, and chances are he’ll come to the same position that we did.

So I’m genuinely surprised that Mark Patterson, who I understand is a dairy farmer, is defending that position. Certainly, what I hear down my way in Rangitata is that people want to know what’s going to happen. They want certainty, and that’s what, if we were in Government, we would deliver. Thank you, Madam Assistant Speaker.

JO LUXTON (Labour): Thank you for the opportunity to take a call on the Dairy Industry Restructuring Amendment Bill (No 2). As the Hon Nathan Guy alluded to earlier, this is a very important issue, and, as the previous speaker, Andrew Falloon, mentioned, Rangitata is one of the premier dairying areas in New Zealand, and that is why this bill is so important to dairy farmers in that region, to provide certainty going forward. It is intended to amend the Dairy Industry Restructuring Act 2001 to prevent efficiency and contestability provisions from expiring in the South Island in May 2018.

The Dairy Industry Restructuring Act 2001 originated to allow for the creation of Fonterra. In its infancy at the time, Fonterra collected approximately 96 percent of New Zealand’s milk production. There was concern, and rightly so, around a cooperative having such a dominant market position. It could potentially lock in its suppliers by declining applications for new supply or by paying higher milk prices to existing suppliers. As a way to address these concerns, the Dairy Industry Restructuring Act placed regulatory requirements on Fonterra through Subparts 5 and 5A of Part 2. Subpart 5 of Part 2 of the Dairy Industry Restructuring Act ensures that the activities of Fonterra are regulated, and thus promotes the efficient operation of dairy markets in New Zealand. Subpart 5A provides for the monitoring of Fonterra’s Farmgate Milk Price, and this is a way of managing Fonterra’s dominant position within dairy markets, until more competitors were on the scene.

Because Fonterra has now reduced their market share in the South Island, the automatic expiry provisions in the Dairy Industry Restructuring Act were triggered in 2015. When this triggered, it also meant that there was a review of the state of competition in dairy markets done by the Commerce Commission. The commerce report was completed in March of 2016, and the findings of the review by the Commerce Commission were that there was simply not enough, or not sufficient, competition within the industry to let the Dairy Industry Restructuring Act expire in the South Island.

This Government also believes that the market conditions have not changed significantly enough since the Commerce Commission’s review, and, therefore, that expiry be prevented at this time. This bill moves to remove or repeal the provisions that provide for the expiry of Subparts 5 and 5A of Part 2.

As mentioned earlier, the default expiry of efficiency and contestability provisions was triggered, and that was because of the fact that 22 percent of milk solids were collected by independent processors in the South Island in the 2014-15 season. Therefore, based on the findings of the Commerce Commission, that there is insufficient competition to allow expiry provision regulations to be enacted and that the markets are currently more efficient with the regulations in place, an amendment to the Dairy Industry Restructuring Act is certainly required. This is the bill we have before us in the House today, in the name of the Hon Damien O’Connor, and I commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Assistant Speaker. Look, this is interesting. We are discussing the Dairy Industry Restructuring Amendment Bill (No 2), and, as we’ve heard already, this bill—a previous version, a much more robust and detailed version of this bill—was put forward by the previous Government. However, it wasn’t debated, due to the fine level of other projects that were being progressed through the Government at that time. So what we’ve seen now, though, is a total revision of that bill. It’s been pulled to pieces and we’ve just had a couple of little bits chucked forward as a suggestion of something we might like to tweak, with actually no real detail in behind it.

It’s very light in substance. Right—we’re repealing sections 147 to 150, removing Subparts 5 and 5A. Great—and then what? What are we replacing it with? That’s what we don’t have the detail on here. We have no idea what’s coming next. Yes, we hit the 20 percent target in the South Island in the 2014-15 season. Great—triggered the review. The Commerce Commission stepped in and did a fantastic report on that. We consulted widely across the country following that. Submissions were received—105 of them. We’ve got good feedback around the proposals that were part of the former bill that was announced by the previous Minister, the Hon Nathan Guy. And now we’re hearing we need to go back to the drawing board and have a full review on it all. What’s that going to achieve? It’s wasting time.

Eventually we were given a time frame, after it being asked for many times from this side of the House. The Minister announced that we would have a review completed this calendar year, 2018. As we’ve heard a few more speeches from the Government benches, that’s extended to 12 months from now, and then it’s extended to 31 March. So over the course of this evening’s debate, we’ve already had a 30 percent blowout in the time frame they’re proposing for this review that hasn’t yet commenced. And we still don’t know the terms of reference of this bill. When are we going to see the detail? All we’re hearing is smoke and mirrors. The dairy sector deserves better. It’s a major part of our economy; we need to understand what’s happening in that sector.

I am proud to represent the Waikato electorate, the dairy heartland of New Zealand. We are very much invested in this piece of legislation. We need to know what’s happening. It’s not just the farmers, of course; it’s the processors, as well. Fonterra, our largest company—when are they going to be given some clarity around what this looks like and what the future may hold for them? We still have no idea, no answers, no terms of reference, and all we’re seeing is ducking and diving and failure to answer.

So what’s going to be in this review? Is it comparing the farm gate to the factory gate, getting those markets established, as was previously suggested? Or are we delving into the environmental part, going totally away from dairying? We’ve already heard about that a bit from our Green Party representative, Gareth Hughes, earlier, who, interestingly, noted through most of his speech that we just need to improve water quality, and if only farmers would fix it we’d be all right. There was no mention in there about anyone else having any influence on the water quality in this country. Well, I can assure you that there is so much impact on our water quality from all contributors. We all have a part to play in this. Agriculture is part of that, and they’ve done a fantastic job over many years now improving their farming practices. We’ve seen a significant investment in improved irrigation systems, fencing off of waterways—over 20,000 kilometres’ worth. We’re seeing a massive investment here. Let’s see an equal investment in the urban centres if we really want to have that green focus on water quality.

But what’s been interesting for me is that coming from the Government benches we’ve had a range of different perspectives, and whilst we had a reasonably informed and at least partly agriculturally based initial speech, I’ve struggled to see much credibility from an agricultural perspective represented in the other speeches from the Government benches. We heard Mark Patterson talking about Fonterra’s formation, when it was producing 1 billion milk solids, and how now it’s risen to 1.3 billion, and that’s great. Well, actually, we’re now at 1.8 billion milk solids, well ahead of that. Out of touch—that’s what we’re hearing from the Government benches. They don’t know what’s happening. And we saw that during the campaign last year, as well. They’re not connecting with rural New Zealand. The Prime Minister said she wanted to be in touch with all 10,000 farmers in New Zealand; there’s over 50,000 farmers in New Zealand. These are some of the things that demonstrate to rural New Zealand that there is a real disconnect from the Government. They don’t understand our sector and haven’t given us confidence that they have our best interests at heart.

We’re seeing a disorganised approach from a Government that’s uninformed, and we’re seeing no unity within their parties. Look at water storage, for example. There’s so much potential for water storage projects in New Zealand, and we’re hearing that’s been pulled apart. One document allegedly says there’s going to be no more. Another says they’re winding back, but then we have the Minister for Regional Economic Development, with his billion-dollar fund, who says he will be funding localised storage projects, and those localised storage projects are most of the water projects that are currently under consideration. This is another example of where the Government’s not supporting the primary sectors within New Zealand.

This bill we’re debating tonight is in exactly the same vein. We don’t know what we’re up against here. We still haven’t heard what sorts of things are going to be included, and that’s the biggest risk for us. The value of the sector is so important to New Zealand we can’t afford to have this uncertainty. We’re already seeing it in the business space. Business confidence has dropped significantly since the change in Government, and now we’re hearing from one of the previous speakers, Greg O’Connor, that it’s our fault, and we’re promoting a growing divide between rural and urban New Zealand. That’s ridiculous—absolutely outrageous—

Greg O’Connor: Morrinsville.

TIM VAN DE MOLEN: —and Morrinsville is exactly the example of the divide that the Labour Party has created through that campaign. They’ve manufactured spin. They’ve created all sorts of ridiculous proposals about taxes that are going to come in—they will do this to agriculture, they will do that to agriculture. Where’s the actual effort to incorporate rural New Zealand into a progressive framework, from that Government? We don’t see it at all. It’s extremely disappointing.

Morrinsville is a town in my electorate. I’m proud to have that town, and they are constantly concerned around how their interests are being represented. They just don’t know what it looks like, and what we’re hearing now is that a major review is going to come. After this flimsy piece of legislation is enacted, we’re going to have a thorough review. That could take 12 months. Maybe it’ll be done by this year, maybe it’ll be some time in March, or maybe it’ll be even longer—we just don’t know. And what’s going to be in that? We’ve heard nothing around the sorts of things that will be covered. We heard earlier that the Hon Shane Jones actually wants this review to take even longer. So what’s it going to be? When are we going to have some clarity? Why do we have to wait? Why can’t our primary sector get on with confidence and do what they do well?

Simeon Brown: Because they don’t trust them.

TIM VAN DE MOLEN: I suspect that may well be right. There’s a lack of trust from the Government for what our primary sector does, and I would really encourage them to engage more widely with the sector. I would be more than happy to host them, in Morrinsville perhaps, or at Matamata—any of our strong rural Waikato areas, where farming is so well represented. There you will be able to see—you’ll get an insight into what happens on a farm and how it works, what it means to be a part of the primary sector. It’s different, and I would really encourage you to take up that opportunity.

We need to be internationally competitive, and whilst I acknowledge there are some aspects within this bill that will look to amend the Dairy Industry Restructuring Act, part of that requires us to remain internationally competitive, and, of course, we’re focused on doing that. We’re a major trade nation. Export is a massive part of what we do as New Zealanders. We’ve got to have clarity about this, and, at this stage, we have none. I would encourage the Minister to share his terms of reference proposed under his review with us, to outline what it’s going to take, who he’s going to be consulting with, who’s going to be doing the work—because, actually, we heard earlier it was going to be Ministry for Primary Industries doing this. But hang on. We’ve also been told there is not going to be a Ministry for Primary Industries shortly. It’s going to be smashed apart into all these different ministries. So who is going to be doing the work? They’re going to be so internally focused that it won’t happen.

I’d encourage them to share with us what’s happening, and how the rural sector can get on with confidence so that we can have clarity. Thank you.

KIRITAPU ALLAN (Labour): Well, I’ve had the absolute delight of sitting here for the last, I don’t know, hour and a half, two hours, listening to my colleagues on the Opposition benches espousing and waxing lyrical about how they have been the champions for the dairy industry and they’re out there for rural communities. Well, you know, the funny thing is—and I commend the member Mr van de Molen, and the Hon, the former Hon—the Hon?—David Bennett, who are both from the Waikato.

Now, when I have a look at this, the Dairy Industry Restructuring Amendment Bill (No 2)—blah, blah, blah, blah, blah—it is about making amendments for the dairy industry to provide certainty for the South Island. Now, I know that the poor little $750 million industry down there in the South Island merely pales in comparison to the $2.2 billion contribution that the Waikato dairy industry contributes to GDP, but I can see how these little guys down the South Island got missed off the little agenda. So we can sit here and wax lyrical.

Then we get to hear the Hon David Bennett talk about how there’s all these urban liberals on this side of the House who wouldn’t have a clue about what’s going on out there in the dairy sector. Well, I had the absolute pleasure of attending the Te Puke A & P show in the weekend, and it was fantastic to see members from that side of the House in their brand new, sparkling Red Bands with their brand new, sparkling blue jackets and their brand new—it looked fantastic. But the reality is that those gumboots were about as close as most of those members have been to touching a spade, turning over a piece of sod, because all they’ve done for the last nine years is show up, cut pretty ribbons, and really have become absolutely disconnected from our dairy industries, which is why these plethora of farmers—actually, some of your 50,000 that you’re talking about—are coming back to this side of the House because we actually go in to bat for the little guys, the farmers who’re actually struggling all over the country.

So look, you guys talked about, as well, Fonterra—the most successful co-operative in the world. And then we heard from the Hon Mr Carter that it wasn’t the Labour Party that set it up, it was National. I don’t know if my history’s wrong, but that occurred under Labour. That occurred under Labour. It absolutely did—under Labour, 2001. You know it; we know it. We have been consistently, for a very long time, swinging a pretty big bat to make sure that the largest export industry from our country is well and truly protected.

Now, all this bill does is it fixes up a mess that the former Government couldn’t deal with. Now, you guys had, for how long—how long did you have the former Dairy Industry Restructuring Amendment (DIRA) Bill sitting on the Order Paper and not get it into the select committee? How long? Months and months and months and months. You didn’t care that the expiration for these guys—it was triggered in 2015. The time frame expires in May of this year. You knew that that was an impending time frame for these guys, but you also knew that the bill that you were proposing was so challenging for the industry that you were too scared to put it up.

ASSISTANT SPEAKER (Poto Williams): Order! Don’t bring me into the debate.

KIRITAPU ALLAN: Sorry, Madam Assistant Speaker—my colleagues from the other side of the House.

The independent dairy consultants that reviewed your bill at that time of the year—they said that they were absolutely terrified by the proposition of that former DIRA bill. So, to the Hon Damien O’Connor, who has had to cut through and tidy up the mess that was left by the former Government, I absolutely commend this bill to the House.

Bill read a first time.

Second Reading

Hon DAMIEN O’CONNOR (Minister of Agriculture): I move, That the Dairy Industry Restructuring Amendment Bill (No 2) be now read a second time.

The Dairy Industry Restructuring Act’s automatic expiry provisions were triggered in 2015, as we’ve heard in this House—and dairy processes other than Fonterra, where they have collected more than 20 percent of the milk solids in the South Island. I think this House has heard some interesting questions, put down on the table by both the Opposition and by the Government themselves. These are questions that are, for the most part, legitimate. There are a few extreme ones that probably don’t bear any consideration. But they are questions that will be thoroughly canvassed through the review process that will be conducted over the next 12 months.

I have to say that it would’ve been good to bring the terms of reference for the review to this House. The reality is that all those in the Ministry for Primary Industries committed to the dairy industry and knowledge of it are basically focused on the control of Mycoplasma bovis, and that’s where they should be focused.

We will arrive at a position very soon. We will have the terms of reference out. It will be more far-reaching than that of just a simple Commerce Commission review, and it will ensure that the industry that we are legislating for and making amendments for is the one that is fit for purpose moving into the future. And that is the objective of this Government. This is our biggest and best company—bar none—and we need to ensure that it can operate efficiently, effectively, and in a fair way for its shareholding suppliers.

I applaud the members in the House who have raised legitimate issues and, as I say, they will be addressed. The necessity to pass this bill through under urgency is to give effect to the protection for Fonterra that would otherwise go at the end of May. And so we were unable to do that—that is, to protect Fonterra and have a comprehensive hearing through the select committee process, because we would’ve simply run out of time. And I know there will be—whether it’s a small piece of legislation or a comprehensive review—many people in this country and in the industry who will want to come and have their point of view heard. So that is what we are, effectively, laying the groundwork for.

The Labour Government put in place the legislation to set up Fonterra. We are passionate about its success. There have been minor adjustments. There is another roll-over provision in this bill that then allows us to look at the more significant issues surrounding not just Fonterra but the dairy industry. I, therefore, commend this bill to make progress as quickly as possible through this House. Kia ora.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Assistant Speaker. Dairy farmers, do not listen to a word from that member, Damien O’Connor. That is simply not the intention of what we are seeing here in this House tonight. This is an attack on dairying, it is an attack on the values of private enterprise, and it is an attempt by the Labour and Green parties, and New Zealand First, to strip that industry of its economic potential.

We’ve heard today from that Minister—and his very words were—that the Labour members will determine the industry fit for purpose for the future. That was his line from his last speech. That was your exact line. Why would an industry—New Zealand’s biggest industry—trust a group of failed Labour academics to determine how a New Zealand industry should actually work itself out? It is up to the New Zealand dairy industry, it is up to Fonterra, to work out its future. It is not up to those failed academics over there to actually tell New Zealand’s biggest industry how it should operate.

We know they’re going to set up a committee, and it will be a committee set up of their own stooges, and it will be a committee that’s given the intention and told what to do, and we have been told what they are going to do. We have been given a broad outline of those terms of reference. And we go back to that quotation from the Minister—the very Minister sitting here today—that said it’s about environmental issues, land use, and the industry in general. And he nods now, because the Dairy Industry Restructuring Act (DIRA) was never set up for any of those things. DIRA was set up after the formation of Fonterra to deal with some milk supply issues. It was never set up to determine the future look of what Fonterra or any other company will provide, it was never set up to determine the environmental outcomes of the New Zealand dairy industry, and it was never set up to actually look at land-use change.

This Government is being disingenuous in the way they’re using the DIRA legislation to set up a whole review of New Zealand primary industry. That is what they are actually doing, and the Greens are loving every moment of this, because this gives them the opportunity to put all those crazy ideas that they want to apply to the New Zealand dairy industry in place, and the Labour Party are letting it happen, because the Labour Party are greener than the Greens. The leader of the Labour Party should be in the Green Party. This is what you are seeing here now with Labour and the Greens, and New Zealand First have got as much backbone as you would expect from a party that swivels around in the political landscape looking for the net to be held by—they will not put up a decent fight against this.

This is Labour accommodating the Greens’ wishes. This will be part of the agenda that those political parties set out. They’re looking for a way that they can attack New Zealand dairy farmers, and what better way than to go through the DIRA legislation and create a review. Look, there’s no reason that the member and the Minister opposite didn’t follow through with the legislation that National had put through.

If we look at some of the things that were in that legislation: first of all, exit and entry—exit and entry. You’ve taken that section out, that exit and entry. The Green Party, if anything, should be supporting that, because it says no to new conversions that Fonterra can say no to increasing supply from. That would be what you’d expect the Green Party to support. The Green Party have said that they will let that section be taken out. They know that they’ve got a bigger angle coming. They know that the entry and exit’s only a small thing to give up now, because they’re going to bring in land-use change legislation as a result of the new DIRA reforms.

The second thing that was in that legislation that’s been taken out—and this is where New Zealand First has failed, again, to commit to the New Zealand public—is that where there is regulated milk, Fonterra has to sell to new processors. The legislation that we introduced would have taken that away and would have meant that they wouldn’t have to do it. The New Zealand First Party had quote after quote saying, from their leader, that they don’t believe New Zealand milk should go to foreign-owned companies—foreign-owned companies that dominate the supply of New Zealand milk—apart from Fonterra. Open Country Dairy, Oceania Dairy, Yashili New Zealand Dairy, you name it—foreign ownership in them. The New Zealand First Party is not standing firm with the words that they said to farmers before the election. They are not standing up for the words that they put out to the New Zealand public.

So this legislation is not going to be dressed up as some kind of South Island process that is part of the dairy industry that needs to be sorted out before May. This is a blatant attack on New Zealand dairy farmers, and New Zealand dairy farmers need to wake up and stop it. The reason they’re doing it in urgency is to not give New Zealand dairy farmers that opportunity. That is the whole purpose they are doing it for, because they know they don’t want to give people the chance to protest, like in Morrinsville, where people actually had their say in a democratic country, unlike the democracy over the other side that they want to impose on New Zealanders.

But there’s more. This will affect not only New Zealand dairy farmers, because when they are talking about land-use change, that will affect all New Zealand agriculture and horticulture. This will not stop at dairy farmers. Once the Labour-Green review comes into place—and they are talking about land-use change—and they come and put down rules, such as the Waikato Regional Council has put down around land-use change, it cannot apply just to dairy farmers. It has to apply to all agriculture and horticulture to be effective, and this will, effectively, constrain the future of New Zealand’s growth industries, because a lot of those horticulture and agricultural industries that could take off actually have a higher nitrogen use than dairy. You see that in the Waikato with that land-use change where there’s not allowed to be that change into dairying and there’s not allowed to be that change into cropping. This will come to all New Zealand landowners. This is an attack on the property rights of those people that run the businesses that keep this country going, and this is what this whole bill is about.

The other thing that will happen in this case is that the Greens will use this opportunity to put in some of the content that they’ve always wanted to do to New Zealand dairy farming, and that is to limit the number of stock in New Zealand. They have been wanting for years to stop the dairy industry, and this gives them the opportunity to put the parts into the legislation, such as a limit on the number of cows per hectare. That will definitely constrain the New Zealand dairy industry, because what’s going to happen under this review is that a group of Labour and Green MPs will determine the future of the New Zealand dairy industry.

That is not what happened in Fonterra. In Fonterra, the two main companies came together and asked the Government of the day to support that process through legislation to make it a reality. This is not the same case. The New Zealand dairy farmers have not come and asked Labour and the Green Party to do a review and tell us what we need to do on farm to make our businesses better. No, this is a mandate that the Greens and the Labour Party have been wanting to do for a long time, and New Zealand dairy farmers need to wake up and smell the roses, because this will directly affect their ability to do business going forward. It’s not a commercial decision that their cooperatives have made; it will be a political decision made by a group of people that have no interest, no understanding, and no comprehension of what the agricultural sector makes.

The worst part of it, apart from the Labour and the Green Party doing something that is their ideology, is a New Zealand First Party that tries to go around saying they represent regional New Zealand when they are actually supportive of the biggest attack on regional New Zealand that we will see in the next three years. This is a deliberate ploy from the Government parties to attack rural New Zealand. They couldn’t do it any other way. They made a deliberate attempt at this stage to use DIRA for that attack, and we need to be upfront and aware of that. We don’t have to wait for the terms of reference; they’ve told us what they will be: environmental, land use, and whatever else they think.

These are not terms of reference that we need to wait and see about. We know that they are beyond what DIRA intended in the first instance, and this is purely an attempt by those parties to dictate to the rural sector their values of how farming should operate, their impression of how farming should operate, and their expectation of what farmers will do. And that will be a disaster for New Zealand, because those people have never run a business, they never will run a business, and it is up to the commercial people in those areas to make those decisions and not that pack of left academics that are tired and finished.

Hon STUART NASH (Minister of Police): Thank you very much, Madam Assistant Speaker. Such negativity. I’ve sat here for about, well, since dinnertime, and all I’ve heard is a whole lot of really negative stuff. Phil Twyford, were we like that nine years ago when we were in Opposition?

Hon Phil Twyford: No, we were constructive.

Hon STUART NASH: Goodness me! If you want to be part of the conversation, if you want to be part of the solution, then be constructive. You don’t get it, do you? You haven’t figured it out—that the reason why Jacinda Ardern is so popular is because she’s positive. She’s offering solutions, and all you can do is attack. I haven’t been called a failed, left-wing academic for a long, long time ago. There you go, eh. There we go.

This bill is about doing the right thing—there’s no doubt about that—in terms of preventing the expiry of certain provisions in the Dairy Industry Restructuring Act 2001. And there’s the first great irony: 2001—the Dairy Industry Restructuring Act 2001. As Miss Allan stated, it was the Labour Government that actually gave rise to Fonterra, that had the foresight—that had the foresight—to create Fonterra. It wasn’t the National Party; it was the Labour Party.

It wasn’t a farmer Government from the rural electorates but a pragmatic, progressive Government that understood business and global markets—hence Fonterra. Farmers on that side have had nine years to sort this mess out, nine years to address the issues. I don’t know what Mr Bennett has been doing for nine years, as a dairy farmer himself. You would have thought that if he believed that there was something wrong in the industry, he would have stood up and advocated, but I don’t know what he’s been doing, and after nine years it will take, yet again, Minister Damien O’Connor and a Labour Government to sort this out and make some changes.

I’m really looking forward, actually, to a comprehensive review of Fonterra. And isn’t it about time! As the Minister for Small Business, I’ll tell you, I’ll be watching very, very closely how Fonterra’s monopoly position in certain communities will be managed. Let me just give you one short example, and that’s payment terms: 61 days from the end of the month that an invoice is sent—it’s up to 90 days. Australia’s Small Business and Family Enterprise Ombudsman, Kate Carnell, singled out the cooperative for, and I quote, “extortion-like behaviour”.

Hon David Bennett: Stick to DIRA.

Hon STUART NASH: Mr Bennett talked about economic potential. What about the thousands of small suppliers to Fonterra that are having cash flow problems because Fonterra is using a monopoly position in the market to treat them like a bank? That’s what economic potential is. That is why this Labour - New Zealand First Government is the party for rural and provincial New Zealand.

Hon David Bennett: Oh, there’s no way.

Hon STUART NASH: And Mr Bennett knows it—and he knows it. Look, let’s be honest about one thing. Fonterra is a hugely valuable company for New Zealand’s economy and for various rural, provincial, and city communities, but it is now time, 17 years later, after that original Act was passed by a Labour Government, for a review, and I welcome it. I’ll certainly be supporting this legislation, and I’m assuming Mr Bennett will as well. Thank you.

Rt Hon DAVID CARTER (National): Madam Assistant Speaker, thank you for the opportunity to make a second contribution to the Dairy Industry Restructuring Bill (No 2). First of all, can I say, on the contribution we’ve just received from Stuart Nash, that we’re not here debating Fonterra’s monopoly position, as he said. We’re actually here debating the fact that there is now so much competition in the South Island market particularly—in fact, 24 percent of the farmers now supply a company other than Fonterra—and that is the reason this legislation has to be before the House today. There is no monopoly for Fonterra. There was at the time that the legislation was first passed, when they collected 96 percent of the milk that was produced within New Zealand. Those days are gone, Mr Nash, and that’s a good thing.

While Mr Nash claims full credit for the Labour Government for passing the legislation in 2001, as I pointed out in an earlier contribution I made, the work was actually done for a long period of time by the former Government, which was then not re-elected at the end of 1999. The process of the amalgamation of two major co-ops took probably four or five years. So, yes, Labour can claim that they finally passed the legislation—

Hon Damien O’Connor: National didn’t want to do it, though.

Rt Hon DAVID CARTER: Oh, Damien O’Connor interjects that National didn’t want to do it. I sat with the likes of John Roadley and with Henry van der Heyden on numerous meetings that went on for many, many hours, chaired by the Rt Hon Bill Birch, who did a stunning job in doing the initial work to get this to conception. For Labour to deny the history of this, repeatedly, is just wrong.

Hon Damien O’Connor: That’s why you didn’t do it, because you couldn’t work it out.

Rt Hon DAVID CARTER: Oh, the Hon Damien O’Connor says we couldn’t do it because we couldn’t work it out. It was handed to them on a platter. The only thing that hasn’t been worked out by the Labour Government is the mess we find ourselves in tonight, when that Minister of Agriculture has sat on this issue since he became the Minister in October last year, five months ago—hasn’t been prepared to do anything about it until he finally finds he’s embarrassed by an expiry date, which means he’s got to bring this to the House and put the House into urgency. That urgency was supported tonight by the Green Party, and when the great late Rod Donald sat in this House as the, sort of, first member of the Green Party, he used to talk and rail against the use of urgency. It shouldn’t be happening. The farmers of the South Island have a right to have a say on this piece of legislation by going to a select committee.

Hon Damien O’Connor: And they will.

Rt Hon DAVID CARTER: Damien O’Connor just interjected and said, “They will.” Well, I need to point out to Damien O’Connor that we’re doing the first reading, the second reading, the committee stage, and then the third reading. There is no chance—no chance—Damien O’Connor, and I would have thought, for a person that’s been around this House for so long, he’d actually understand the legislative process. Now, I know he took the first contribution for the second reading debate and he lasted about two minutes and 15 seconds, with his contribution. It may be because he doesn’t understand the significance of this legislation, and if that is the case, he should stand by and let somebody else attempt to represent the primary sector of New Zealand—

Hon Members: Stuart Nash did longer.

Rt Hon DAVID CARTER: —because I—well, I’m not sure that Stuart Nash has had a charming record either, to be honest. But, listen, the point I want to make is we had a Labour Government that’s been talking about honest and transparent Government. It sounded great. I remember the Prime Minister - elect talking about how this Government will be open and transparent. So what the Minister has done is he’s rushing this legislation through as quickly as he can, evidenced by his two-minute, 15-second call earlier in the second reading, and then he talks about a review of the dairy industry. Well, if he’s going to have a review of the dairy industry, give us tonight the terms of reference, because the Hon Damien O’Connor has been absolutely silent tonight on the terms of reference. Now, the Hon Meka Whaitiri got a bit more loose with her tongue and said it would be comprehensive. So that’s all we know, and I suspect that my colleague the Hon David Bennett is absolutely right that in the terms of reference we’re going to see the chance of the Green influence on the Labour - Green - New Zealand First Government, and they’re going to move this into environmental issues.

Hon David Bennett: It’s here—it’s written.

Rt Hon DAVID CARTER: David Bennett says it’s already written down on paper. I haven’t seen that yet, but I think if that’s the case, then Damien O’Connor has the opportunity to stand in this House and tell this House what’s going on.

As I said earlier, I think Fonterra is a great company. I’m fully supportive of Fonterra. I don’t think it’s performed to the expectations they said they would when they were first put together. They gave us a significant outlook on where the company could take the New Zealand dairy industry to. They’ve got part-way there. They haven’t done it perfectly, but, as I said in my first reading contribution, they are the envy of many of the dairy producers around the world for the way they operate. They haven’t done it perfectly, but they’ve done it pretty well. And now, if the Labour - Green - New Zealand First Government proposes a review, then why can’t we know what that review will encompass? It’s a simple question—

Hon Members: New Zealand First selling out farmers.

Rt Hon DAVID CARTER: Well, I don’t rely on New Zealand First. They went round the election campaign saying they were the friends of the farmers, representing rural New Zealand, and then the first thing they did in the coalition discussions was they signed up with the Greens—yeah? So what New Zealand farmer has any trust at all in the Rt Hon Winston Peters and the New Zealand First Party? Now, Mr Patterson over there is dumbfounded. He’s silent, and I’m not the least bit surprised, because I listened to his contribution earlier, and he made that man Richard Prosser look good. I can tell Mr Patterson, having watched the way the New Zealand First Party operates, that he’ll have to lift his game, otherwise he’ll get a call from the leader in the not too distant future, and it will be a “DCM”—don’t come Monday—because that’s the way the New Zealand First leader operates, and that’s why we’ve got that waka-jumping bill before the House.

We’re here today because when Fonterra was established, we wanted to make sure that we had competition in the industry. At the time it was established, 96 percent of all milk collected in this country went to one company, and that worried me because if it became a fat, inefficient organisation, certainly the dairy farmers of New Zealand—and at that stage there were about 12,000—suffered, but it was far more important than that. This is our biggest export-earning industry in this country. So we set up an arrangement in the DIRA legislation, Dairy Industry Restructuring Act, which ensured that competition developed, to the extent that we’re here in urgency tonight because the Hon Damien O’Connor has ignored the fact that we’ve now triggered the limits put in for the South Island level of competition.

Around 24 percent of all milk collected in the South Island doesn’t go to Fonterra, and that, Mr O’Connor, is a choice the producers make. They look at the likes of Synlait, they look at Oceania Dairy, they look at Westland Cooperative Dairy, and a number of others, and they decide that they’ll send their milk somewhere else for various reasons. Now, it may be around the capital structure of Fonterra, it may be around the price for milk solids, but what this legislation did—which I had a significant involvement, as a junior Associate Minister in the late 90s, in bringing together and introducing to this House—was a complete transformation of the dairy industry where we set up an industry that was competitive.

The reason we are here tonight is because that competition threshold for the South Island has now been met. So I say to Mr O’Connor, if you’re going to have a review, because you’ve spent the last nine years dreaming about the future of the industry rather than getting anything concrete, tell us tonight the terms of reference of that proposed review.

MARK PATTERSON (NZ First): The second reading of the Dairy Industry Restructuring Amendment Bill (No 2)—New Zealand First rise to support this, as well, despite the melodramatics that we hear across the floor. This is indeed a functionary bill. We’re looking to roll over legislation that has been in play for the nine years that that previous Government was in office, and, as my colleague Kiritapu Allan pointed out, this provision in the South Island was triggered in 2015, so all of a sudden they seem to care a little bit about the Dairy Industry Restructuring Act (DIRA), belatedly.

We have a clear alternative. We have the alternative that was put up by the National Party, which was a series of half-measures, and, as Mr Bennett pointed out, some of those were perfectly good provisions. The foreign ownership one was one of them, and I’m sure that that will come under scrutiny and that will be a thing of the past. But it is time for a thorough review, and we totally agree with that—a root and branch review. I think that what we’ve heard from contributions over that side of the House is like listening to dinosaurs. You’re talking volume mentality. We’ve got to start adding value.

Hon David Bennett: This is just a value-add.

MARK PATTERSON: We’ve got this freight train of synthetic proteins coming up. If you don’t want to have those conversations, Mr Bennett, they’re coming at us anyway. We have to have those conversations, and we have to make sure that we give Fonterra the right tools to adapt to that environment.

We need to foster New Zealand competitors, and that will be something that we will have to look at. That will all be part of this review, but we cannot just carry on doing what we’ve done in the past. That commodity mentality is where we got, and I hate to be lectured by the National Party about proactivity in this space. I came here time after time lobbying the National Party to take some interest in the meat industry and they were nowhere to be seen, and that is why I stand here—nowhere to be seen. So we need to get this right. We need to get this right. This is our most important company. It needs the tools for the future. We will give them some certainty by rolling over the existing legislation for the next 12 months, but after that—after this thorough review—we will have a company that’s fit for purpose well into the 21st century.

So this is the sort of contribution we can expect from the National Party. If they are just going to sit in the past and expect to do what we’ve done, it’s not going to work. It is absolutely not going to work, and you’re going to have to lift your game over there if you want to continue to pretend that you’re representing the best interests of farmers, because from what I’ve heard tonight you have got no idea what’s coming down the pipeline at you. On this side of the House, at least we’re prepared to address those issues. We are going to address those issues and we are going to see some future-focused legislation come out of this and not a half-measure.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Assistant Speaker. One of the strengths of the dairy industry over the years has been their effort to get consolidated and find answers to problems, and it really isn’t appropriate that you stand there and go, “We’re going to do it for them.”, because there’s all these things coming down the track—sorry, Madam Assistant Speaker. The previous speaker—MP, over there—talked about solving all the problems of the dairy industry. Well, it’s really interesting that this is going ahead tonight under urgency and you haven’t had any—sorry, apologies. The members and the Government have not given the farmers any opportunity to go through a submission process with this.

This is a band-aid to get this piece of legislation through the House, so, all of a sudden, these terms of reference can come out and we know—we’ve heard about the terms of reference today, including, for example, environmental issues, land use, and how to achieve the best outcomes for farmers, consumers, and the New Zealand economy. Look, it’s a conversation that all of us have to have, but we in here are not the people that know all the answers, so I think it’s really important that a submission process should have been taken with this. There has been a review. There is a lot of information out there from that review. All of this has just been ignored. We’re going to start over again and we’re going to do another review, but at what cost? So a lot of information is already accessible.

I think the other thing that’s really interesting is the targets that are coming back to this side of the House. We heard it from, not Minister O’Connor but Greg O’Connor before, actually, about this side of the House and the Morrinsville protest, and the divide between rural and urban. Well, I tell you what: it became a very big issue during the process of the election and it wasn’t coming from this side of the House. And guess who had the biggest bus at the protest? So New Zealand First was very—so don’t sit here, Mr Patterson, and tell this side of the House that we were engaged in inciting rural-urban divide, because one of the reasons you stood up—[Interruption] No, look, we actually want to put this rural-urban divide together.

One thing I do say—I want to issue a challenge to Gareth Hughes. I want to issue a challenge to Gareth Hughes to be as proactive as his leader James Shaw, because I know that James Shaw does go out and he does go on farms and he does talk to people. When Gareth Hughes stood up before, he talked about all this bulldust, about what the farmers would be thinking about what we were saying. I haven’t seen Gareth Hughes out and about on any farms. So, Mr Patterson, you might have been but I’ve never seen Gareth Hughes out there, and I know that James Shaw does. I hope he listens, because he’s going to get a barrelling from this.

So you talked—sorry, Madam Assistant Speaker. Mr Patterson, you talked before about the commodity trap, so then this Government is wanting to delay this process for another year, leave people out there with uncertainty about where it’s going to end, and then talked again about foreign owners that come in and turn farmers into price-takers. So tell me where the nexus is between that? You’ve got a cooperative that wants to—we’ve got a cooperative that wants to collect farmers’ milk, it wants to add value to farmers’ milk, and it’s processing and adding value to a lot of milk. Up until now it’s been coming at it faster than it could process it.

Things are going to change. There are limits; I’m not stupid. We know there’s going to be limits, but the industry is working those things out and with a bit of conversation we can work it out. But the problem is we have a piece of legislation up here. It’s two pages, it’s a band-aid, and it’s designed just to hold the process until we have another one of these inquiries that this Government is getting well known for. We don’t need change for change’s sake. Why can’t we just pick up what we already have and go for it?

There were a couple of other concerns that came up before. I can’t remember who the member was, but I can go back and look at the Hansard and find out. It was that the far-reaching shareholders of Fonterra had to be protected. Now Fonterra have already said that they would not be seeing their cooperative members put to one side and that anybody that was in the cooperative would remain in the cooperative, because they had signed up to the process and they were all in it.

So I think it’s really important to realise that Fonterra’s got no intention of actually getting rid of its own shareholders just to achieve a purpose. I’m sure that if you have the conversation—and I imagine that Minister O’Connor has had heaps of conversations with Fonterra. I’m not sure that many others have, and I’m just mystified as to why this Government calls itself open and transparent, and then won’t give us the terms of reference but will write things in a press release that are going to put the wind up farmers.

So look, we’ve got a hundred submissions that came in, in a prior review. They’re the same people that will still put the submissions in. But I can tell you what, if you go around this and try to add things to it that simply aren’t related in the first place, you are going to get your—sorry, Madam Assistant Speaker, again. This Government’s going to get itself into some strife, because I know that in the conversations we’ve had, farmers say, “We signed up to this thing. We’ve met the criteria. We made criteria that fitted for the South Island and for the North Island.” They feel that they’ve done the deal, they’ve gone through the process, they’ve met all of the criteria that they signed up for, and they understand that there has to be a process to work out whether the commercial realities are in the right place. They’re going to be really disappointed when they find out that what’s being reviewed around these commercial realities is actually opening up to a whole lot of things. They’re going to say, “The ballpark has changed and the goalposts have been shifted.”, and they’re going to be very, very disappointed.

They are not shying away from their responsibilities, but they’ve got a piece of legislation that they agreed to. Minister O’Connor, you can argue all night—we’ve heard lots of debate over there about which Government actually did it, and I know there was a huge amount of work that went into it—but I do know that there are farmers out there that know that it was the Labour Government that signed the dotted line. That was the agreement with farmers that said, “When you get to this point, you reach this level, and then we will free Fonterra up.”, and I know we’ve got to make sure we’ve got all the right settings around that. But they’re going to turn round and they’re going to tell this Government that this Government has shifted the goalposts.

So it’s a very, very disappointing day today in that we have not been able to have a select committee process, where we would be able to have farmers put submissions in and we would be able to have producers put submissions in. We would have had submissions coming in from the processes from both sides of the fence, because we know that some agree and some don’t agree, but I don’t know why this Government is so scared to put the terms of reference on the table so that everyone in the dairy industry in this country knows what they’re dealing with and so that people can have some input. Communities and industries—surprise, surprise to this Government—have a huge amount of knowledge about their own patches, their own industries, and they would dearly relish the chance to come and talk to this Government about what their hopes and dreams are for the future of this industry. So—

Hon Ruth Dyson: The microphone is working.

BARBARA KURIGER: Yeah, well, we’re wound up over here, and I have actually been listening to some of the debate. People have been wound up—and it hasn’t been only on this side of the House—because I think it’s about a fairness of process. This process is flawed. No one minds having the discussion. We don’t mind having the discussion, but we do object to working with flawed process, and I know that people around our dairy industry and our rural communities are going to be feeling pretty aggrieved at not having the chance to come in and go through a submission process. So I hope that in the course of the committee stage, the Minister for this open and transparent Government will put some terms of reference on the table so we can understand what it’s all about, and then we can start having the real discussion about where this piece of legislation needs to go.

So, thank you, Madam Assistant Speaker. I apologise for bringing you into the debate more than once, but I thank you for the opportunity. I appreciate that. Thank you.

Hon JAMES SHAW (Leader—Green): Thank you, Madam Assistant Speaker. It is a pleasure to have the opportunity to speak on this bill. While, as the Rt Hon David Carter said earlier, the Green Party generally objects to the use of urgency, one of the upsides of urgency is that you actually have a proper debate. You get to respond to each other. You get to pick up points that each other make and respond to them. So, given that this is the second reading, I will do so, because that is one of the great pleasures of this part of the process.

First of all, there have been some strong contributions. I would like to start with the Rt Hon David Carter, because that was a thoughtful contribution and deeply knowledgable about the sector from someone who has had a long history both in this sector and also, obviously, in Parliament and as a Minister in this sector, and I think he was displaying that. It was a pleasure, actually, to see him freed from the constraints of being Speaker, so that he could really let rip and make some good points, some of which were about the terms of reference, some of which were about the process, and so on. So I take those points on board. He did make one error. I’m kind of hesitant to correct the former Speaker on this, but, of course, dairy is not actually the leading export earner in New Zealand—tourism is at the moment—so we’ve got to have a bit of context around this.

Barbara Kuriger, of course, is also similarly deeply rooted in the sector. Like the Rt Hon David Carter, she is someone who knows the industry and is from the industry and who makes some very good points about the industry, about the effect of the legislation, and about the process—all of which I think are relevant, and we should pay heed to those.

Mark Patterson from New Zealand First, of course, is someone who is a strong advocate for the sector—someone who truly understands that what New Zealand needs to do is to move up the value chain. He is someone who is concerned about countries like Ireland, with their Origin Green programme, who are getting ahead of us and saying, “Actually, the way to extract more value from this industry worldwide is to focus on the ‘clean, green’ brand to really capture the value that we have available at our fingertips.” That is why he’s such a strong advocate for this sector, and it is good to have him in the House to do that.

Now, this, of course, brings me to the great pleasure of this evening: David Bennett. David Bennett, “the Accountant”, referred to this legislation as “the biggest attack on [the agricultural sector] in the next three years.”—the biggest attack on this sector in the next three years—and yet, at the end of the first reading, when it came to votes against, I didn’t hear his voice. I didn’t hear anyone voting against it, and yet, for the biggest attack on this sector in the next three years, he voted for it. I find that extraordinary.

The biggest attack on the sector in the next three years, which you—I beg your pardon, Madam Assistant Speaker. If Mr Bennett honestly believes—and I know that he doesn’t—that this is the biggest attack on this sector in the lifetime of this Parliament, then surely, surely, he would vote against it. If I thought that a sector that I was seeking to represent in this Parliament was under the kind of sustained, existential attack that he spent his contribution referring to—the end of the industry; the absolute collapse of dairy in New Zealand!—then, surely, I would vote against that bill because it was such an existential crisis, and yet he failed to do so, and I noticed that no one in the National Party voted against this bill on the first reading. So I have to take his words with a grain of salt.

Barbara Kuriger referred to the urban-rural divide in her speech, and I do want to take a moment to acknowledge this, because one of the things I personally am most worried about for the future of this country, present and in the near-term, is the notion and, actually, the very real possibility that we will have a true urban-rural divide. I am absolutely committed that we do not—that we do not—have such as divide. I have to say that the kind of language that David Bennett was using in his contribution earlier on in this debate fanned up that possibility. I know it may be great for recruitment; it may be fantastic when you stick it up on your social media pages and you say, “Look, here is what I’m doing heroically to defend the sector from the greatest threat in the lifetime of this Parliament.” without actually voting against. That kind of language, that creates the urban-rural divide. That’s what creates it, Mr Bennett, and you should be ashamed of yourself. I dare Mr Bennett, if this is the fatal dagger in the heart of the dairy industry, to vote against it. I bet that he won’t do that.

I have to say that this has been an entertaining debate, and there has been, you know, a great deal of, I think, completely over the top contributions. There have been some very thoughtful contributions made, as I said, from the Rt Hon David Carter and Barbara Kuriger, and I think that we should take those things on board. One of the things that, I think it was, the Rt Hon David Carter said earlier in the debate—and I might have the speaker wrong, but somebody on the National side—was that the Dairy Industry Restructuring Act (DIRA) wasn’t set up to look at things like land use and it wasn’t set up to look at things like the effect on the environment and so on.

Hon David Bennett: That was me.

Hon JAMES SHAW: That is correct. It’s correct. So I will acknowledge that amongst all of the other points that he made, the one point of substance that David Bennett had was that: that DIRA was not set up to look at things like land use or the effect of the industry on the environment and so on.

That’s correct, but it has an effect—it has an effect. It wasn’t set up to deal with those things, but the system that is set up inside the Act has an effect on land use and the environment and a whole series of other things, and that is why it is worth taking a bigger-picture view, stepping back, having a broader term of reference, and saying, “Let’s take a look at this sector.” and taking a look at those things. In fact, this happens a lot in politics: we set up a piece of regulation, and we take a narrow view of it, and we say, “That look goods for that,”, but, actually, it also has wider effects on the system, and we don’t take account of those externalities. Then we end up in a problem, and we’ve got to go back and fix it, and that is the position that this Government finds itself in. And so, while that point is correct, Mr Bennett, actually, what we need to do is to take a look at it and say, “Well, what are the effects on the broader system—not just inside the industry and its economics, but what are the broader effects and the externalities of the way that that legislation is designed?”

That is why it is worth having a review. That is why the Green Party supports this piece of legislation. That is why, also, I absolutely cannot take seriously this notion that this is a fatal dagger in the heart of the dairy industry, that it is communism by stealth. That was actually one part of Mr Bennett’s speech that I desperately miss, because in virtually every other speech that David Bennett has ever had, in which he’s referred to the Green Party, he’s referred to communism by stealth. I missed that in this part. But you’ll have another shot. He’ll have another shot in the third reading, and it’ll be good to hear those words, because I’ve missed those words from David Bennett.

I do say that everybody understands the need for sustainable food production in this country. We do look at countries like Ireland who are moving ahead of the pack with things like their Origin Green branding. I have to say that ethical food production, sustainable food production, is one of the most noble pursuits there is. That is what this country has to aim for. That is where the value is for this country. We have some of the best farmers in the world—some of the most productive, some of the most responsive, farmers in the world—and what we need to do is to maintain our leadership position. That is what the Minister is attempting to do by calling for a review. That is why this particular piece of legislation is significant, and any talk from the Opposition about what a fatal piece of legislation this is, I think, should be backed up with action. I think that they need to vote against this bill if they truly believe what they are talking about.

Hon NATHAN GUY (National—Ōtaki): Well, that was a riveting address there from James Shaw; enlightening—enlightening.

It’s interesting, I follow rural media clippings very, very closely as the Opposition spokesperson for the primary sector, and guess who I saw on a farm in the last week or so? Go on, have a guess—have a guess. His first visit ever to a dairy farm. Come on, who’ve we got? Have a guess. No, it wasn’t Metiria Turei, she’s gone. No. It was James Shaw. I scrolled down the photo to have a look at the gumboots he had on—Wairarapa’s been pretty dry, it’s almost in a drought—and there they were, shiny, brand new gumboots, never been on a farm before. But I acknowledge James Shaw for getting out on a farm. He made some—

Hon James Shaw: Biosecurity.

Hon NATHAN GUY: Yeah, yeah, that’s right—that’s right. He talked about biosecurity, clean gumboots, well done. But it would pay that he gets on a few more farms as Minister for Climate Change. Because farmers are focused on environmental sustainability but they’re also very mindful of the fact of this review that is proposed following this very truncated bill that we are debating under urgency this evening at 8.45. I can’t believe, as I said in the first reading—there’s no reason that I can fathom that this bill couldn’t have gone to the Primary Production Committee for even a truncated select committee period. I get the fact that the date in the South Island is going to expire 31 May 2018, but you would’ve thought that there was an opportunity for the Parliament to get going on this a bit quicker. It wasn’t part of the 100-day programme because Labour and the Greens don’t care about the primary sector, we’re still trying to work out whether New Zealand First does. So here we are now debating under urgency; no select committee process. And people on the other side of the House used to rail against a National Government whenever we put the House into urgency, and we’re not hearing that tonight; they’re saying, “Just put it through.”

But getting back to the point of why James Shaw went on a farm, he went on a farm so that the Green Party tentacles could reach inside this review. He’s already concluded rightly that the Dairy Industry Restructuring Act (DIRA) doesn’t have anything to do with the environment. Yes, dairy farming, we acknowledge, does have an impact on the environment, just like humans do, just like buildings in metropolitan areas, but the reason that James Shaw went on a farm was so that he—

Hon Tracey Martin: Come back to the bill.

Hon NATHAN GUY: —I am—so that he could understand this bill this evening and the importance of the dairy industry to New Zealand but also so that when the review comes through the Cabinet process he knows what he’s talking about. And so that that review, instead of being tight and considered and concise, to do with export markets, open entry and exit provisions, raw milk regulations, farm gate, factory gate—all of those things are logical in a review—but what we are going to see is that this review is going to be broadened out so that the Green Party can have their way and get their tentacles into it. So it’s going to be a broader review than just the state of the New Zealand dairy industry.

What was also telling this evening in the second reading of this bill was when the Minister stood up and said, “Oh, yeah, I should’ve brought the terms of reference down to the House but my officials have been too busy dealing with Mycoplasma bovis.” I know that that is a very significant issue not just for the dairy industry but for the beef industry, but for the Minister to come down to the House when he has got 2,500 officials working in the Ministry for Primary Industries and say, “Oh, we couldn’t get round to doing the terms of reference, getting them through a Cabinet process, and bringing them to the House so that we could all understand them because they’re just too busy on M. bovis.”, well, that is so disappointing to hear from the new Minister when he’s got all these officials queued up at his door, writing down every “um” and “ah” that he stutters when he’s talking about the New Zealand dairy industry.

What we also haven’t heard about from him—we’ve heard the rhetoric about a primary industries advisory council. What would happen if they advised the Minister that there should be changes made to this bill this evening? Wouldn’t that be kind of interesting? He’s also talking about something a bit like Sir Peter Gluckman, a science adviser but having something for agriculture. I think that could actually be quite a good idea.

But what is not acknowledged in this bill tonight, and, hopefully, will be acknowledged in the review, is how the dairy industry is moving out of commodities and into value-add—nutraceutical products. It’s not just whole-milk powder; mozzarella cheese, which I’ve already talked about. Fantastic innovation coming out of Palmerston North—Fonterra’s innovation centre is massive and doing really well. That is not acknowledged by anyone on the other side of the House.

Here we are this evening debating under urgency a bill that is affecting just the seller, and that is still significant by itself. You would think we would hear acknowledgment from the other side of the House about how important the New Zealand dairy industry is to the overall New Zealand economy. You can bet your bottom dollar that Grant Robertson is up there with his Treasury officials, hoping like hell that the Fonterra milk price stays up where it is, because if it drops, and it may well do in the future, at some stage in the next season or two, then it’s going to make it very difficult for the Government to balance its books with its spending priorities that it faces in front of itself.

Anyway, to conclude, really where I started. This bill should be going to a select committee, and there’s no reason why it can’t. I’m disappointed that the Minister has chosen to put the House into urgency for this. The second part is that it’s great that James Shaw has been on a farm for the first time. Well done! He needs to get on farms more often and understand what farmers are doing in terms of environmental sustainability, excluding dairy stock from waterways. I know the reason he did that, and that’s so he can understand the terms of reference. It’s going to take 12 months and it’ll be really costly. We still don’t know who’s going to drive it. Is it the Ministry for Primary Industries, is it the Ministry of Business, Innovation and Employment, is it Treasury, is it an external lead person? We still don’t understand about the submission process on that.

Also, I’m very disappointed in the fact that in the campaign we saw the arrogance from Labour and the Greens using the dairy industry as a bit of a whipping boy. As a result of what they did and proposed to do with the irrigation tax, farmers rallied and met in Morrinsville. That was a massive rally. It was as big as the one that I saw on the steps of Parliament, with the tractor that Shane Ardern drove up the steps.

Hon Tracey Martin: Winston Peters was there.

Hon NATHAN GUY: So I say to Barbara Stewart, who keeps chipping away and trying to interject—well, they’re not very funny, and they’re not rare, and they’re not reasonable. So I’m just ignoring her. But I say to her that it’s kind of interesting, when we read Winston Peters’ press releases, leading into the campaign, about the DIRA, and now they are supporting it.

So we will watch this space with a great amount of interest. We look forward to our questions that we are going to propose to the Minister when he’s in the chair in the committee part. We have got numerous questions, and we look forward to ongoing discussion and debate.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Dr Liz Craig—five minutes.

Dr LIZ CRAIG (Labour): Thank you, Mr Assistant Speaker. It’s a real pleasure to take a call on this bill. I think the problem is, sitting here listening to the intensity of the debate across the other side, I’m almost forgetting why we’re here. Why we’re here, under urgency, is actually for a very, very simple thing. It’s actually because what we’re trying to do is to prevent some of the provisions of the Dairy Industry Restructuring Act (DIRA) from expiring for us in the South Island. It’s actually very, very simple. What we’re trying to do is provide some certainty for our farmers that Fonterra is going to continue to take their milk in 2018.

I live in Southland, and in Southland a lot of our farmers have been doing it really tough of late. We’ve had the drought just declared, we’ve got Mycoplasma bovis, and over the last couple of years the dairy prices have been up and down, and a lot of our farmers are under a heck of a lot of stress. The problem is that this afternoon’s scaremongering by members across this House is going to do very little to alleviate that situation.

What we’re actually wanting to do here is just retain the status quo until we can get a more comprehensive review of DIRA and take that uncertainty off the table. In the medium term, though, we shouldn’t step back from that broader debate, because we do need to think about what the future is for our dairy industry. I think our Minister signalled that he’s going to do just that. He’s going to take some time to think about our broader strategic direction.

To do that, though, is going to take time. I’m hearing, on one hand, members across the House decrying the fact that we’re not going to select committee, and yet, on the other, they’re saying it’s going to take so long to have some consultation. But to get this right, we do need to have some decent consultation. We need to talk to farmers, milk processors, industry leaders, and communities. So we’ve got to have that and get it right, for the futureproofing of our dairy sector moving forward.

I don’t think we should step back from that broader debate about the environment, about land use, and about how we do achieve those best outcomes for farmers and consumers and for our country. What we’re talking about is thinking about the future of our dairy industry. The problem is that we’re now marketing into a world market where we’ve got increasingly discerning consumers, and they will care about our economic bottom line and how we’re managing our environment.

But coming back to this bill, all it does is it just buys us time so that we can have a broader review that does the due process. It means that we can have that without a whole lot of the instability that would ensue if we suddenly lost the DIRA provisions in the South Island. If we do nothing, we get a whole lot of problems. But preserving the status quo—what it means for our farmers is that Fonterra still has to take their milk. What that means is that they can continue to have that certainty in terms of their future planning. It also means that they can still continue to exit, should they want to.

The other thing that this preserves in the meantime is our current milk price monitoring regime. What that means is the Commerce Commission will still have to review how Fonterra is calculating its farm-gate milk prices. In the meantime, we can have that transparency and that confidence in how Fonterra is setting its prices.

The other thing with this bill is that it lines up with what the Commerce Commission was saying in 2016. They were saying that there still wasn’t enough competition within the sector and that we needed to maintain things until we could have that broader review. So this bill just buys us time and it creates that stability so we can have a broader debate. I therefore commend this bill to the House.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Andrew Falloon—five minute call.

ANDREW FALLOON (National—Rangitata): Thank you, Mr Assistant Speaker. It’s a pleasure to take my second call tonight on the Dairy Industry Restructuring Amendment Bill (No 2). Since I last contributed to this debate, I’ve had a couple of emails from dairy farmers in Canterbury. Both of them are quite confused as to why there is a need for a review. Isn’t that an excellent question?

This is a Government that for nine years railed against nearly everything that the National Party did in the primary sector when we were in Government. So now that they finally have the chance to correct everything that we did, all the things that we apparently got wrong, the first legislation that they bring to this House to affect the dairy industry is the Dairy Industry Restructuring Amendment Bill (No 2).

What does it do? It amends the Dairy Industry Restructuring Act to prevent the expiry of certain provisions in May 2018. So their big plan in this piece of legislation is continuing with the status quo, but with a review. And doesn’t this Government love reviews? They’ve set up reviews for all sorts of things, and where they haven’t, they’ve set up committees and quangos. This Government’s big plan for the dairy industry, for tax, for climate change, for anything of any importance, is to kick it down the road, to set up a review, a committee, or a quango.

It shows that they’ve already run out of ideas, if they ever had any to begin with. I equate it with a dog chasing a car. The car has stopped, they’re looking at each other, and they don’t quite know what to do next.

So instead of making changes, like with this Act, they’re setting up reviews and committees and quangos. And who are they getting to run those reviews and committees and quangos? Seasoned, experienced Labour politicians like Michael Cullen and Pete Hodgson? So it raises the question: who will run this review? My colleague David Bennett has already made, I think, a very worthwhile suggestion, which is Sue Moroney. Can I also throw into the mix Dianne Yates or Barbara Stewart—both former members of this House.

I want to end by noting the struggles that the industry is currently going through at the moment with Mycoplasma bovis. We’ve heard today that it’s now expanded to 23 properties across New Zealand, with new cases in Waitaki and in Southland, and there are a further 38 properties that are under Restricted Place Notices. Mycoplasma bovis has had a dramatic effect already in my area, both for the dairy industry and also for the beef sector. I’ve spoken to a number of farmers in my electorate who have been directly and indirectly affected by Mycoplasma bovis. All of them feel incredibly guilty and devastated, and, in terms of the guilt, wrongly, in my view, because there’s nothing that they could have done to prevent the situation that’s happened to them.

So I do rise to speak in favour of this bill, despite what I’ve been contributing so far. We will vote for it, but we do question the need for a review. It’s not needed. We’ve been there and done that. All the Government needs to do is go back and look at what was done previously. Thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Assistant Speaker. It’s with alarm that I sit here and listen to the members for the other side missing the point entirely. They’re talking entirely outside of the scope of the bill. I heard David Bennett say that this was an attack on private property; in fact, nothing could be further from the truth. This is a bill that will protect private property. A short lesson in economics might help the member—perhaps that wasn’t included in his little commerce degree.

What we need to think about here is that we have a massive monopsonist—a monopoly buyer—and we cannot simply unleash it on the market. The Dairy Industry Restructuring Act was set up to put in place protections so that the dairy industry would both be internationally competitive and be able to grow internal competition. We don’t want to see that go by the wayside. Fonterra is still, for all its merits, a wildly monopolistic player in the New Zealand market, and, like any business, it needs discipline. There is no such thing as a free market; there’s just a market that some people prefer over others, as I’ve said in this House before. We need rules here for discipline.

Only recently—last year—the Supreme Court found that Fonterra had abused its position and had not treated farmers fairly when they were entering into the milk supply programme. It goes to show that without scrutiny, without examination, Fonterra will break the rules. It goes without saying, as night follows day, that if someone is dominant in the market place they will use that dominance. A provider who takes the vast majority—80 percent of the milk—will necessarily use that position to enhance its profits and, more importantly, to squeeze out other competition—competition that is critical for a vibrant and growing dairy industry, one that is based not on size and power but on innovation, on nimbleness, and on new ideas. That’s the dairy industry we want to see: one that recognises the importance of sustainability, one that recognises the importance of value added and innovation. Whilst we see Fonterra doing great things in that area, it won’t do them continually without a reason, without a competitor to keep up with, and that’s why we need competition in the market.

So for the other side of this House to tell us the scaremongering that they’ve been engaging in, the absolute misrepresentation of what this bill is about, the drawing of attention away from the substance of this bill to a review that may or may not happen—that is exactly what we don’t need in this House. We need these highly skilled academics—these people who are at the height of their academic career, who left academia to benefit this House with their knowledge—

Hon David Bennett: Like a loser like yourself.

Dr DUNCAN WEBB: Not like a failed accountant over there that keeps yapping away.

Now look, what we need is discipline, in fact, and that’s why we have the open entry and exit—so that people can move into the Fonterra scheme when they want to, and when they want to move to a different company, a more innovative company, or a company that might be growing better, might have better ideas, or might just be doing things differently, they can do that. That flexibility is critical, and if we were to do away with that, if this bill were not to be passed—as our friends on the other side know full well, which is why they’re supporting this—that would be placed at risk. In fact, New Zealand’s place on the world stage as a premier supplier of milk—of which we’re rightly proud—would also be placed at risk.

That’s why this bill must be passed. That is why this is a great piece of legislation, and the other side should have got it under way a lot earlier while the clock was ticking. That’s why we’re here today, that’s why we’re debating this bill under urgency: because it is urgent that we protect our dairy industry, we protect all players and not just one, and we have a great, innovative, competitive dairy industry. Thank you, Mr Assistant Speaker.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Assistant Speaker. It’s great to be talking on this second reading of the Dairy Industry Restructuring Amendment Bill (No 2). It’s a shame, of course, that we’re not going through a select committee process right now, but instead having the second reading under urgency when there’s no need for it. It’s a shame because there are so many aspects that could have been discussed through the select committee process. As a member of the Primary Production Committee, I would have welcomed that opportunity to open it to the broader public to give their perspective, rather than what we heard from two former speakers on the Government side tonight highlighting the arrogance on that side of the House to suggest that they know better—that they know better than the public of New Zealand.

We heard it from James Shaw, suggesting that the reason we go into urgency is so that we can have great debates and hear from these amazing speakers in the Government. Well, that is ridiculous, to suggest that they know better than the people in the industry, immersed in this industry daily. That is an outrageous claim, and we’ve just heard it again along with some ridiculous and ongoing economic terms around the need to continue to hear from the amazing speakers in this House rather than actually getting out there with the grassroots people in the industry and understanding what needs to happen.

There’s no listening from the Government, and we’ve seen that again simply by being in urgency again. As they did last year with the parental leave bill, they’ve assumed that they know better than everybody else, and we don’t need to open it up to the select committee process—let’s just make all the rules ourselves! What we saw then, as again now, is that they are missing the point. Things are falling through the gaps. They haven’t got their head around it. And look, they can’t expect to know everything—I accept that. That’s why we have this process. Use it. Don’t try and overrun this system with ridiculous urgency motions when they’re not needed. And the Green Party sit quietly every time one’s proposed—the party who have been so against urgency every time it was used previously, and now it’s a great tool, a great part of this new Government!

This is ridiculous, and what we’re seeing as well with this move to the review—I would suggest that because of the nature of what we’re hearing from the Government, we’ve seen very short calls on this, the second reading. Why aren’t they standing a little longer, sharing some more of their insight? Is it (1) because they simply don’t understand the industry and can’t talk any longer on it, or is it (2) because, actually, this bill is not the purpose—it’s all smoke and mirrors to get to the real crux of it, which is their review of the entire dairy sector. That’s what’s really going on here.

We’re seeing a broad-brush approach being taken to an overview, a total review, of the sector. We don’t know what the terms of reference are yet—we haven’t heard that, other than that it will be comprehensive. But I well suspect it will include an assessment and, I guess, new take on what the environmental aspects are. We certainly accept that dairy farming has an environmental impact, as do any number of other industries, as do the urban centres. We all need to contribute to improving that, as I’ve mentioned previously. But what we don’t need to do is have this ridiculous focus on blaming farmers, and that’s what we’ve seen through the campaign.

We’ve heard it from New Zealand First; we’ve heard it from the Labour Party—about how we’re trying to drive this wedge on this side of the House, which is absolutely ridiculous.

Hon Tracey Martin: Oh, come on.

TIM VAN DE MOLEN: They’ve mentioned it again and again through the campaign—Barbara Stewart might suggest that’s not the case, but we’re hearing that again and again. The protest in Morrinsville was another fine example of that, where New Zealand First turned up, pretending to be friends of the farmers, and the Rt Hon Winston Peters was booed off the stage.

Hon Member: Oh, was he?

TIM VAN DE MOLEN: He certainly was. They had no time for him there.

SPEAKER: Order! The member will resume his seat. I’m going to remind the member. I, unfortunately, have not been monitoring the debate throughout and have just recently come in, and I’m not sure what the precedent has been tonight. But I have been in the Chair now for three minutes, and the member has not come close to mentioning the bill. While the second reading is quite a broad debate, the member has to at least circuit around the bill and come back to it—and pretty soon.

TIM VAN DE MOLEN: Thank you, Mr Speaker. I was just about to get there. Can I assure you that my contribution has been much more restrained than some we’ve heard.

Now, with regards to the bill in particular, there are some elements in there that we really need to see raised, and we’re not seeing that detail in here at the moment. We’re seeing a very narrow lack of detail around trying to allow the Dairy Industry Restructuring Act (DIRA) to continue functioning as it has, but in reality this was triggered two years ago. The Minister’s had months now to make a call on it if he wanted to, and yet all we’re hearing is “Let’s repeal Subparts 5 and 5A of Part 2 to make some changes so we can carry on at 31 May and continue with our broader review.” What we need to see is an inclusion, or an assessment, an understanding, and some more consultation around some of those other aspects that we’re hearing are a major concern for the Government but, in reality, aren’t actually up for debate—areas such as farmers being concerned about not being able to supply any more—well, that’s just simply not the case.

The previous Government’s proposed bill did not suggest that would be happening at all. It wouldn’t be taking away the right for people to supply Fonterra. Any existing supplier can continue to supply. And I would encourage the Government to actually read the detail to understand that. Again, we’re seeing a complete lack of understanding from the Government speakers on this bill around how the agricultural sector operates. We hear about how they don’t want foreign-owned businesses, and yet there’s no sign of a clause to constrain the foreign-owned processors in the dairy sector. So where is that? Why aren’t we seeing those sorts of items included in this? There’s such a lack of detail; a flimsy couple of pages is all we have. If we’d gone to select committee process, we would have had the opportunity to discuss this in a lot more detail, to review some of those aspects that had already been assessed through the Commerce Commission’s report, and to get a clear plan forward that was best for the industry.

So what I would say is that it is extremely disappointing that all the hard work that was done by the previous Government—it was triggered in 2015; we passed that 20 percent threshold in the South Island for milk supply, which required the Minister to go out to seek consultation, a report on the state of the industry. We received that from the Commerce Commission, which had a number of recommendations. Submissions were made; 105 were received. We’ve seen a lot of work go into this, and that’s all been scrapped now. We’re back to the drawing board. This new bill suggests that we actually need to go back and just put in whatever rules we like, because we’re not going to follow the process. We’ll go through urgency and just talk as we see fit.

The review is a concern for me, and I believe that is the crux of what we’re really discussing here today. There are some underlying issues that this Government is going to be stirring up around land-use change that will stifle innovation. We hear so much in the speakers’ contributions tonight about how the Government is trying to give the industry certainty, give them confidence that they can go forward. We’re seeing none of that. All this does is hang a great big cloud over the heads of Fonterra and all the dairy farmers in New Zealand with this massive review with no detail around the terms of reference. How can they have confidence to invest in the industry, to continue to grow their export markets, to expand and benefit the economy of New Zealand when there is so much uncertainty around what is happening in this review and, indeed, the time line? Is it the end of this year; is it 12 months; is it 31 March? These are some of the questions that we need to see answered by the Minister, and I’d certainly encourage him to clarify that for the sake of our industry, so that they can have confidence going forward from this point.

Now, there was a comment earlier on around the water-quality aspect. For me, that is an area that is not covered by DIRA whatsoever. It should not come into this review. I suspect it may well do; we heard a lot through the campaign around taxes and water-quality issues and, indeed, cow numbers. So are we expecting to see a capping on the stocking rate on dairy farms off the back of this review as well?

At the end of the day, we don’t have detail. We don’t have confidence, the industry doesn’t have confidence, and farmers can’t have confidence without that clarity. We hear, already, the dropping confidence in the business sector, and, if this continues, we’ll be seeing that happening in the rural sector as well. So I would urge the Government to give us some confidence, some clarity, around what this review’s going to include, so that the industry can move forward with a clear plan in place. Thank you.

RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora, Mr Speaker. I’m very pleased to make a contribution to round off the second reading of this bill. As the only member of this House whose electorate spans the entire South Island, I believe I have some interest in this legislation and I do commend Minister O’Connor for bringing this to the House.

We’ve heard a range of wild contributions from the other side right throughout this debate. I know we’re under urgency, and I guess there is leeway, but the bulk of the contributions from the other side are concerning a comprehensive review, which we will be undertaking, but that review has absolutely nothing to do with this bill. There is not one word in the bill under consideration that actually mentions anything about a review. So I do want to acknowledge my colleagues Dr Webb and Dr Liz Craig, who actually were bringing this debate back to what we are supposed to be doing, which is actually considering the bill at hand—and that is we are preventing the expiry of the Dairy Industry Restructuring Act (DIRA) provisions across the South Island.

That is a major and urgent piece of action that’s required, because had we let these provisions lapse, it would just place the whole dairy sector in the South Island into disarray. That is why the members opposite are supporting this legislation, because they know that it’s required. They know that it’s required, so all the talk, all the bluster about a so-called review, and all the scaremongering that’s been going on is totally irrelevant to the bill at hand. So I do support this bill because what we are doing is providing certainty for the dairy farmers and dairy processors right across the South Island that the DIRA regulation will continue. That is vitally important.

Yes, we know that there are many farmers in the South Island. I know, going up and down my electorate, the importance of the dairy industry and the dairy sector to the people of not only the South but Aotearoa. But we’ve also seen the emergence of new processors, as well, whether it’s Synlait in Canterbury, Oceania, Open Country, Westland—we’ve got a lot of new processors that have entered the game, all as a result of DIRA regulation. And so that is a good thing.

And then we’ve also got the dominant, monopolistic, major player—three-quarters of the milk supply in the South—in Fonterra. So, yes, there are going to be some difficult and some complex issues that we will be talking to the industry about to progressively chart the way forward for the industry right across Aotearoa. All we are doing now with this bill is we are keeping the status quo. We are letting farmers know that, hey, we’re not changing anything; things will continue as they are. We will still have open entry and exit. We’ll still have milk price monitoring. There’ll still be the 20 percent rule for farmers in terms of their supply to other processors. Nothing is going to change. That will continue.

And why are we doing this? Well, because the Commerce Commission in its report, in looking at the competitiveness of the industry, said that it’s not required. They wanted to raise the threshold to 30 percent. Sure, it’s about 24 percent now in terms of the milk supply that is going to other processors, but they thought that 30 percent is a fair threshold. So what we are doing now under this legislation is we’re just getting rid of all of the triggers that were activated under this legislation. We have to pass this legislation under urgency so we can put a stop to all of those triggers. This is a very sensible way forward, and we’re using urgency to make sure that we can get it through in an expeditious manner so we can provide that certainty for the farmers and for the processors, particularly in the South Island, so they know what arrangements they are going to be operating under for the coming season. I do commend Minister O’Connor for his—

Hon Meka Whaitiri: Leadership.

RINO TIRIKATENE: —leadership, yes, in bringing this bill to the House.

I know that we’ve heard talk about going on to farms. Māori are big players in dairy in the South—or emerging, I should say. Ngāi Tahu farms in Eyrewell have got mighty big operations there, which I’ve had a good look around over the years. Likewise, my own whānau over in Mawhera, on the West Coast, have got our little operations happening over there. And, you know, if we look up in the North Island we’ve got Miraka, just in terms of a new processor that’s doing some outstanding things. [Mr Speaker holds up bill] I’m just saying, sir, that this legislation is very important to the industry as a whole. It’s providing certainty. It’s providing certainty that that Dairy Industry Restructuring Act (DIRA) regulation will remain in place, because the Commerce Commission also said that taking away that deregulation far outweighs leaving that regulation in place. I think we need to take heed of what the Commerce Commission has been saying.

We also know that the next phase from here in is to undertake a comprehensive review to look at all of the issues and give a proper consideration with all stakeholders to ensure that there is a pathway forward, whether it means that regulation will stay in place or whether it will mean that there is a pathway to deregulation. And I think that’s what we’re looking at. We’re looking at a pathway to deregulation to ensure that processors, the dairy sector, and dairy farmers in general have some certainty as to how they will conduct their operations and how they will be able to make their investments, make their business decisions, to ensure that they can get an optimal return from their assets, from their businesses.

That’s all this legislation does. It’s very straightforward. All this talk about moving goalposts, scaremongering, and goodness knows what other concerns have been raised on the other side, they’re totally unjustified—totally unjustified. When looking at this bill in itself, it’s very, very simple, it’s very, very clear, and I commend it to the House.

Bill read a second time.

In Committee

Part 1 Repeal of provisions that provide for expiry of subparts 5 and 5A of Part 2

Rt Hon DAVID CARTER (National): Thank you, Mr Chairman, and as we move to the committee stage can I just say that I hope we see a Minister regularly on his feet answering the questions that I’m going to raise, because that will certainly mean that we get more value out of this inquiry.

Let me start with the three questions I need to ask. The first question is, why the rush—why are we here in urgency? The second question I want to ask is, noting Rino Tirikatene’s comments—“[this] review has … nothing to do with [the] bill.”, were the words he said—I want to know the relationship between this bill and a bill introduced in the latter stages of the National-led Government. And the final question I want Minister O’Connor to answer is, I want an assurance around the procedures that he’s followed to make sure that we’re putting into place legislation that will work, that is accurate, because, of course, we’re not seeing the luxury of the select committee having a look at it.

So let me deal with the first one: why the rush? I’ve listened to the contributions from both sides of the House. They’ve certainly been more meaningful and had far more content from this side of the House than from the other side, but accepting that point—

Hon Tracey Martin: Ha, ha!

Rt Hon DAVID CARTER: I note the Hon Tracey Martin immediately agrees with that, because she’s been shrieking for the last hour or so—been away for a long lunch, no doubt. But I don’t understand the reason for the rush, because as I read the legislation there is a requirement that these competition safeguards around Fonterra’s share will breach on 31 May this year, and here we are in urgency on 13 February. So I see no reason at all why normal procedure couldn’t have been followed, with this legislation introduced and sent to the select committee. It’s about a 70-word bill, so we could have had a fairly truncated process at the select committee, but that way 4,000 South Island dairy farmers would have had a chance to make a contribution and to scrutinise the legislation. So my first question, and I hope the Minister will take the opportunity of rising to his feet, is why the rush? Why can’t it go before a select committee?

My second question, then, was picking up on the very concrete and eloquent contribution from Rino Tirikatene. He talked about the fact that we’re acknowledging there’s a review. We’re in the dark as to the terms of reference of that review, but there has to be, I consider, a relationship between this bill and the one introduced by the former Minister the Hon Nathan Guy. I know that in that particular piece of legislation the issue about open entry and exit was going to be dealt with. It’s not an easy issue. I accept it’s a complicated issue, and I think the fact that the Minister’s shirked his responsibility by simply taking it out of the bill and saying that it will form part of the review still to be announced and still to be progressed—we need to know tonight the relationship between this bill and the former bill.

And then the final point I want to make is around this legislation being rushed through in urgency. I’ve acknowledged many times it’s about 70 words. It should be accurate, but this is complicated stuff that we’re dealing with. And I know the Minister in the chair, Damien O’Connor, was well educated at a Christchurch school. I know that he will have studied each word in detail, but I want to be absolutely assured.

We know we’ve seen embarrassing situations from both Governments in the time that I’ve been in this House, where Governments have chosen to rush stuff through with urgency, absolutely confident that the work’s been done and the wording from the Parliamentary Counsel Office has been adequately addressed and, lo and behold, within a few weeks of it being passed we find out it hasn’t been done accurately. So I just want the Minister—and if he’d rise to his feet and answer those three simple questions, I think we could curtail this committee stage and maybe minimise it for two or three hours, knowing that the bill hasn’t had the opportunity to be scrutinised by a select committee. So I’d be very, very grateful to see the Minister immediately on his feet, in cooperation.

Hon DAMIEN O’CONNOR (Minister of Agriculture): Look, thank you very much, Mr Chairman. I’m very happy to answer the Rt Hon David Carter’s questions. If I can start with the first one, why the rush? On 31 May, the legislation that governs Fonterra for South Islanders will, effectively, become defunct. It won’t operate in the way that farmers and all the processors and everyone have expected and have utilised over the last 10 years or so. So there is some urgency, and, in fact, it is the same urgency that was there when, from 2015, the trigger point for that legislation was met. It was 2015; it’s now 2018. Who was in Government?

Hon Tracey Martin: National Party!

Hon DAMIEN O’CONNOR: Oh! It was indeed the National Party and the National Minister. Now, to be fair to the Minister, he then conducted a review. The review was conducted, and then a piece of legislation was drafted up, and, actually, there was plenty of time from the drafting of the legislation before the election to pass that. And if the National Government had been determined to pass it and protect the dairy industry—if it was its true friend—it would’ve done so. But the reason the National Minister and Government didn’t want to was they didn’t want to have a scrap among their friends. And the bottom line is that within the dairy industry and the farming sector, there’s still a lot of division about some of the core provisions.

In fact, the open entry, open exit provision was a debate between Fonterra and Federated Farmers. They announced—I’m sure at the encouragement of the Minister—a compromise situation that, effectively, said, “Well, Feds, we do kind of support open entry and open exit.”, but they didn’t, really. It was a temporary fix to what is a major component of a piece of legislation. And because of that debate, the Minister, to be fair to his colleagues, didn’t want to have his constituency—the dairy industry—up in arms and arguing with the Government in the lead-up to the election. That’s why they didn’t do anything about this.

I understand, and the Government understands, the need to pass this prior to 31 May. So we had a look at the situation, and so, in moving into the new year, had a decision to make. We could have taken the existing or the proposed piece of legislation, put it into the select committee, and then had an extensive—because it is an important issue—submission process and run out of time before the deadline. So my decision was to separate out the rollover provisions that protect the dairy industry and leave in place the existing legislation. It is a minor, technical amendment, actually, in truth. All it does is take out a couple of provisions that would trigger provisions that, effectively, did away with the legislation, the Dairy Industry Restructuring Act. It’s taken them out and said that things can continue—a minor technical amendment.

So the urgency is necessary, but the review is an opportunity. And let me get on to the second point—the question. Because the bill is necessary, and we can pass that now, the opportunity then is to go back and open up for wider discussion and honest discussion, with plenty of time to look at the key issues that drive the dairy industry, and the requirements around competition, and fair access for consumer products, and the issues of protecting what is our single biggest and best company, bar none. New Zealanders still own this. It’s a cooperative, and all the points raised in the House by passionate farmers, for the most part, are right.

Can I just go back, though, because in talking about the review—because it won’t be easy; because, actually, I have to challenge the person who questioned me on these issues. In a similar way to the dilemma the Labour Government faces now, back in 1999, when we came into Government, in fact the National Party was caught up in an internal debate between those in the caucus and the Government that wanted one company, like Fonterra, and those that wanted open competition for the dairy industry.

Rt Hon David Carter: Oh, rubbish!

Hon DAMIEN O’CONNOR: Absolutely—absolutely true. And so, once again, the National Government, back in 1999, sat on its hands and did nothing. And so it was up to the incoming Labour Government to pick up the mantle and to proceed and to put in place legislation that gave us Fonterra, and I’m proud of being part of a Labour Government that did that. Once again, we’ve come into Government with a similar kind of dilemma, and we will not be rushed into processing a piece of legislation that was a compromise piece of legislation by the National Government, expecting us to just roll it on through. No. We want the best outcome for the dairy industry.

And the issues raised by my coalition colleagues are legitimate issues. Some of the issues raised by the Opposition are legitimate. And so we will—

Hon Ruth Dyson: Name one. Name one.

Hon DAMIEN O’CONNOR: A few. I’m being very, very generous. That is, they have said that the dairy industry is important. I agree with that. They have said that Fonterra is a very important part of our economy. I accept that and agree with that, as well. But there’s a lot of other things, actually, that somewhat contradict one another.

I’m confident that the coalition partners in the Labour-led Government have the best interest of Fonterra and the dairy industry and the dairy farmers at heart—absolutely. And the things that are coming at us internationally—like the ones of artificial milk, like the ones of increasing environmental scrutiny, of increasing scrutiny around our labour laws and provisions in the industry—are things that our customers are absolutely demanding, and be it blockchain or traceability or whatever, we will have to meet the highest standards internationally to continue to sell high-value products into those best markets.

The review is an opportunity—and I acknowledge that the National Party, I think, deep down, see the wisdom in this—and we should embrace the opportunity and go through in a very careful way, with the right people, and come up with the right outcome. And it won’t be a bunch of Tory lackeys, which is what that Government did every time it had a review. It will be people who have an understanding of the future, of future needs.

Hon Nathan Guy: Who? Who?

Hon DAMIEN O’CONNOR: Well, we haven’t decided. If the member has some people he thinks should be put forward, I’d welcome him nominating some. But I’ll tell you what: they’ll be on the committee because of their wisdom and vision, not because of their political alliances.

Can I say, to the third point around urgency, there are—

Rt Hon David Carter: That was the first point, actually.

Hon DAMIEN O’CONNOR: That’s right. There have been people making submissions on the dairy industry review. I accept that, and I’m guessing that the same people will make submissions to this, and there may be some more, because the industry has moved forward quite a long way in 12 months, in fact—quite a long way. So there are now issues and perspectives that I think have changed since they last made submissions, and I welcome their submissions back into this process. They don’t want to make submissions two or three times. This urgency legislation is a technical bill to just roll things over and allow those people to put their time and effort into and focus on to a substantive submission that will come in to the substantive review.

So I think I’ve answered all three questions. I may not answer every question quite so substantively, because I think therein lies—and respecting the questions asked by the member here, the Rt Hon David Carter; because he comes from a good school, he’s asked smart questions. Can I say that it’s fair enough that I’ve answered him and, I hope, assured the House and the dairy industry that the coalition Government, in proceeding with this legislation and a review, has at heart the absolute best long-term interests of Fonterra, dairy farmers, and the dairy industry and the New Zealand economy that does depend upon it so much.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Mr Chair. When we look at Part 1 of the bill, it repeals the provisions that, basically, relate to the South Island provision in the legislation that was triggered in 2015, as a number of speakers have said, because the South Island milk flow was over 20 percent that went to non-Fonterra factories, so the 80 per cent threshold was met and, therefore, that triggered the ability for the Dairy Industry Restructuring Act regulations not to apply in the South Island.

Now, this bill, in Part 1, talks about how it intends to enable those provisions to still apply even though the legislation has triggered itself in the original Dairy Industry Restructuring Act. Now, the original Act the Labour Party has taken a lot of credit for tonight, saying that they did that a number of years ago. That is true and we acknowledge that, but at that time, they set a threshold for the South Island. That is a threshold that has been met, and now they are trying to change the threshold that they set earlier. If they were so right in what they did many years ago, why do they need to change it again now? That is something I’d like the Minister to answer as to why they actually need to change that threshold now. If that is because they don’t believe there is enough competition in the South Island, then I need the Minister to say that, because some of his colleagues have said to that effect, and their words were: “wildly monopolistic player” that “needs discipline”. The member from Christchurch, the new member, said that about Fonterra, that it was a “wildly monopolistic player” and needed discipline. So that side of the House, obviously, has it in for Fonterra. That was that member’s exact words. He saw this legislation and the review that will accompany it as a direct attempt to attack Fonterra. If you ever needed proof of that, just ask that member who said those comments on the Labour side.

Now, there are some parts of the legislation that have been removed from the original Act that was taken to this House some time ago, and one of those was the ability to take milk from new conversions. That was something that had been agreed upon between the parties involved, and I want to hear from the Minister why he decided that clause had to be removed from this bill. What was so offensive to the current Minister that he felt that he couldn’t have that in this bill now? That clause, effectively, enabled Fonterra to say no to new conversions that would increase their requirement to have stainless steel provision at a time when they didn’t actually need to do it, and it would actually mean that you would achieve the opposite goal.

What we’ve heard from the Labour, Green and New Zealand First members tonight is they’re talking about trying to build a value-add industry. That is the whole mantra that we have heard tonight. The provision of extra stainless steel for anybody that decides they want to do a new conversion and join Fonterra means that Fonterra actually has to provide a lot more infrastructure, especially in a fast-growing area like the South Island, than it actually needs for the production of its product. So, naturally, that means that that extra infrastructure goes into very commodity-type products like milk powder, rather than the value-add products that the Minister has said he wants to see happen in the industry.

So I want to know from the Minister why he took that clause out, because that clause actually would include an incentive for Fonterra to actually work on the value-add and not provide more provision for stainless steel just as a backup. And if you want to get that in the terminology of Fonterra shareholders, for example, if you look at Fonterra Shareholders’ Council chairman Duncan Coull, he has said this about open entry, “Open entry leaves Fonterra and its farmers as guarantors for the industry, underwriting risk for competitors, forcing us to potentially build more capacity than needed and making it harder for us to invest in the highest returning manufacturing assets.” Those are the direct words of the Fonterra Shareholders’ Council chair. That open-entry policy, which the Minister has taken out of this bill, directly conflicts with his desire to see a more value-added industry. The problem Fonterra finds is that because it has to be open to any potential milk supply, especially in the South, then it has to provide a lot more plant, and that plant is traditionally commodity-based rather than the value-added that we all in this House seek to see from the industry. So I just can’t understand why the Minister has taken that clause out, when it actually and effectively achieves the purpose he seeks to see in the industry going forward. There’s no reason why he would take it out. It’s not something that needs to be debated in this House. He’s made it very clear to the House that that is his goal, and there would be no opposition from this side of House to that goal being achieved either, because everybody wants to see a higher value-add to Fonterra in its distribution of the products that it makes it. Fonterra itself wants that as well, and Fonterra has made those kinds of commitments in its investments in recent years where it can, but it is also hamstrung by that need to provide that stainless steel and to provide that capacity because of that open-entry clause.

In the South Island there is significant competition. The original threshold that was set of the 80 percent has been met and there is competition beyond that point. There are new companies starting up in that area all the time. There’s a new company starting in the North Island. For example, if you look at Ōtorohanga, it recently had an announcement of a new company there. There is a very competitive milk market out there and Fonterra is being hamstrung by this legislation. The Minister had an opportunity to do two or three things that were in the legislation that the previous Minister had put forward that would enable us to achieve some of those value-added processes, and he has declined to do that. So I want the Minister to explain why he is taking that out, why he doesn’t believe that leaving that in there would assist in the value-add process that he has come to this House to seek.

If we look at Fonterra itself, their response to the Commerce Commission’s review said, “The requirement to accept all milk acts as a disincentive to Fonterra to invest in the right kind of assets and undermines the industry’s ability to grow value-add business and maximise returns to NZ farmers, as we are all committed to do.” Why then does the Minister take that clause out? If he genuinely wanted to see a value-add industry, the industry itself has met the threshold test that was set to it a number of years ago. The industry itself has said that it is willing to invest in that kind of infrastructure, and yet this Minister feels that he can make an executive decision that is bigger than the industry.

That’s the danger that we will find in this review. We’ve heard it from the people in the Opposition in this Chamber here tonight. They all believe that they know better for Fonterra and for New Zealand farmers than what Fonterra itself knows. They all say that. The Greens are saying, “We want water quality. We want to look at environmental land use.” The Labour Party is looking at exactly the same. They want labour rights. They’re looking at the contracting provisions of Fonterra in regard to supplies. Those parties are dictating to New Zealand’s business the very decisions that a business makes. I don’t see any of them being qualified to be the CEO of Fonterra. I don’t see any of them being qualified to be elected to the board of Fonterra. All I see is a group of Labour - Green - New Zealand First politicians that want to go after that industry, and this is their mechanism to do it.

Hon Dr David Clark: What a load of rubbish!

Hon DAVID BENNETT: That member over there says “load of rubbish”. This is true. This is what is happening in this room here tonight, because otherwise you would just pass the legislation as it is, otherwise there’s no point in going into urgency, otherwise there’s no point in going to a review. Why do you want to do the review? It is because it has to be a wider purpose. [Bell rung]

Hon MEKA WHAITIRI (Associate Minister of Agriculture): Thank you, Mr Chair. I’m going to take a small contribution to the Minister’s explanation in terms of answering some of the questions from the Opposition side around the urgency.

Rt Hon David Carter: Great, because the Minister didn’t.

Hon MEKA WHAITIRI: Well, look, it’s very clear that the Minister explained the urgency. You know, we’ve got a deadline for 31 May. I also know that the former Minister talked about going to select committee, and, let’s be honest, select committee is about a six-week process and I think the Minister in the chair, the Minister of Agriculture, has made it really clear that the reason why we’re having urgency is because we have got farmers waiting for clarity, which unfortunately that side of the House didn’t provide them when they were in power. So here we have a Minister doing the right thing by bringing this bill in for urgency.

But there is a question I did want to ask the Minister and that’s, I guess, in response to some of the comments made from across the Chamber, and that’s in relation to this: if we weren’t presenting this piece of legislation in the House, what would be the actual risk to the Southland farmers, for example? I also want to make comment that you’ve prefaced your introduction of this bill, Minister, by the fact that this very wide-ranging review is going to take place. You’ve made comments, I’ve heard in this House, around the ever-changing international markets around dairy products, around technology, around products’ origin, and, of course, around food safety, and taking a strategic review of the dairy industry I think is the right thing to do. That’s what I’ve heard you say in this House, Minister.

What I haven’t heard from those on that side of the Chamber is the risk and the long-term vision of our dairy sector going forward. I’ve heard a lot of complaints around the rush; you’ve more than ably explained that, Minister. But, I guess, I again look to you in terms of the leadership that you’re providing in the urgency of this bill, which, coupled with the strategic review that you have promised that you’re going to undertake, for me talks about the sort of long-range vision that you have for the dairy industry. Here, for this particular bill, we’re talking for South Island farmers, but clearly players like Fonterra will be looking very closely under your leadership as we look more strategically at the dairy industry, and I think that’s exactly what you’ve promised in this House, and I commend you for that.

So my questions were a couple of things, Minister. What is the risk to us not proceeding with this bill under urgency? What’s the risk particularly to the South Island farmers that are looking for the leadership and clarity that you’re providing through this bill? The second one is about the commitment to the wide-ranging review that you’re going to undertake and the risk to the nation and the dairy industry if you don’t take that strategic review. Those are two questions that I’m really keen to hear from you. A third one, if I may, in the time that’s provided is in support of my colleague Rino Tirikatene and to acknowledge the very strong Māori interests in dairy across the nation, and to ensure that obviously under your leadership, Minister, we will ensure that emerging farmers, particularly in the Māori agri-business sector around dairy farmers, will also be part and parcel of your review. I do hope that you take that—

Hon Nathan Guy: Yeah, Miraka.

Hon MEKA WHAITIRI: Well, Miraka’s one over in the Taupō area, and you know they’re doing some really innovative things there. But if we’re talking about the wider dairy industry, Minister, I do encourage us to take that wider, innovative, and diverse view on our industry, the dairy industry, as we go forward.

So, Minister, there are three questions there: the risk to us of not presenting this bill in the way we’re doing it; the wider risk to the industry if we’re not taking a review as you promised; and, thirdly, ensuring that Māori dairy farmers’ perspectives are also taken into consideration as we undertake this review. Kia ora.

Hon CHRIS HIPKINS (Leader of the House): I move, That the committee report progress.

CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection?

Hon Chris Hipkins: No, it’s a vote. I’ve moved it.

Hon David Bennett: Mr Chair, I seek the call.

CHAIRPERSON (Adrian Rurawhe): Can you wait a minute? I am seeking advice on this. My mistake—there is a vote. Leave is—

Hon David Bennett: I raise a point of order, Mr Chairperson. There hasn’t been enough time to debate this part of the bill. The member sought leave for a vote. I stood up and sought leave to make a call before you had made any decision. There had been no vote accepted. I seek leave for another call on this part. We’ve had only a very small number of calls. Until that motion is accepted, it is still open for somebody to seek the call.

CHAIRPERSON (Adrian Rurawhe): No, my ruling is that there will be a vote on this.

Rt Hon DAVID CARTER (National): I raise a point of order, Mr Chairperson. There’s another issue that I think Mr Chairman needs to seriously consider. A call was made to report progress. There’s been some discussion, and I note now that it’s 4 minutes to 10. By convention in this House, when we’re in the committee stage we always then report progress to Mr Speaker at 5 minutes to 10, so I think we’ve gone beyond the time to do so.

CHAIRPERSON (Adrian Rurawhe): I thank the member for his contribution, but, as members have been calling out on the other side, we are in urgency and the vote will be put.

A party vote was called for on the question, That the committee report progress.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Motion agreed to.

House resumed.

Progress reported.

Report adopted.

SPEAKER: The Government has indicated that it does not wish to continue urgency, so the Dairy Industry Restructuring Amendment Bill (No 2) is set down for further consideration in committee next sitting day.

The House adjourned at 9.59 p.m.